On Nov. 2, Citi proclaimed itself the first financial institution to allow cardholders to dispute charges from within a mobile app. I applaud the effort, but one aspect of the way Citi did it is certain to aggravate a big chunk of the merchant community.
Many cardholders who call their card issuer to dispute a transaction simply don't recognize the charge, though it may be legitimate nonetheless. This happens when, for example, you buy gas on a trip and don't realize that charges from that gas station are going to show up on your statement as something such as "Acorn Properties," a name that was nowhere in view at the gas station.
Another common dispute-that-isn't involves purchases that are fairly forgettable. Let's say that you get your statement and see Amy's Bagels among the merchants listed there. That can't be right, you think, because you hate bagels. (This is purely hypothetical, folks. There have to be people somewhere who hate bagels.) So the customer service rep checks and tells you that the purchase was for a newspaper. Then it all comes back to you: You wanted to buy the local paper and so went into that bagel shop. End of dispute.
Here's what merchants don't like about all of this: They would like these unrecognized charges and forgotten purchases to be resolved without ever rising to the level of an actual dispute. The reason they feel that way is that many financial institutions, faced with a complaint about a very small charge, will decide the entire matter isn't worth the time to investigate, and so they will simply charge back the merchant. But what's small beans to the financial institutions can matter a great deal to a small merchant.
And here's the thing about Citi's new mobile interface: It has placed "unrecognized charge" as an option under "What's the reason for your dispute?" (You can see what I mean in the promotional photo from Citi at the top of this page.) It forces cardholders to elevate queries that could be easily resolved to the level of disputes.
Citi should open with "Is there a charge you don't recognize?" which would then branch into two options: "I'd like more information about this charge so I can determine if it's legitimate or not" or "I already know for certain this is an incorrect charge. I want to dispute it."
It's a simple fix and would turn the app from a good idea to a great one.
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