What is a chargeback?
Chargebacks represent a method of consumer protection, enabling credit card or debit card holders to dispute a transaction and to reclaim their money. However, this only potentially works if the chargeback claim is accepted. An online trading chargeback can, in essence, cancel the transaction through which the investor made his/her deposit with the broker. Assuming it is successful, the chargeback forcibly confiscates the money from the broker’s account and returns it to the balance of the credit card/debit card carrier.
How it started
Chargebacks, which were first introduced in 1974 under the Fair Credit Billing Act were meant to shield customers from duplicitous transactions committed by crooks, as well as from shoddy services and exploitation of numerous corrupt merchants. Because of this, traders can use this to recover their funds from online trading companies, who they believe took advantage of them. Inferior services and flat out fraud is unfortunately rampant in the online trading world, which is why having the ability to execute chargebacks is such a powerful tool that traders can use when needed
Chargebacks offer a numerous of advantages to investors – in the short-term – and to all market partakers over the long-term. Their sheer presence can theoretically keep merchants (online traders) honest and always striving to offer their consumers the best possible services and products.
Recover your deposits
The first thing you must understand is that if invested with an unregulated broker and you made profits, you will usually not be able to withdraw your returns. You focus should only be on recovering the money you deposited.
How to go about it
Before you try to initiate a chargeback, assuming you still have a balance, try to extract the money in the traditional way. First send the required documents to your broker so you can ensure your account is entirely verified. These documents may comprise of a copy of your credit card, a bank statement, a government-issued ID and proof of address, such as a recent bill. In addition to submitting your withdrawal request to the broker’s website, send them a formal email, and try calling them. Explicitly inform them that you will take necessary legal steps if they fail to return your funds. You can tell them you will do a chargeback which can be very damaging to them or complain to the local police authority such as the FBI or the UK Action Fraud Police.
If you have nothing remaining in your balance because your broker traded it away without your permission, demand a compensation. As was mentioned before you should do so in the form of an email or even a letter. You can additionally try calling them and threatening them.
If your broker continues to ignore you or downright refuses you request, the next step is to get in touch with your bank, credit card company or the e-wallet you used to deposit the money and check if they are able or even willing to help you initiate a chargeback. Most times they will refuse, especially if more than 120 days have passed since you’ve made the deposit.
Is it possible to do the chargeback dispute by yourself?
It’s certainly possible, however, you must understand that there are a number challenges up ahead. If you fail on your first chargeback attempt, banks will not let you re-file the dispute. Even if you make a mere technical error in the filing procedure the banks will not issue second change.
Additionally, these online trading brokers often anticipate potential disputes by their clientele and will, therefore, try to do everything in their power to manipulate the banks and the credit card companies into believing that the scheme was entirely legitimate. Successful chargeback cases can potentially result in the broker losing their merchant account along with the ability to process credit cards. This is why you can fully be sure that they will fight back with everything at their disposal to ensure your loss.
If you were scammed by an online trading broker via your credit or debit card be sure to make a complaint here and we will assess if for you entirely free of charge. Depending on the case at hand we can refer you to numerous service providers that can potentially recover your money.