The Dispute Communication- Cardholder Letter

Complaint Letters!

We’ve all been there, right?

Writing a complaint letter runs in our blood because every issue requires a formal complaint as it is for the records.

And that habit starts right from our schooling days because, at some point, our parents would have written a complaint letter expressing a concern or dissatisfaction about a certain issue at school with the hope that they would resolve it.

So, you might be thinking as to why we are digging up your childhood memories?

Here’s why it has a deep connection to payment disputes!

Imagine you find an unauthorized charge on your credit card. How will you convey it to your bank for a quick response?

Through a complaint letter, of course! It is known as the “Cardholder Letter”

Alright…let’s get down to business!

What is a Cardholder Letter?

Cardholder letter aka dispute letter is a formal written communication from a credit or debit cardholder to their issuing bank to contest an unauthorized charge on their account. This is an essential component of the dispute resolution process, allowing cardholders to articulate their concerns clearly and formally.

When Cardholder Letter is Important?

The cardholder letter is important in the situation when the cardholder,

• Spot a charge, they didn’t authorize (Unauthorized Transaction)
• Was charged for incorrect or duplicate charges on the statement (Billing Errors)
• Paid for something that was not delivered (Non-Delivery of Goods/Services)
• Received a product/service that was not as described or defective (Quality Issues)
• Dispute Inaccurate information related to a credit account (Credit Report Errors)
• Didn’t receive the refund that was promised (Refund Issues)
• Charged even after canceling the subscription requests (Subscription Cancellations)
• Account has been compromised (Fraudulent Charges and more)

Why Cardholder Letter is important?

• Consumer Protection: Empowers cardholders to challenge unauthorized charges on their credit/debit cards.
• Clarity: Helps clearly articulate the issues the cardholder is facing, whether it’s an unauthorized charge, billing error, or a problem with a product or service, etc.
• Fair Billing Practices: Help enforce fair billing practices by holding merchants and banks accountable.
• Resolving Disputes: Provide a formal mechanism for resolving disputes between cardholders and merchants.
• Documenting Issues: Create a written record of the dispute, which can be helpful in case of future legal actions or disputes.

Well…before getting deeper into the discussion, let’s take a quick trip into the history!

Evolution of Cardholder Letter:

Pre-Digital Era:

Before the advent of technology, this letter was primarily a physical document. When a cardholder disputes a charge, they would typically follow these steps:

1. Written Letter: The cardholder would write a formal letter to their bank, outlining the disputed charge, the reason for the dispute, and any supporting documentation.
2. Postal Mail: The letter would then be mailed to the bank’s address.
3. Bank Processing: Upon receipt, the bank would manually process the letter, involving physical filing and manual data entry.
4. Investigation: The bank would investigate the claim, which could involve contacting the merchant and reviewing relevant documentation.
5. Resolution: The resolution process, including any necessary correspondence with the cardholder and merchant, was also primarily paper-based.

Post-Digital Era:

With the rise of technology, the process of filing and resolving disputes has undergone a significant transformation:

Online Portals/mobile apps: Many banks now offer online portals where cardholders can directly file disputes. Some banks have integrated dispute filing into their mobile apps, allowing cardholders to raise disputes with a few taps on their smartphones.

But here is the bolt from the blue!

Although technology has advanced and dispute filing has become a bit easier compared to the pre-digital era, the 3rd, 4th, and 5th step of the pre-digital era remains unchanged even in the post-digital age.

That sounds a bit daunting, doesn’t it?

But wait!

Is there a fix for this mess?

Absolutely!

The solution, my friend, is the UDM aka Unified Dispute Management

How does UDM solve this mess?

After the integration of UDM into the bank’s mobile app/web portal, here is how UDM solves the mess!

Starting from step 1, the cardholder complaint will be collected through a set of inbuilt pre-defined questionaries. Post that, the complaint will be registered successfully enabling the bank to take appropriate action.

That’s not all, any communications to the cardholder will be sent as the updates happen. Here are some examples of the communication sent to the customer post their payment complaint:

• Dispute acknowledgment which confirms the receipt of the complaint (approval/denial status) and provides an estimated resolution timeframe.
• Supporting document request and collection for the disputed transaction
• Dispute resolution acknowledgment (chargeback won/lost status)

But how do Banks benefit from this?

• First and foremost, banks will get “Happy Customers” because the customers are kept in the loop about their dispute status at every stage.
• By automating these processes, UDM significantly reduces the time required to resolve the dispute, enhancing customer satisfaction and loyalty.

And that’s not it!

UDM does even more, but’s that a topic for another day!

Get in touch with us today to know more about UDM and how it can help you regulate, tailor, and modernize your dispute process and responses.