Dispute a Credit Card Charge

It can sometimes happen that a purchase doesn’t work out for whatever reason, there’s a problem with a merchant, someone makes a mistake, or there is an attempt at fraud. In any of these cases, the result can be a charge that you need to query or dispute on your credit card bill. This article will give you some guidance about this process.

First Things First

The first thing you have to do to be able to dispute a charge on your credit card is to know that there’s something wrong. This means that you have to either have a very good memory or a documented record (for example, your receipts carefully collected) of your purchases, and that you have to have examined your monthly statement, whether in paper form or online.

Saving your receipts is a good idea anyway because any guarantee or warranty on what you purchase may depend on it, but it’s very important to save them at least through the billing cycle in which they appear on your statement, so you can compare if necessary.

(If/when you do decide it’s time for them to go, remember to shred them rather than just throw them away.) If you have at least a few purchases, going through your statement each month and comparing them to your receipts is a good idea.

What Should You Look For?

Knowing the circumstances that can happen will help you know what to look for. Here are some of the key scenarios:

• Not your credit. It is rare, but possible, that someone else’s charge or payment could be credited to your account. All it may take is a misreading or mis-recording of one digit. Once, with a balance of a couple of hundred dollars, I saw a credit for over $30,000 on my statement. Obviously, not my payment, and quickly straightened out - much to the delight of the payer, I’m sure.
• Not your charge. If you didn’t authorize the charge, then it shouldn’t appear on your statement. (Unless you know exactly how and why this happened, this is a strong hint that you should check your credit report for possible fraud or identity theft.)
• Wrong date or amount. The statement should match the receipt.
• Your ordered it, but you either didn’t receive it, or returned it. If you refused delivery on an item (this could happen if you tried to cancel an order, but it had already gone out) or you sent it back, you should not be charged for it. Keep in mind that - depending on timing - the charge may have been reversed but not in time to get into the statement cycle in the same month as the original charge.

Now What?

Okay, so say you find one of the above. What do you do? Well, several things.

First, go to the Federal Trade Commission website (www.ftc.gov) and look for the Fair Credit Billing Act. This act explains the consumer protection measures that are in place and tells you exactly how to take advantage of the protection the law offers.

To summarize, you

1. Write to the creditor at their “billing inquiries” address and provide full contact information for yourself, a clear statement of the error, and a photocopy on the sales slips and/or any other documents you need to refer to to make your point. The FTC provides a model letter.
2. Keeping a copy for your records, make sure your letter reaches the creditor within 60 days after the first bill that shows the error was mailed to you.
3. Use a trackable method, such as certified mail with a return receipt, so that you can prove that the creditor received it.

Either the problem must be resolved, or the creditor has 30 days after receipt of your complaint to respond in writing. Two billing cycles are allowed for resolution of the dispute. During this time, you may withhold payment, but you should inform the credit card company of the situation, not just withhold part of the full amount without explanation.

If the creditor responds and confirms that the bill is incorrect, then the creditor should supply a correction, credit your account, and remove any extra charges, such as finance charges, that were applied. If the creditor maintains that the bill is correct, they must explain in writing, and the bill, as well as all applicable fees become due. At this point, you have only 10 days to respond, and if an agreement is not reached, the creditor may begin collection and may report the delinquency to a credit bureau, after informing you that it intends to do so. At this point, you may be able to seek a legal remedy, if necessary. You may also wish to seek assistance from your local Better Business Bureau and your state attorney general’s office consumer protection division.

If the creditor does not follow the procedure, it forfeits its ability to collect the disputed amount, even if it can prove that the bill is correct.

Damaged or Faulty Merchandise

Quality disputes are a different topic, as far as the law goes. But you can follow the same procedure stated above towards the card issuer if:

• your purchase was made using your credit card
• the purchase was made either in the state where you live or within 100 miles of your billing addresss
• you try, in good faith, to seek resolution with the merchant first.