The Statutory Chargeback Right
Section 99 of the Consumer Protection Act, 2002 creates a statutory chargeback right for Ontario consumers. Where the consumer validly cancels a consumer agreement under the CPA (for example, by exercising the cooling-off right) and the supplier does not refund within 15 days, the consumer may request that the credit card issuer reverse the charge.
The statutory right is in addition to any card network rules. The issuer is required to process the chargeback request within a prescribed period and to investigate the underlying dispute.
Visa, Mastercard, and Amex Network Chargebacks
Card networks have their own chargeback rules that typically allow a chargeback for non-delivery, defective merchandise, services not rendered, and unauthorized charges. The network rules operate alongside the statutory right in Ontario and may apply even where no CPA cancellation right exists.
Network chargebacks have time limits set by the network, often 120 days from the transaction date or from the expected delivery date. The consumer starts the process by contacting the card issuer, typically in writing, and providing documentation.
Real Example: Undelivered Furniture
A consumer places an online order for furniture, paying by credit card. The supplier takes payment but fails to deliver for three months. The supplier stops responding to emails.
The consumer may request a chargeback from the card issuer under the Visa or Mastercard network rule for non-delivery. If the purchase was made from an Ontario-based supplier and the consumer cancels the agreement in writing, the CPA s. 99 statutory right is also available if the supplier does not refund within 15 days.
How to Request a Chargeback
A chargeback request is made to the credit card issuer, not directly to the supplier. Most issuers provide an online dispute form or a dedicated phone line. The request should include the transaction date and amount, the reason for the dispute, and supporting documentation.
Supporting documentation may include order confirmations, delivery records, correspondence with the supplier, photographs of defective goods, and any cancellation notice that was sent. The issuer investigates and, if the claim is valid, reverses the charge.
- Contact the issuer within the network time limit (usually 120 days)
- Submit documentation of the transaction and the dispute
- Retain copies of all correspondence for the issuer's investigation
- If the chargeback is denied, request a written explanation and consider Small Claims Court