Credit cards began back in the 1950s but it took a while to convince consumers at large to buy into them. As with so many innovations in technology, there were concerns about unauthorized transactions and fraud.
Without consumer protection, who was going to cover these losses? Under the 1974 Fair Credit Billing Act, credit card users were given the power to ask their banks to get money back if there was a problem with a transaction.
When a charge is disputed, the bank will claim the money back from the merchant’s account, the bank will investigate the situation, and decide which side is in the right and gets the money.