How to Resolve a Credit Card Dispute

Credit card owners may need to initiate a dispute for a variety of reasons, most frequently over unauthorized charges or over a discrepancy in the billed cost of an item or items.^{[1]XTrustworthy SourceState of IndianaOfficial site for state-approved sources related to life in Indiana, including laws, services, and cultureGo to source} The dispute process typically involves the credit card agency investigating the charges in conversation with the merchant. Most credit card companies provide information on how to resolve a credit card dispute on the customer's credit card statements, or on the credit card company's website. Consumers have certain rights regarding credit card disputes, as they are protected under the Fair Credit Billing Act (FCBA)^{[2]XResearch source}; however, there is typically a window of time in which consumers can dispute a billing error (usually 60 days), and consumers may still be liable for the first $50 of unauthorized charges.^{[3]XTrustworthy SourceState of IndianaOfficial site for state-approved sources related to life in Indiana, including laws, services, and cultureGo to source} Customers have up to one year to assert "claims and defenses" rights on any disputed charge that has not yet been paid off.^{[4]XResearch source} Knowing your rights and the options at your disposal can help save you time and frustration in the event that you need to dispute a charge.

Method 1

Method 1 of 3:

Catching a Discrepancy

1
Review your credit card bills. You should carefully look over your statement every month to catch any instances of fraud or unauthorized charges. You may also be able to check your statement online, which can help you stay on top of your account on a daily or weekly basis. If you have a debit card, you should also check your online checking account balance on a regular basis.
- Save your receipts. You'll need your receipt in case you need to return an item, and having a receipt may help you cross-check how an item was rung up at the register.
2
Try to resolve the issue with the merchant. Whether you were over-charged for an item, rung up more than once for the same item, or believe you've been the victim of credit card fraud, contacting the merchant may be a useful first step. Some merchants are willing to work with customers to resolve credit card disputes in-store.^{[5]XResearch source} In cases where a customer disputes the quality or condition of goods/services, the customer may even be required to make an effort to resolve the issue with the merchant before initiating a charge dispute with the credit card company, which emphasizes the importance of alerting the merchant as soon as possible.^{[6]XTrustworthy SourceState of IndianaOfficial site for state-approved sources related to life in Indiana, including laws, services, and cultureGo to source}
- Be polite and courteous. Remember that it may not be the merchant's fault, especially in the case of fraud. Be polite and respectful, and you're likely to get a better reaction than customers who are angry and demanding.^{[7]XResearch source}
- Even if you try to resolve the issue with the merchant, you should also let your credit card issuer know about the discrepancy. This is because in the case of fraud, the abuse may have originated within the store where the unauthorized charge took place.^{[8]XResearch source}
3
Learn your rights as a consumer. If a charge discrepancy arises, you have certain rights under the Fair Credit Billing Act (FCBA). However, some merchants may try to limit those rights. Some online retailers, for example, have sales policies that restrict a customer's right to dispute charges, and threaten to add list disputing customers on a chargeback abuser database. This violates both the FCBA and the user policies that most major credit card companies have in place.^{[9]XResearch source}
- Consumers have the right to dispute any billing errors, erroneous charges, or fraudulent charges.
- Under the FCBA, credit card companies may not harm a consumer's credit or threaten to do so for refusing to pay disputed charges while the charges in question are being investigated.
- Credit card companies can not demand payment of disputed charges while those charges are being investigated. Credit card companies are also forbidden from filing a collection lawsuit against the consumer while a charge is being disputed.
- Consumers have a right to withhold payment for incomplete or unsatisfactory services until the claim is investigated and a decision is reached by the credit card company. A consumer wishing to stop payment must inform the credit card company of his desire to do so, and must be willing to make the payment if the investigation determines that the consumer was still responsible for making that payment. It is expected that the consumer will attempt to resolve the dispute with the party or parties who performed the unsatisfactory/incomplete services.
- The FCBA requires all disputed transactions to be investigated and resolved as quickly as possible, and is designed to protect consumers against fraud and abuse.
4
Learn the restrictions on chargeback claims and defenses. Disputing a charge under the defense of "claims and defenses" allows you to notify the bank that issued your credit card of the unauthorized charge up to one year from the date of the statement that outlined that charge. If you meet the qualifications for a claims and defenses dispute, you may be eligible for a chargeback. But a chargeback, which is the reversal of a charge determined to be unauthorized, has certain limits and restrictions of its own. Knowing those restrictions is just as important as knowing your rights.^{[10]XResearch source}
- The amount in dispute must be in excess of $50.^{[11]XResearch source}
- If you have already paid your credit card debt down to zero, you can no longer dispute an unauthorized charge under the defense of "claims and defenses". If you have only paid back a portion of your bill, you may still dispute the remaining balance that you haven't yet paid.^{[12]XResearch source}
- The disputed transaction cannot be with a merchant more than 100 miles from your residence or outside your state of residence. If, for example, you purchase an item with your credit card while on vacation out of state and realize upon returning home that the box was empty or contained the wrong item, you still have 60 days to notify your bank and exercise your "billing errors" rights. But because the item was purchased outside the covered region for claims and defenses, if you miss the 60 day window you are not eligible to file a claims and defenses dispute.^{[13]XResearch source}
- You must make a good faith attempt at securing a refund or store credit from the merchant before you can dispute the charge with the bank that issued the credit card. Sending a written correspondence or a notice of cancellation to the merchant qualifies as an attempt at securing a refund or store credit.^{[14]XResearch source}
- Be prepared for the possibility that a customer service representative may not be familiar with "claims and defenses" rights, and may attempt to refuse your dispute if more than 60 days have passed. In this case you should make it clear, either in your letter or through your phone correspondence, that you are invoking your "claims and defenses" rights under state and federal law, and that those rights are not limited to the 60 day restriction that "billing error" rights are.^{[15]XResearch source}
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Method 2

