126 CONSUMER FINANCIAL PROTECTION BUREAU – CONSUMER CREDIT CARD MARKET REPORT
card company remove an incorrect or fraudulent charge from their bill. During the pandemic,
dispute volume rose given the surge of travel-related cancellations, supply-chain delays, or
failures to deliver, and a reported increase in fraud attacks.
253
Given the rise in dispute volume
and increase in chargebacks, or credits awarded through the dispute resolution process, the
financial impact of disputes on many merchants grew. Visa blamed a rise in “friendly fraud,” or
disputes on purchases that were authorized and correctly billed.
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Chargebacks for products or
services purchased and received by the cardholder may increase prices for other consumers as
merchants work to recover their costs.
After adjusting for the growth in purchases, increased dispute rates drove much of the rise in
chargebacks. In 2022, cardholders at major issuers disputed almost $10 billion in purchases and
received $6 billion in chargebacks. Dispute volume rose 50 percent from 2019 levels of $6.5
billion, while chargebacks increased over 80 percent from $3.2 billion over the same period.
After a spike in the second quarter of 2020, disputes and associated chargebacks fell in the
remainder of that year. In 2019, consumers disputed about $3.02 out of every $1,000 spent and
received $1.49 in return; in 2022, they contested $3.40 and got $2.03. During the pandemic,
cardholders became more accustomed to disputing transactions, partly due to the increase in
travel-related cancellations.
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At the same time, updates to issuers’ apps and online portals over
the past few years have made it easier for cardholders to question a charge. Quarterly volume
in error as well as any related charges that accrued. See 12 C.F.R. § 1026.13(c), (e), and (f). TILA’s implementing
Regulation Z defines unauthorized use as “the use of a credit card by a person, other than the cardholder, who does
not have actual, implied, or apparent authority for such use, and from which the cardholder receives no benefit.” 12
C.F.R. § 1026.12(b)(1)(i).
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Christopher Elliott, How to file a credit card dispute for your canceled vacation- and win, Washington Post (Apr.
8, 2020), https://www.washingtonpost.com/lifestyle/travel/how-to-file-a-credit-card-dispute-for-your-canceled-
vacation--and-win/2020/04/08/316e7b7e-7807-11ea-b6ff-597f170df8f8_story.html; Emma Fletcher, Pandemic
purchases lead to record reports of unreceived goods, Federal Trade Commission (Jul. 1, 2020),
https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2020/07/pandemic-purchases-lead-record-
reports-unreceived-goods; AnnaMaria Andriotis & Orla McCaffrey, Borrower, Beware: Credit-Card Fraud
Attempts Rise During the Coronavirus Crisis, Wall Street Journal (May 27, 2020),
https://www.wsj.com/articles/borrower-beware-credit-card-fraud-attempts-rise-during-the-coronavirus-crisis-
11590571800?mg=prod/com-wsj.
254
Nathan Bomey, Credit card charge disputes on the rise as consumers cheat businesses, Axios (Dec. 9, 2022),
https://www.axios.com/2022/12/09/credit-card-fraud-chargebacks-visa. Accordingly, Visa implemented new
guidelines in April 2023 called the “Compelling Evidence Rule 3.0 (CE3.0)” that work to combat these types of
charges by providing merchants a framework for disputing fraud claims for card-not-present transactions where the
consumer was logged in or otherwise showed proof of identity. Compelling Evidence 3.0 Merchant Readiness, VISA
(Mar. 2023), https://usa.visa.com/content/dam/VCOM/regional/na/us/support-legal/documents/compelling-
evidence-3.0-merchant-readiness-mar2023.pdf.
255
Christopher Elliot, How to file a credit card dispute for your canceled vacation- and win, Washington Post (Apr.
8, 2020), https://www.washingtonpost.com/lifestyle/travel/how-to-file-a-credit-card-dispute-for-your-canceled-
vacation--and-win/2020/04/08/316e7b7e-7807-11ea-b6ff-597f170df8f8_story.html.