Chargebacks Have Geographical Limitations

Longtime Consumerist reader TBT read the fine print for a credit card she recently opened with Bank of America, and discovered that buried in pages 13 and 14 is a section that limits your right to request a chargeback to your home state or within 100 miles of your home address, and only for purchases over $50. He found this shocking, but, actually, this is a limitation provided by the Fair Credit Billing Act. If you dislike it, here’s a great post of ours on writing effective letters to Congress.


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  1. Wormfather says:

    Bank of America, Bank of Opportunists.

    Yes, every post about BoA, every time. They’ve earned it.

  2. snazz says:

    i love that her initial letter included a rebuttal to the people that would blame the victim here…. not that we are predictible commenters or anything.

  3. timmus says:

    Why is anyone even continuing to use Bank of America?

  4. Dobernala says:

    I’ve seen that verbage in every single credit card agreement. I doubt that this supercedes VISA/MC’s own policies.

  5. Wormfather says:

    @snazz: It’s hard to blame the victims when it comes to BoA. My lady is still involved with them (she just used to love Fleet so much), it’s like an abusive relationship. The hit her with $300 bucks in overdraft fees when she’s already signed up for overdraft protection and then they take back all but $35 bucks and promise her it’ll never happen again and she comes home saying that they’ve changed. Then, it happens again.

    Viscious circle, it’s hard for some people to break free and get out.

  6. jwarner132 says:

    Chase does the same exact thing to me. I just noticed it on my bill yesterday.

  7. Serpephone says:

    Oh man, I just recently got a new credit card in the mail from WaMu. I wonder if that provision is tucked away in all that fine print??? I guess I’ll check it out tonight… fun, Friday evening reading material.

  8. AlexJP says:

    This seems to be standard across all credit cards.

    It is my experience that credit card issuers never invoke this
    provision, instead allowing chargebacks through even if they do not
    strictly conform to this provision.

  9. RagingBoehner says:

    Does that really refer to chargebacks? I thought that was just an additional warranty protection. My understanding is that you can still do chargebacks on anything – but I’m not an expert.

    My Amex and USAA cards both have the same verbiage as the OP’s card

  10. RagingBoehner says:

    @RagingBoehner: If that’s not the case, it’s a real kick in the dick for those of us in DC since there aren’t too many places in my “home state” that are more than 100 miles away…

  11. 44 in a Row says:

    This is literally in every single card agreement that I’ve ever seen. I’ve also never heard of it being enforced.

  12. tande says:

    I noticed something similar to this on one of my cards recently. It was that there was a $50 min on fraud protection and that they wouldn’t cover the first $50 if it was over that.

    Then I read the fine print’s fine print and found out that even though that was the bank’s policy they couldn’t enforce it because it was contrary to Visa’s.

  13. 44 in a Row says:

    Okay, and after doing more research, there’s a reason why it’s in every single card agreement. The headline should really be “Federal Law Restricts Credit Card Chargebacks”.

    12 Code of Federal Regulations §§ 226.12(c)

    (3) Limitations. The rights stated in paragraphs (c)(1) and (2) of this section apply only if:

    (i) The cardholder has made a good faith attempt to resolve the dispute with the person honoring the credit card; and

    (ii) The amount of credit extended to obtain the property or services that result in the assertion of the claim or defense by the cardholder exceeds $50, and the disputed transaction occurred in the same state as the cardholder’s current designated address or, if not within the same state, within 100 miles from that address.26

  14. Dobernala says:

    This is a really bad article. A correction needs to be issued ASAP.

  15. Starfury says:

    I have a Chase card through Amazon.

    I hate Chase…but the reward program is better than any other CC out there so I live with it.

    My wife mailed in a payment the day before it was due; they posted it the day after it was due and charged us interest + late fee. I complained, the CS rep wouldn’t credit the amount. I escalated and the ‘supervisor’ said the same thing. I told them that according to California law (where I live) the postmark date on the payment is considered to be the date the payment is received. She responded with they’re a Delaware corp and that payment is processed in Illinois. I said, fine, I’ll just cancel the card after the next bill. A week later I get a letter from Chase; the charges have been reversed and there was an apology in there. I guess the $60 in charges they’d get one time was a lot less than the merchant fees they get for the $1500/mo I put on the card.

