Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to protect businesses from charge-back fraud.

Chargebacks form part of commercial card scheme rules which allow a cardholder to request a refund though their debit card issuer (e.g. their bank) in certain circumstances, for example in cases of non-delivery, or if a purchase is not successful.

The Government considers chargebacks to be an important consumer protection. However, it is important to note that the chargeback facility is not a statutory protection, but is instead a commercial offering provided by card schemes at their own discretion, and which participating banks, merchants, and relevant parties subscribe to. Commercial card schemes have established processes in place to investigate chargeback claims from customers, and to mitigate against chargeback fraud.

The Government works closely with industry to close down the vulnerabilities that fraudsters exploit. The Financial Conduct Authority (FCA) requires banks to maintain effective systems and controls to prevent the risk that they might be used to further financial crime. This includes controls to prevent fraud.