The next time you think you will be safe if your credit card is stolen because your bank will be there to help you and do a chargeback, think again. If you enter your credit card and personal information onto any site, you can be held liable and responsible for it by your bank. According to the Mercury News, a bank can tell you that since you yourself entered the credit card information on a site, whether it is a bogus Paypal site or any phony site which is out to get your money or use your identity for something similar or worse, you cannot have a chargeback for any such charges.

The bank can claim, as it has been proven, that since you yourself gave the credit card information, you gave the site permission to use that information with your consent. Thus, the bank cannot perform a chargeback [reverse the charge] for you. In the story cited, however, the charge was reversed.

A chargeback is a credit card transaction that is challenged by a cardholder or merchant bank and sent back through interchange to the bank of account (cardholder or merchant) for resolution. Usually, this is the only last line of defense of retrieving your money if your credit card has been used without your approval. However, the recent trend of banks asking for more information than before regarding credit card theft report shows the frustration of the banks from going through the process of contacting the companies who have placed the charge and to get the money back. Usually, when the bank gives you back the money [which is usually within 10 days], it is doing it from its own pocket till the dispute is resolved.

Businesses, including banks, have figured out that providing too much protection in things which maybe avoided, should be avoided to keep costs down in times where economy is not performing at its fullest. However, the banks are not fully leaving the customers side. This is a small test to see if the process of siding with the customer 100% in the case of a wrong charge can be changed. Such a change will mean less headaches and more money for the banks [as they will not have to pocket the customers accounts with their own money, even if the chargeback is not successful] and less for the customer.

Consumers should be more careful in using their credit cards, doing as much as possible to avoid trying cards at new places [whether online or offline] without being ready to loose the amount being spent, in worst cases. Relying on a chargeback, even if your bank guarantees it, can be a time-consuming process. A recent chargeback process initiated by me with my bank resulted in around 15 days for a chargeback to be reversed, a myriad of phone calls to the company [in UK] that placed the charge, and a paperwork that took more time to fill out than what you fill at a hospital for a new patients checkup.