Should this be a chargeback or a small claims suit?
May 6, 2010 7:55 PM   Subscribe

Should this be a chargeback or a small claims suit?

Long story short, I paid an organization about $2,000, using my credit card, for services to be performed throughout a 12 month period. 6 months in, they stopped providing said service.


-Should I just file a small claims suit immediately, or try to do a "partial" chargeback through my credit card? Can I even do "partial" chargebacks?

-My gut is small claims, but is there any pros/cons to trying a chargeback first? Keep in mind this is about 6 months after the original credit card charge.
posted by jeff1010 to Law & Government (8 answers total)
Try the chargeback first. For one thing, it's easier than small claims court. Having said that, you may be SOL for the chargeback because of the time frame. Only your credit card company can tell you for sure. Before you call them, get very clear about what you're going to say. It can't be that you didn't like the service, or that it wasn't great -- you can't be at all wishy-washy about what you say. You have to say clearly: They did not provide the product/service/whatever it is. (You may find chargeback tips at

But if that doesn't work, then go straight for small claims court. If it's as black & white as, "They promised me 12 months, only delivered 6," you will prevail.
posted by BlahLaLa at 8:12 PM on May 6, 2010

Disputes can be partial reimbursements, as far as I'm familiar (that may be just my company, I don't know). But anyway, have you tried to get the organization to refund you? A lot of disputes require that you make an attempt to rectify it with the company first before trying the dispute with your company.

Be honest. "They provided only six months of a twelve-month service and have not responded to my attempts to rectify this with them. Here is the proof that I have attempted to rectify this with the merchant."

If anything, trying the dispute first would be beneficial to you in small claims, as you can prove you've tried other venues before going the legal route.
posted by Verdandi at 8:25 PM on May 6, 2010

I am a lawyer, but I am not your lawyer. This is not legal advice.

If I were you, I'd try the chargeback first--as BlahLaLa pointed out, it's much easier. But maybe before that, and definitely before I looked up the first thing about small claims court, I'd send them a letter about the situation. It's possible they're already working on sending reimbursement checks but haven't been able to organize themselves that far. Depending on how badly their troubles affected them, they may not have been able to keep enough employees to get them out on time.

The one thing that's definite is that you need to document everything you possibly can. My profession has an absolute fetish for documentation, in which I zealously participate. Memories change quickly; ink (or toner) on paper doesn't.
posted by tellumo at 8:28 PM on May 6, 2010

I doubt you can do a chargeback 6 months after the payment, but you can always try. Call your credit card company up tomorrow and ask them.
posted by Slinga at 10:17 PM on May 6, 2010

When Sunrocket (IP phone provider) went bankrupt AMEX was happy to partially refund my pre-paid year of service.
posted by zeikka at 4:55 AM on May 7, 2010

Regardless of which method you use, you will need to try and remedy this yourself first (if you haven't already). This would be your typical "refund the money you took because you breached the contract" letter. Include a date by which you need a response, like 30 days out. Then, if you are not satisfied with their response, you can start with a chargeback or a small claims suit.

Chargebacks may prove not possible because of some weird rules in place regarding length of time since the charge appeared on your bill. Best to call your credit card issuer and ask before you initiate it. But, once you do initiate it, do it in writing. A conversation on the phone does not constitute a chargeback.

Keep in mind that if the business has no assets you will not have any success with collecting any winnings from a small claims suit. Is the business bankrupt? Are they still in operation? What do you know about their status?

I'm not a lawyer and I'm not holding myself out to be one. Good luck with this!
posted by FergieBelle at 6:04 AM on May 7, 2010

You can do a chargeback six months after the payment, but the merchant can refuse it (the company basically sends a form with the details of the chargeback requested and two checkboxes: yes, I accept, no I do not accept). If they don't accept it goes to arbitration anyways, so you might end up in small claims court either way.

I'm on the merchant side of things, so I'm constantly surprised how quickly people jump to the chargeback route. It's slow and crazy bureaucratic. Not to mention, the form that we receive is mailed to us - through standard mail - and all your credit information is on it, including the entire account number. Right there in black and white. Having to do the research involved (at least for our cases) can be kind of a PITA, especially if the person who initiated the chargeback never gave us any indication that they wanted their money back. 99% of the time if someone had just called and said "I was unsatisfied with the service I received" or "I did not understand what I was purchasing so I have decided I no longer want it" we would have just refunded the money.

As someone who has lots of experience with chargebacks I would only use it as an absolute last resort (I'm almost one-hundred-percent sure you can't do a partial chargeback). Talk to the company first. Send them a letter explaining why you're dissatisfied with their services and how much money you'd like back. Keep a copy of the letter for yourself. Follow up if you don't get a response. Let them know if you aren't able to reach an agreement with them you will be pursuing legal recourse. Take them to small claims court. If they don't show, go for the full chargeback.

(I am absolutely not a lawyer, this is just my advice.)
posted by geekchic at 8:30 AM on May 7, 2010

I recently used threat of a chargeback to get a refund. Chargebacks are a real problem for companies, as they often raise the fees that a company pays, or else increase the "reserve" the CC company holds on captured payments.

An example:

I discovered that Sirius Satellite had reactivated my account after my explicit shutdown. My ex-wife had called in and reactivated it. Her radio, my credit card, good deal for her.

I called, they "couldn't" shut it down, because I didn't know her password and I wasn't the subscriber. I made short work of that. "I do not care. I will not call her and get her to call you. You will shut this account down immediately, or I will initiate chargeback procedures against you. I get to do this, because I am paying. Do it now. You will also mark this account as permanently closed, never to be reopened, noting in the account that the subscriber is litigious and insistent." They buckled immediately and shut it down, refunding my charges. As a programmer who worked in finance for a long while, I knew they could and would. Quite satisfying, actually.

The penalties for excessive chargebacks are significant enough that for a legit complaint, most companies will just refund if you threaten, in my experience.
posted by Invoke at 9:10 AM on May 7, 2010 [1 favorite]

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