Giambrone & Partners re-gain £272,000 for a client duped in a complex Cryptocurrency Scam using the Chargeback Procedure

The lawyers in Giambrone & Partners banking and financial fraud litigation team have successfully obtained £272,000 by means of the chargeback procedure for our client who was caught by a cryptocurrency fraud. Giambrone has now retrieved the entire amount our client previously lost to cryptocurrency fraudsters.

Chargeback is a procedure that obliges financial institutions to refund the money paid out via a debit or credit card for a product or a service that that either proved to be inferior and not as described or was not provided at all or you were the victim of a fraud or scam or if your debit or credit card was used by a third party without your knowledge. If successful the money lost in such a transaction is paid back by the bank that issued the card under section 75 of the Consumer Credit Act 1974, ‘Liability of the creditor for the breaches of by the supplier’.  The bank issuing the credit or debit card assumes the creditor liability due to the fact that it issued the payment card.

Financial Conduct Authority (FCA) points out that chargeback is not a statutory right, however, it provides legal protection under the circumstances defined.  The card issuer and the card provider’s bank will normally work together to look into the circumstances of a claim.  The bank will be entitled to use discretion on whether to grant a chargeback or not depending on the specific characteristics of the case and the accompanying evidence submitted.

The most common reasons for claiming chargeback are inadequate goods, cancelled services, disputes involving the quality of goods or processing errors and fraud.  There are various criteria that must be fulfilled in order to be able to claim chargeback from your card provider:

• The purchase or payment must have been made using a credit/debit card.
• Once you have contacted the bank you can ask to open a case for chargeback so that the bank can investigate the nature of the transactions.  
• A chargeback request can be submitted in relation to a single transaction or to a set of transactions, on the condition that all the requirements in order to seek a chargeback are met.

There are additional procedures required when the chargeback request is made in connection with a financial fraud. 

Demetri Bezaintes, an associate in the banking and financial fraud litigation team commented “once you are aware of your losses you have a limited period of time in which to act, which can pose a problem to victims of investment fraud as investigations into such frauds can take a considerable length of time.” He further remarked “Giambrone has extensive experience in dealing with a range of investment fraud enabling the lawyers to identify matters that are suitable in relation to a chargeback procedure claim at the earliest opportunity and submit a claim without delay”

Furthermore, there are differing time periods relating to different types of loss. Initially, there is a period of 120 days to submit a chargeback procedure claim.  The period of 120 days runs from various points, in some cases, it runs from the moment you are aware that you have been the victim of a fraud, in others the period runs from the moment of the transaction and with online transactions it runs from the moment the payment was delivered.

In order to ensure that you have the best chance of recovering money lost to cybercriminals or investment fraudsters the lawyers at Giambrone & Partners strongly recommend seeking specialist legal advice to assist in navigating through the challenge of cryptocurrency scams and frauds.  Our lawyers’ expertise can deflect any attempts to avoid settling a claim for chargeback resulting from an investment fraud involving a broker or other third party due to the perception that the transaction was aligned to gambling rather than the provision of a service.

For more information on whether you can submit a chargeback claim please click here