Chargebacks

Key Learnings:

• While some credit cards offer enhanced protection for timeshare-related transactions, not all do so. It is important that you be aware of your agreement details before taking any financial risks.
• When you review the charges on your banking and credit card statements, check to make sure all payments were authorized, but also check to ensure all information is consistent with the purchases you made.

Ms. B and her friends attended a presentation for real estate investment opportunities in the Caribbean. The salesperson explained that the investment was for a condominium timeshare located on a desirable waterfront location frequented by tourists.

The sales presentation impressed Ms. B and she signed a purchase agreement on February 1, 2015. She made three deposits using her credit card in the amounts of $3,000, $3,500, and $4,500 that month. Sometime later, Ms. B began having doubts about the property and she tried to get more information. She sent numerous emails but did not receive a satisfactory response from the salesperson. On April 5, 2015, she contacted the bank and requested refunds on the three payments.

The bank refused to provide refunds. It viewed the matter as a contract dispute between Ms. B and the timeshare company. Ms. B had authorized each transaction. There were no signs of fraud. The bank noted that the purchase agreement Ms. B had signed allowed for a 10-day "cooling off" period and that had passed. Ms. B only expressed doubts two months later. Unsatisfied, Ms. B came to OBSI.

We interviewed Ms. B and the bank during our investigation. We also reviewed the relevant documentation. Based on the information provided by Ms. B and the bank, this appeared to be a contract dispute with the timeshare company.

We enquired with the bank whether they knew of any issues with this timeshare company. The bank explained that it kept a list of “high-risk” merchants for fraud detection purposes and there were no signs of suspicious activity before or after Ms. B’s complaint about this merchant. We carefully reviewed the terms and conditions of Ms. B’s credit card. While some cards offer enhanced protection for timeshare-related transactions, this particular credit card provided standard protections. There was insufficient evidence to conclude the timeshare company was engaging in fraudulent activity.

However, we examined the payment transactions to ensure they were properly authorized by Ms. B we noted that the merchant name on the $3,500 transaction slip did not match that of the timeshare company. This was of concern given that Ms. B thought she was dealing with the timeshare company during the entire process. The bank agreed to reverse the $3,500 charge. We believe this was a fair and reasonable offer under the circumstances.

Complaint upheld

(2015)