  16. sir_eccles says:

    @44 in a Row: Pfft, you’re no fun :-)

  17. RagingBoehner says:

    @RagingBoehner: Since it’s not included above, the exact language in the section “Billing Rights Summary” on my USAA Mastercard is:

    Special Rule for Credit Card Purchases
    If you have a problem with the quality of goods or services that you purchased with a credit card, and you have tried in good faith to correct the problem with the merchant, you may not have to pay the remaining amount due on the goods and services. You have this protection only when the purchase price was more than $50 and the purchase was made in your home state or within 100 miles of your mailing address. (If we own or operate the merchant, or if we mailed you the advertisement for the goods or services, all purchases are covered regardless of the amount or location of purchase.)

  18. Hawkins says:

    …the disputed transaction occurred in the same state as the cardholder’s current designated address

    Uh… so if I buy something online, from in my house, is that where the transaction occurs?

  19. roadapples says:

    Almost any company with Ameri or America is usually a company lookin to screw you, its sad to see…but BoA customers should know better

  20. RagingBoehner says:

    @44 in a Row: I still am not sure this is about chargebacks — since it talks about the QUALITY of the goods or services. I’m confident that if I order a $25 DVD from and it doesn’t show, my Amex will let me do a chargeback.

    Isn’t this about additional warranties?

  21. 44 in a Row says:

    No, this is about chargebacks. I only copied the limitations section, 226.12(c)(3), but (c)(1), which is what it’s limiting, is your right to chargebacks. Specifically, it says the following:

    (1) General rule. When a person who honors a credit card fails to resolve satisfactorily a dispute as to property or services purchased with the credit card in a consumer credit transaction, the cardholder may assert against the card issuer all claims (other than tort claims) and defenses arising out of the transaction and relating to the failure to resolve the dispute. The cardholder may withhold payment up to the amount of credit outstanding for the property or services that gave rise to the dispute and any finance or other charges imposed on that amount.

  22. 44 in a Row says:

    I’m confident that if I order a $25 DVD from and it doesn’t show, my Amex will let me do a chargeback.

    I am too. In all seriousness, this is practically never enforced; your AmEx, or even the specific BOA credit card referenced in this article, will still almost certainly let you file a chargeback. But it’s federal law, and it’s included in the agreement.

  23. aikoto says:

    Credit Union. Credit Union!

    Avoid these “banks” at all costs.

  24. RagingBoehner says:

    @44 in a Row: Sounds reasonable. The old mandatory disclosure trick. I guess the federal gov’t has to enforce a lowest common denominator.

    This is a very misleading post and should be removed or at least corrected ASAP.

  25. axiomatic says:

    We are apparently in the final thrashings of the death knell for BofA.

    Good riddance…

  26. nequam says:

    @roadapples: American Express isn’t bad, I don;t think.

  27. camman68 says:

    @timmus: Your are supposed to read the article BEFORE you submit a comment.

  28. Buran says:

    @Wormfather: I realize that some people don’t like some banks (or all banks) but blasting a bank for obeying federal law (which is not optional for anyone, apparently excepting King Georce the Second) is absurd.

  29. roadapples says:


    From a person who used to accept there card at my business, (not anymore, and i laughed when people try to use them) i can assure you that they are…and as a person who made the mistake of buying one of there gift cards for, i can assure you once again that they do indeed suck

  30. chrisjames says:

    @RagingBoehner: F&!$ ME! Your comment prompted me to check my USAA MC terms, and they cover all sorts of purchase insurance. Rental insurance. Price matching. Travel cancellation and up to $300 for emergency purchases in case of delayed baggage while traveling. Declaration of war voids this, but, well, I can live with that. F’ing boon!

    But, I can’t find anything about chargebacks or disputes. I’m sure USAA will cover anything just because they can, agreement or not, except in case of declaration of war I guess.

  31. theblackdog says:

    @chrisjames: I know it’s somewhere about chargebacks in the terms, I read it a month ago when I got my MC from them.

    Now I’m going to have to check up on the purchase insurance. I’d start using it now, but I have a promotinal APR on my balance transfer and I am paying that bad boy off before I charge anything else.

  32. Wormfather says:

    @Buran: Yeah, uh huh, but you see, my comment was before we all knew that they were stating what the minimum protections under federal law were. A simple as persuent to [insert law here]etc. would have solved a lot of greif. However it is COMPLETELY reasonable, given BoA’s history of just being a bane on the face the earth to assume, in conjuction with this post, that they were once again trying to weasle, no screw their customers out of money.

