Disputes Overview
A ‘disputed transaction’ can arise for a variety of reasons. The most common types of dispute reasons are:
Fraudulent
Subscription_Canceled
Product_Unacceptable
Product not received
Credit not processed
Two Types of Disputes
Dispute/Chargeback
A dispute or chargeback is a formal, irreversible reversal of funds initiated by a cardholder's bank, often incurring fees.
This is the common dispute where a client disputes from their bank/Card Provider to recover the amount paid.
In this instance, Ignition will reverse the amount from your Payout Account.
Dispute Inquiry/Retrieval
Dispute Inquiry/Retrieval is a preliminary, non-monetary request for information from the bank to verify a transaction before the client files for a formal dispute.
This means the client only files an Inquiry from their bank/Card Provider to get clarification on the charge.
In this scenario, no funds have been withdrawn from your account yet.
Please note: The client can update this to a Formal Dispute without additional notification, which will withdraw the amount from your account as it turns into a chargeback listed above.
When does Ignition process the reversal of payments from your account?
Ignition will process a reversal from your Payout Account as soon as a dispute is raised by your client. You can see this reversal in your Payouts page in-app.
Ignition cannot prevent this fee, as the funds are debited by the issuing bank.
Dispute Resolution Timeline
Full cycle of a dispute is 60-75 days or more depending on the bank to review the evidence and decide a dispute resolution
Avoiding Payment Disputes by your Clients
Disputes are common and there are a few things you can do to decrease your chances of a client disputing a payment charged by you:
Ensure your payment descriptor clearly identifies your business
Ensure you always have an up-to-date and accurate engagement letter signed by your client. Avoid "accepting on behalf" unless you have confirmation in writing from your client of the agreement to charges.
Ensure that you have the Termination Clause, Refund / Disputes Clauses discussed with your client during sign up, and in your Terms Templaets.
Avoid entering payment "on behalf of" your client unless you have written consent to charge their account/card.
Send payment receipts to clients emails following payment collection. Ignition can send these automatically for you.
Keep email or chat conversations so you can refer back to them if clarification is needed.
Receiving a Payment Dispute Notification From Us
We will send email notifications regarding a client payment disputes to the email addresses listed under Settings → Payments → Notification. Depending on the payment method used, you may be able to challenge the dispute:
For Bank Account payment (ACH, BECS, BACS, PAD) disputes, these cannot be contested (as per the schemes regulations) and will always be automatically resolved in the clients favour. You will have to resolve these disputes directly with your client.
For Credit Card disputes, we will contact you via email when a dispute is raised, kindly reply if you wish to Accept or Counter the dispute.
We highly recommend to add all relevant email addresses in the Settings → Payments → Notification field and checking the inbox on a timely basis so you don't miss a dispute notification.
Submitting Evidence to Counter the dispute
If you choose to challenge a credit card dispute, we will ask you to:
Contact your client to try to resolve the dispute. It is possible that the client did not recognise the transaction and can contact their bank to withdraw the dispute.
The dispute should be updated to Won automatically when their bank has processed it urgently. Otherwise, we will still need to submit evidence. You will need to provide evidence for every credit card dispute you wish to challenge, even if the client has advised you that they will be withdrawing the dispute.
Submit evidence as to the validity of the charge by responding with facts surrounding the Dispute Reason.
Requirements of documents as evidence:
Files must be in PDF format or JPEG formats
Note: Stripe does not accept video, audio, links, and other formats
All documents total size cannot exceed 4.5 MB or up to 19 pages
Contents should be in English
In the event that the conversation is in other languages, please add a translation to English
You can colour highlighters, use circles, arrows, and callout boxes to highlight relevant phrases/sentences
Dispute Categories and Recommended Actions
Please note that your evidence should only respond to the facts surrounding the dispute reason.
Below are the different dispute types and the suggested documents you can submit as evidence as recommended by our payment provider.
Fraudulent Transactions / Unauthorised transactions
Definition: The card owner allegedly did not authorize your charge; or unrecognised transaction” occurs when a client is unable to reconcile the transaction appearing on their card statement with the payment to your business.
Recommended Steps
If reported stolen, Credit card networks place liability for accepting fraudulent payments with you
If the client is able to identify the transaction, ask the client to withdraw the dispute
Documents to be Submitted
Signed Engagement Letter - highlighting Authorization and Client Signature
Email or Chat conversations showing proof that a service was agreed and acknowledged by the client
Product not received
Definition: The card owner claims the services were not received.
Recommended Steps
Call the client and understand why client believed they have not received the product/service
If the client is able to identify the transaction, ask the client to withdraw the dispute
Documents to be Submitted
Service documentation to prove date on which the client received or began receiving the purchased service
Signed engagement letter confirming services and their scope
Email or Chat conversation to prove services were received
Other documentation of valid attempts to remedy the chargeback (e.g., email communication with the client)
Product unacceptable
Definition: The card owner claims the service received is unacceptable or not as described, or not within the scope of the services
Recommended Steps
Call the client and understand why client's dissatisfied with the received product/service.
Explain clearly to the client the misunderstanding and prove that the product/service was delivered as described.
If the client is able to understand the scope of services, ask the client to withdraw the dispute
Documents to be Submitted
Signed engagement letter confirming services and their scope
Email or Chat conversation to prove services were acknowledged
Other documentation of valid attempts to remedy the chargeback (e.g., email communication with the client)
Subscription canceled
Definition: Card owner client claims that they’re still being charged after they have cancelled the service
Recommended Steps
Call the client to clear the misunderstanding
Check if the proposal/service billing is still active and if the client failed to follow the cancellation process
If the client is able to understand the Termination Clause, ask the client to withdraw the dispute
Documents to be Submitted
Signed Engagement’s Termination Policy, as discussed during sign-up
Email or Chat conversation to clarify cancellation request (if any) and prove the date of the request is within the Termination Policy
A justification for why the client's subscription was not canceled.
A notification sent to the client of a continuation of the service, or an acknowledgement from the client of their continued use of the product or service after the date they claim they canceled the services
Credit not processed
Definition: Card owner claims that a credit or refund was not provided
Recommended Steps
Call the client to get a detailed understanding of the dispute. If you're able to resolve the issue, ask the client to withdraw the dispute
If you think that the client's claim is valid, confirm with us that you will accept the dispute
If you have already requested a refund for the invoice disputed via Ignition/in-app, the dispute filed will supersede that refund request. The reversed amount will then be applied to the dispute process. The refund you have requested will no longer be processed. If the intention is to still refund, confirm with us that you will accept the dispute
Documents to be Submitted
Signed Engagement letter’s Refund or Dispute policy, as discussed during sign-up
Your explanation as to why the client is not entitled to a refund/credits
If refund was already provided outside Ignition/in-app, provide the receipt or bank transfer confirmation of the refund transaction
Duplicate
Definition: Card owner claims that they were charged again
Recommended Steps
Call the client to explain charge/s
If the client is able to understand the invoice/s, ask the client to withdraw the dispute
Documents to be Submitted
Invoice to prove that the charge was not duplicated; or
Explain why the duplicate charges are correct
If refund was already provided, provide the receipt or bank transfer confirmation of the refund transaction
Dispute outcomes
If you win the credit card dispute, we will inform you that the dispute was resolved in your favour, and process a re-disbursal to your account and inform you of this.
If you lose the dispute, then we will inform you as such and no further action can be taken by us - you must resolve the issue with your client.
For ACH, BECS, BACS and PAD disputes, these will automatically be resolved in favour of your client and you will need to reach out directly to your client to resolve the reason for the dispute.