The chargeback scheme applies to debit cards and is only a few years old I think. It has different rules to S75.
Chargeback applies to most card scheme payments - including credit cards.
Indeed, the first step in recovery for a credited S75 claim is usually via chargeback.
As a chargeback is a purely contractual process within the card scheme, it does not preclude legal action.
Add that a chargeback will fail if there are no funds to charge back in the merchant's account
Not the case - the acquirer would be liable, and then the card network (who will both hold funds in escrow).
It's why, for example with Thomas Cook, acquirers started holding larger and larger amounts back, so that if Thomas Cook went under they could pay the chargebacks (damage limitation).
- A chargeback must be made within 120 days of the transaction date (this may be extended to 120 days after the goods or services were to be provided where this was not done straight away, though there is a long-stop of 540 days after the transaction date).
- A chargeback can only claim up to the amount paid on the card in question.
- The cardholder must raise their claim first with the merchant and allow the merchant the chance to deal with it
- A chargeback will not cover consequential losses
- A bank is not required to raise a chargeback if it reasonably believes the claim will not succeed
Correct, except for the last point. There is no requirement to raise a chargeback.
However, the FOS expect the firm to provide a "good" explanation if it chooses not to do so. There are cases where the FOS disagree with the firm over the decision not to raise a chargeback (if I might be so bold as to suggest, because the FOS investigator has a minor misapprehension of the chargeback rules), however there isn't a whole lot they can do.