Debt Collection & Chargeback Disputes: Rights for Revenue Recovery

dccdIs it Possible to Begin the Collection Process Before Representment?


Debt collection and chargeback representment are two remedies merchants can employ to recover funds that are rightfully theirs and ensure viable cashflow.

Merchants: Understand Your Rights

Both debt collection and chargeback representment help merchants obtain their rightful profits.

If a merchant engages in debt collection, a debt collection agency is usually contracted on the merchant’s behalf to obtain payment for outstanding debt.

Debt collection rights were granted to merchants in the Fair Debt Collection Practice Act of 1977, and the process is now regulated by the Consumer Financial Protection Bureau. Debt collection practices are carefully monitored by both state and federal governments. Merchants who choose to collect on outstanding debt should hire reputable agencies and abide by all governing legislation.


A chargeback representment asks the issuer to reevaluate the consumer’s claim and review documentation that’s intended to validate the original charge. The chargeback process is governed by rules established and monitored by the card networks (Visa, MasterCard). To achieve success, merchants who choose to engage in chargeback representment must ensure all regulations are understood and abided, or they should hire professional assistance.

Finetuning the Timing: When Should Debt Collection and Chargeback Disputes Be Initiated?

While merchants have every right to execute debt collection and chargeback representment, both processes are quite complex. Understanding the timing of each task and how the outcome of one process will impact the other can help merchants determine the best course of action.

Chargebacks911 can improve your chargeback dispute success rate, advise you on debt collection, and show you ways to optimize overall profitability.


Deciding when and if a merchant should pursue debt collection is difficult. If the policy is too lenient, cashflow issues and a shortage of profits could lead to the business’s demise. However, a policy that is too strict could alienate valuable customers who only need a temporary reprieve.

On the other hand, forfeiting chargeback representment rights means needless revenue loss, while an overly aggressive approach without sufficient compelling evidence could damage the merchant’s reputation.

It is important to consider the validity of a case, as well as the timing. In some cases, it might be advantageous to choose one route over the other, but other situations might allow for both debt collection and chargeback representment—yielding optimal profitability.

Can Merchants Begin the Collections Process Before Representment?


The answer is, in fact, yes—merchants can initiate consumer collections before submitting a chargeback dispute to reduce the risk of debt aging. As Chargebacks911® COO, Monica Eaton-Cardone, explains:

A chargeback is a complaint handled by the card network, while a debt owed is handled by the merchant. The merchant can attend to the debt and breach of contract while the card network is adjudicating the transaction itself. Debt collection may also include operational fees, attorney fees, collection fees, and more, but a chargeback pertains only to the cost of the original transaction."


Still Have Questions?

If the concepts of debt collection and chargeback management—and their simultaneous execution—present additional concerns, contact our chargeback experts today. Not only will Chargebacks911 improve your chargeback dispute success rate, we can also advise you on debt collection and the most efficient ways to optimize overall profitability.

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