Chargebacks are no different than simply ceasing to send in payments for a service: It sounds pat, but can haunt you years later when massive penalties and interest appear on your credit report.
No, stopping payments is the same as ceasing to send in payments.
The chargeback is a contractual dispute resolution process. The consumer says they shouldn't have to pay for a valid reason. The merchant gets to provide evidence otherwise. A decision is made and both parties have agreed in advance (via the merchant agreement and cardholder agreements) to be bound by that decision. This is one of the consumer protections that make using plastic safer than using cash/checks.
Outside of the vendor's relationship with the credit card company, a chargeback is identical to ceasing payment. The credit card company has zero control or influence over contract disputes. At best they can threaten a vendor relationship for disregarding their arbitration (which vendors will do simply because they have to pay somewhere in the range of $700 to pursue), but they won't and don't do that.
So you can find stories by the thousands of people who won a chargeback, and then were hounded by collections and ruined credit. Because Visa and Mastercard don't overrule contract law.
Credit cards are safer/more powerful simply because money is influencing, and he who controls the money controls the relationship. They don't override contract law, however.
Source please? Every time I've filed a chargeback on my credit card (American Express), they have been completely transparent with the status of it. When I submit the chargeback, I'm credited the amount of it. If I lose it, I also lose that credit, and I owe the amount of the chargeback.
Are you saying that comcast will negatively affect your credit score because you submit a chargeback to them after they failed to cancel your service?
Are you saying that comcast will negatively affect your credit score because you submit a chargeback to them after they failed to cancel your service?
I believe that is indeed what the parent post meant. If you do a chargeback, that just means you did not pay the Comcast (or whatever) bill. Comcast will likely not treat that any different than if you didn't pay, if they feel the bill is valid; your account will be sent to collections, and also show up negatively on your credit report.
Dealing with small contract issues like that with a large, bureaucratic company can be like cutting your nose off to spite your face; you cause yourself more long-term damage. You may be 100% in the right, just like a pedestrian in a crosswalk; it is still in your benefit to dodge the bus.
IANAL, but in a contract dispute, at least with a small-ish charge, the best course is to pay the bill (under protest/duress; you can indicate such in the comment on the check). Then file in small-claims court. I would reserve chargebacks to companies that have scammed you (not just crappy businesses, like Comcast/etc.), fraud / identify theft, etc.
Of course, ideally you would want to get the issue cleared up before going down that route, as well.
Yes, they'll send you to collections. The collections company will take their word that the debt is valid and try to contact you. Until you pay them, they will report the debt on your credit. If you manage to convince them the debt is invalid, you will still have to separately convince all three credit agencies to remove the listing. Comcast's large bureaucratic collections department will just send you to a different collections agency until you pay up. You can then get a lawyer to stop them, but comcast won't just back down. They'll reply to the lawsuit until a judgement is given. This will cost thousands of dollars to complete.
The other alternative is to play their game with their customer service and get them to agree to properly cancel the service.
Your credit card company is not an arbiter of contracts. They are nothing more than a payment method, and the only reason they have any process whatsoever is to try to maintain relations with the vendors who they also deal with.
If you have a contract with a vendor, decide that you don't like the product any more and decide to cancel through a chargeback, that has literally zero influence on the status of the contract with the vendor. You've simply failed to make a payment. Whether the credit card company likes your recording or not is irrelevant.
So those vendors, which in this case is Comcast, can absolutely destroy your credit rating in such a case. I mention this because invariably when payment disputes come up, someone says to just do a chargeback, yet this is no different than simply deciding to stop paying for something.
I'd always figured that one of the conditions of being able to accept a particular type of card was accepting their judgement in chargeback situations. Huh.
This recording would make a pretty effective "I dispute the debt" piece of evidence, regardless.
If Comcast sues you for payment then you go to court (or more likely to an arbiter chosen by Comcast since that's what you agreed to in your contract) where evidence matters.
But instead of that, Comcast simply reports you to the credit bureaus for non-payment. The law gives them immunity for doing so -- even if they submitted intentionally false information for malicious reasons, you can't sue them for libel. And you credit score affects your ability to function in US society: it is used for all granting of credit, for deciding whether to allow you to open a checking account, for deciding whether to hire you at a job -- it is so significant that you are forced to care. You can open a dispute of facts with the credit reporting agencies, but be prepared to spend large amounts of time doing so.
