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Charge-back is the return of funds to a consumer that is initiated by the consumer’s issuing bank. A consumer may initiate a chargeback by contacting his/her issuing bank, and filing a substantiated complaint regarding one or more debit items on his/her credit card statement. Charge-back is a consumer's last line of defense against unscrupulous merchants. Charge-back also providea a means for reversal of unauthorized transfers due to identity theft. [United States v. Guaranty Trust Co., 293 U.S. 340 (U.S. 1934)]
Various types of charge-back are:
1.Bank error correction ;
2.ATM reversal ;
3.Direct deposit chargeback ;
4.Returned check deposit.
Fraudulent transactions is one of the most common reasons for charge-back. Other types of charge-back are related to technical problems between a consumer and an issuing bank, where a customer is charged twice for a single transaction.