Consumer complaint received 2020-12-29
Company: CAPITAL ONE FINANCIAL CORPORATION
State: MN
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Problem with a purchase shown on your statement
Sub-issue: Credit card company isn't resolving a dispute about a purchase on your statement

Complaint:
This new complaint is in addition to CFPB complaint id XXXX. After I submitted the previous complaint but before the CFPB submitted it to XXXX XXXX I received a call from XXXX at XXXX XXXX executive relations on XXXX. Ms. XXXX and I had lengthy conversation about the matter and new information has become available since that conversation. 

As of this writing I have left a message for Ms. XXXX but have not received a return phone call yet. 

Ms. XXXX informed me that the reason my dispute was not processed or accepted by the merchant bank is that there is no chargeback rights or chargeback reason code for my dispute. More specifically I was informed that under the Visa chargeback code 13.1 " item not received '' the cardholder must return the merchandise before a chargeback can be processed. However, in my initial complaint I addressed this issue stating that the cardholder inquired with merchant to return the merchandise and was only told by the merchant that there would be a " return fee '' if I returned it. 

Upon review of Visa Core rules for 13.1, invalid disputes include " a transaction in which merchandise is being held by the cardholder 's country 's customs agency. '' This seems to clearly state that reason code 13.1 was not a valid reason for chargeback in this matter.

The merchant response to the chargeback stated that the merchandise was being held in customs for the cardholder to pick up. At this point it was the duty of Capital One to change the chargeback reason to code to the correct code. Capital One had 30 days from the time they received the merchant response to submit a pre arbitration VROL filing with the correct code. Capital One failed to submit that information and failed to call me or request the needed information to properly submit a pre arbitration filing. See copy of XX/XX/2020 letter from Capital One. Capital One knowing that the merchandise was held in Customs requested " a statement saying that neither you nor anyone authorized by you has signed for or received the merchandise. '' and also " If you received the merchandise but want to continue the dispute, include a detailed description of the reason for your dispute ... .. '' Neither request was pertinent to the dispute with merchandise being held in customs as : 1 ) My XX/XX/XXXX reply to the XX/XX/XXXX letter did say I had never received the merchandise however this reason would only be applicable if the merchandise was not held in customs. 2 ) Capital One requested more documentation only if I had received the merchandise. I had not. 

It appears there is not a chargeback code applicable to the dispute. This dispute arose out of the breach of a written contract between cardholder and merchant. Specifically the merchant seller was required to ship the merchandise by XX/XX/XXXX U.S. time. The merchant did not ship until XX/XX/2020. The contract calls for the merchant to refund the cardholder in full if the merchant ships late. Further it was agreed that the merchandise would arrive in XXXX by the end of XX/XX/2020. It did nor arrive until XX/XX/2020. 

There appears to be no chargeback reason code for " breach of contract '' that I have found. 

Since there is no Visa reason code, this matter seems to fall under the Visa compliance rules. These rules are applicable when there is no dispute rights. There is also no deadline to file a VROL pre compliance notice. See Visa Core Rules section XXXX. 

Every merchant has an agreement with it's bank and Visa. The merchant promises good faith dealing with cardholders. Breaching the terms of sale with a cardholder would be a breach of Visa rules. Here the written contract was an integral part of the Visa transaction. The merchant is not in compliance with Visa rules and therefore a pre compliance VROL submission should now be made by Capital One to the merchant bank. 

Attached documents : Page from merchant seller response stating the goods are being held in customs. 

Section 5.10 from Visa Supplementary rules stating that a merchant must disclose on its website the return policy. Here the merchant disclosed no specific return policy. 

Section 4.12 Visa Supplementary rules stating all obligations under the merchant agreement must be performed in compliance with applicable laws. A breach of written contract with cardholder would be in violation of all applicable law. 

Section 11.12 Compliance section of Visa core rules stating when the Visa member may submit a pre compliance attempt. This includes when the member has no dispute right as in this case.

Visa core rule 1.5.2.1 reiterating rules from section 4.12 Visa Supplementary rules XX/XX/2020 letter from Capital One to cardholder. 

Visa core rule 13.1 invalid disputes showing that this dispute reason is invalid when the merchandise is being held in customs.

Company response to consumer: Closed with explanation