I’m returning to the 1time airline chargeback issue this week, for good reason – some banks have shifted the time frames.

Last week I reported that the banks were processing chargeback requests immediately, rather than waiting until after the date of departure on their clients’ prepaid tickets, because the airline had been liquidated – in other words, there was no chance that those tickets would be honoured.

A quick recap – a chargeback is a protection offered globally by Visa and MasterCard, via the issuing banks, that sees transactions being reversed if the consumer does not get what they paid for.

“Service not rendered” is the official term. The rules state that the date of the paid-for service has to have passed in order for it to be established that the service was not provided.

However, in the case of a liquidation, it is clear that the service won’t be provided, and chargebacks are processed from the date of the liquidation. So it appeared that the banks were going ahead with 1time victims’ chargeback applications.

Nedbank said in a November 6 statement to Consumer Watch: “Under normal circumstances, clients would have had to wait for their departure date in order to raise a chargeback, however due to this being liquidation, clients can proceed with raising a chargeback.”

And it seems they’ve stuck to that, if Camps Bay-based travel agent Ilonka Haarman’s experience is anything to go by.

“She booked three Cape Town-Joburg tickets on 1Time for clients in late June for December 23, using her Nedbank Visa credit card.

On reading about chargeback in Consumer Watch, she applied for chargeback on November 6. On November 11, she was advised that a refund of R2 470 had been credited to her account.

Quite a few Absa clients have also emailed me to say they’ve received refunds for their 1Time tickets, bought with their Absa credit card.

But all week I’ve been receiving e-mails from First National Bank and Standard Bank’s affected 1time ticket holders complaining that in response to their chargeback applications, they were told by their bank that these would be processed only after their scheduled 1time date of departure.

With most of them having bought tickets for the festive season, and hoping to be credited before buying fresh tickets on another airline – at a far higher cost, in most cases – that news came as a bitter blow.

Aslam Khan applied for chargeback from Standard Bank on November 3, the day the airline’s demise was announced.

“I provided them with the necessary documents they required and they informed me my credit card would be reimbursed within 21 days.

“But when I called to check on the status of my dispute, they informed me they received instruction from Absa that chargeback will occur only after my flight date, which is the end of December.

“My concern is that I need my card to be reimbursed to book another flight,” Khan said. “What do I do?”

The issue that has caused the problem – and massive confusion among the banks and consumers alike – is the current status of 1time’s liquidation.

John Anderson, who chairs the Payment Association of SA’s card payment clearing house, told Consumer Watch that MasterCard and Visa set the rules for the chargeback process, and Absa, as the acquiring bank, was implementing them with regard to 1time chargebacks.

The problem in the 1time case is that the liquidation granted in the Pretoria High Court on November 7 is provisional, and until it has been finalised and a liquidator appointed, there remains the possibility, though remote, that a buyer could be found, and those red 1time planes could get airborne again.

In that case, if the chargebacks had already been done, the affected cardholders would then have their cards debited again, Anderson said.

“Absa and the other banks are trying to avoid that, by not refunding affected cardholders until after the dates of their flights,” Anderson said.

FNB Credit Card’s chief executive, Johan Maree, confirmed that bank’s stance.

“Should FNB not follow the chargeback rules as stipulated by the acquiring bank [Absa], they may decline these chargebacks and refuse customers a refund, as due process was not followed,” he said.

“In instances such as liquidations, there is always the possibility that someone may buy out the merchant or offer a suitable alternative to the initial service offered, thus upholding the service.

“In light of the delayed execution of liquidation of 1time airlines, FNB is currently not refunding customers until the service in question has not been delivered, as the alternative would require that the customer is then re-debited long after the initial purchase was made, possibly pushing them over their limit and offering them a false sense of assurance that the matter has been settled in full.

“We are in daily contact with the acquiring bank and should the status of the 1time grounding become permanent, we will seek the go-ahead to proceed and refund customers, regardless of the flight date.”

And Standard Bank issued a statement saying that “a liquidation order has not yet been granted nor has a liquidator been appointed”, therefore, “due to the refund reason being ‘service not rendered’, at the moment only flights where dates have passed can be considered for reversal”.