    I do appriciate you attention to this matter however.

    Have a great weekend!

  33. Wormfather says:

    @Buran: Oh and I dont understand this…

    “…apparently excepting King Georce the Second…”

  34. Buran says:

    @Wormfather: It’s not as if the relevant laws for chargebacks haven’t been mentioned here many, many times. And no, the assumption isn’t reasonable considering how many times it’s been mentioned that there’s a $50 lower limit on the law in question — among other associated facts about it.

    You know what they say about the word “assume”.

  35. Buran says:

    @Wormfather: It’s a typo, should have said “George” and then hopefully it will be a bit more sensible. I don’t talk about politics much but there you go.

  36. 44 in a Row says:

    It’s not as if the relevant laws for chargebacks haven’t been mentioned here many, many times. And no, the assumption isn’t reasonable considering how many times it’s been mentioned that there’s a $50 lower limit on the law in question — among other associated facts about it.

    On the other hand, it’s not as if the article reflects that… and if the site editors aren’t aware, can we really fault lowly plebes such as ourselves?

  37. Buran says:

    @44 in a Row: True… so sort of I see the point, but still, consider how long articles would get if we didn’t use our memories and recall past discussions.

  38. 44 in a Row says:

    True… so sort of I see the point, but still, consider how long articles would get if we didn’t use our memories and recall past discussions.

    I agree in principle, but honestly, this article reads as if this is a policy unique to Bank of America. Yes, it’s technically true on its face, but calling it out as a Bank of America issue, and saying that the letter-writer “discovered” this as if it was a brand-new clause invented by Bank of America to “kill the chargeback”, is definitely misleading.

  39. bwcbwc says:

    Sounds like this is being interpreted bass-ackwards. Basically, the chargeback coverage described is the minimum required by federal law. That’s why it’s in the agreement. You can sue the bank for violating the federal limits or for violating the cardholder agreement, but you can’t sue them if they violate the higher standard that applies more commonly. The other thing is that this isn’t a condition on chargebacks for stolen CC or other fraudulent charges, this is the federal minimum for merchant disputes.

    On the other hand, with the banking industry the way it is, maybe we’re one short step from banks adhering to the word of the law, rather than the spirit.

  40. Geekybiker says:

    I think this read more like you can *always* make a charge back if those conditions are met. If they aren’t met the CC may still issue a charge back but isnt required to.

  41. Chris Walters says:


  42. 44 in a Row says:

    As nice as the correction is, it’s really not great practice to just wipe out an article and re-write it like that. It makes the comments seem utterly nonsensical, especially since this isn’t so much a correction as it is a completely new article.

  43. Buran says:

    @44 in a Row: Headline says “Chargebacks have geographical limitations”.

  44. TBT says:

    OP here…REALLY wish I could have seen the original article! I took a few hours off from my obsessive Consumerist reloading, and now I can’t find a cached copy anywhere. Anyone have any links? I’m wondering what was so bad in the orig article, since I didn’t see it and someone commented on my letter so I assume it was posted originally. Considering cancelling the card, although I had no clue this was “common” or “required by Federal law.”

  45. Chris Walters says:

    @44 in a Row: I simply added a correction and let the original article stand, but Ben replaced it with the new text. You can contact him if you have a problem with it.

  46. trujunglist says:

    Think I’ll cancel my B of A card now.

  47. exkon says:

    Thanks for the info “44 in a Row”.

    I’ve been a BofA customer for over 5 years now… Not a SINGLE problem with them.

  48. tedyc03 says:

    It is conceivable that when you purchase something online, the transaction took place within your living room, thus meeting the requirement. I don’t know if this has ever been tested but it might be worth it.

  49. SayAhh says:

    I wonder if credit card issuers from the state of New York will first tax you on online purchases (pending legislature), then refuse your chargeback because the physical store (if any) is more than 100 miles from your mailing address (I live in California).

  50. strwnderer says:

    This rule applies only if you are filing a chargeback for the reason:

    “problem with quality of goods and/or services”

    This does not apply for any other chargeback type…

  51. JulesWinnfield says:

    @AlexJP: In fact, this language has been standard for over 30 years.

  52. Anonymous says:

    I’d expect many of USAA’s customers to care about the declaration of
    war voiding, given the nature of their field of membership.