Absa does appear to be swiftly refunding those of its clients who have applied for 1time chargebacks, but on the understanding that should the service be available on the day of the booked flight, the amount would be debited again.

Hazel Booth of Pretoria had her R887 1time ticket purchase refunded within two days of applying for it via e-mail, but the notification came with the following information: “The merchant bank has 60 days to respond. If the merchant bank presents the transaction and provides us with the necessary documents, your account will be debited with the amount concerned.”

So it would seem that 1time victims who used credit cards issued by Absa and Nedbank to pay for their tickets, other than via an electronic funds transfer (EFT), are in the most favourable position in this sorry saga.

Sadly, for those who paid cash for their tickets, or used their credit or debit cards to do an EFT, there is no hope of a chargeback at all.

Among these would be those who saved up for some time for their annual holiday; people who arguably could least afford to lose the money.

A provisional liquidator has been appointed and details are on the website www.1time.co.za

Sadly, consumers will be at the bottom of the pile of 1time’s creditors, and can expect to get only a few cents in the rand, at best.

So why does using a card to do an EFT purchase not give you chargeback protection?

When debit or credit cards are used to make payment by transferring funds directly from a consumer’s account into that of the company concerned, it’s an “e-commerce” or cash transaction, Anderson explained, and those were not governed by MasterCard or Visa rules.

In last week’s column I said that all credit card transactions were covered by chargeback, while debit or cheque card transactions were only covered if the cards were swiped or dipped – in other words if payment was done in person.

To clarify: when credit cards are used to do EFTs, there’s no chargeback protection.

Those who went on to 1time’s website and paid for their booked flights by entering their credit card details on that site, do qualify for chargeback.

Don’t wait until the departure date of your 1time ticket to apply for chargeback. Submit your application, with all the relevant documentation, as soon as possible.

And if yours is an especially dire case, plead with your bank to refund you in advance, with the understanding that it will be reversed should the airline be operating on the day of your booked ticket.

FNB told Consumer Watch that the bank was “reviewing each dispute on its individual merits”. “Where customers are struggling as a result of these 1time transactions, we are making efforts to assist wherever possible.”

Thrifty boy will fly after all
In last week’s column on the 1time chargeback issue, I wrote about the 12-year-old boy from Durban who had saved his pocket money for three years so that he could buy a ticket to Cape Town to visit his sister next month.

“There is just no money to buy another ticket,” his mother told Consumer Watch.

Huge thanks to the many readers who have since e-mailed me, offering to buy the youngster a return ticket on another airline.

I’m happy to report that a friend of the family has already done so, so the lad will be flying to Cape Town after all.

Among those who offered to pay for a new ticket was Alec Lenferna of Pietermaritzburg, who had booked four one-way tickets from Durban to Cape Town on 1time for his family’s December break – a cruise on the Symphonia.

Lenferna applied for chargeback with his bank, Absa, and has since been refunded that R3 876. With that, he managed to book alternative flights with SAA, though slightly more expensive ones.

GET BACK ON TRACK WITH YOUR BUCKS

The SA Law Centre, a non-profit organisation, has produced a user-friendly guide to fixing your credit record and improving creditworthiness as one of a series of self-help publications.

Penned by attorney Nicky Campbell, the DIY Credit Repair Toolkit explains which debts you should pay; what to do about blacklistings; how to correct information on your credit record; how to remove an administration order listing; and what to do if your credit application is declined.

“We intend to use the proceeds from the sale |of this book and other self-help guides to fund the legal costs for class actions, exceptional individual cases, and to establish an educational trust for exceptional law students from disadvantaged backgrounds,” said SA Law Centre ambassador Gunther Deutsch.

The centre has sold several of the books at R150 to companies for their staff, and provides back-up workshops on how to use the tool kit, including how to deal with garnishee orders.

You can have the book posted to you by registered mail at an extra cost of R25.

For more information, go to www.salaw centre.org.za or e-mail info@salawcentre.org.za

To have the book e-mailed to you in PDF format (R149.99) go to www.roylaw.co.za

E-mail Wendy: consumer@knowler.co.za

On Twitter: @wendyknowler