Method 2 of 3:

Resolving Billing Errors

1
Write a billing error letter. Any time you suspect a billing error has taken place and the merchant fails to resolve the issue for you, you should write a letter to the card issuer within 60 days of discovering the error. Send all correspondence by certified mail so that you have a receipt confirming the date each letter was sent/received. Let the card issuer know the date of the purchase(s) in question, and provide as many details as possible to help build your case.^{[16]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source} The credit card company must acknowledge your complaint with a written response within 30 days, and must resolve the issue within two billing cycles, not to exceed 90 days.^{[17]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source} You can find a sample letter that you can use as a template for your billing error letter on the Federal Trade Commission's website.
- Include your name, address, and account number.^{[18]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
- List the date of the charge in question, the amount that charge was for, and why you believe that charge was made in error.^{[19]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
- Include a photocopy of the receipt, if you still have it.^{[20]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
- In lieu of writing a letter, you can also initiate a dispute online by visiting your card issuer's website, or over the phone by calling your card issuer's customer service phone number.^{[21]XResearch source}
2
Be polite and professional. If there's a billing error on your account, it's most likely not the credit card company's fault. Even if the error was on the credit card company's end, the customer service representative you call or write to isn't responsible, and he's likely your best bet for getting the issue resolved. You may have heard the phrase, "You'll catch more flies with honey than vinegar," and that's particularly true with customer service correspondences.^{[22]XResearch source}
- Be organized. Have all the information you'll need in front of you before you call or write to the credit card company. That way you won't get flustered searching for anything when you need it.^{[23]XResearch source}
- Be professional and polite. Address the representative by name if he provides his name. If the representative you're communicating with can't help you, ask (politely and calmly) if you can speak to a supervisor.^{[24]XResearch source}
- Keep a detailed written record of every correspondence you have with the credit card company. That way you can refer back to previous letters or conversations if need be.^{[25]XResearch source}
- Make sure you have time to talk if you call a customer service representative. It's not going to be resolved immediately, so set aside some time to call when you don't have any prior engagements.^{[26]XResearch source}
3
Wait for the card company's investigation. Though it may be stressful to wait for the credit card company to conduct its investigation into your dispute, it's important to know what to expect during this waiting period.
- You are not required to make any payments toward the disputed charge during the course of the investigation. However, you are still responsible for making payments on all other charges that are not in dispute.^{[27]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
- The card issuer cannot take any legal action against you to collect on the disputed charge while the charge is under review. The card issuer is also prohibited from threatening the consumer's credit rating or reporting the consumer as a delinquent cardholder.^{[28]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
4
Receive a decision. The decision must be sent to the consumer in writing, no later than 90 days after the initial dispute letter was received by the card issuer. That decision must either explain what actions will be taken to correct the charges, if said charges are determined to be erroneous, or must explain how much money you owe and why, if the charges are determined to be accurate.^{[29]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
- Even if the charges are determined to be correct, you may not required to pay the disputed amount if the card issuer took longer than 30 days to respond to your initial dispute letter or took more than two billing cycles to conduct the investigation. You are also exempt from paying the amount if the card issuer threatened to report or actually reported you as a delinquent card holder while the charge is being disputed.^{[30]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
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Method 3

Method 3 of 3:

Resolving Fraudulent Charges

If you believe you have been a victim of credit card fraud, it's imperative that you notify your card issuer immediately. Most major credit card companies have 24 hour service lines for reporting stolen cards and fraudulent purchases. These numbers are usually listed on the back of your credit card, and can also be found on billing invoices sent by your card company. You may also need to inform your bank of the incident if your credit card is linked to your bank account.^{[31]XTrustworthy SourceState of IndianaOfficial site for state-approved sources related to life in Indiana, including laws, services, and cultureGo to source}
Your card issuer will most likely cancel the card at the time you report the fraudulent charge(s). If for any reason the card issuer does not cancel your card at that time, you should let the customer service department at your card company know that you need to cancel your card, as its security has been compromised. You can also request a new card when you call to cancel your old card.
3
Consider filing a legal report. Victims of credit card fraud may be able to file a police report, or report the incident to the Internet Crime Complaint Center.^{[32]XResearch source}
- Include your name, address, and phone number.^{[33]XTrustworthy SourceInternet Crime Complaint CenterOnline reporting system for individuals to inform the FBI about Internet-related criminal activityGo to source}
- Include the name and location of the business, or the website and email address of the business that you believe was involved in the fraudulent charges.^{[34]XTrustworthy SourceInternet Crime Complaint CenterOnline reporting system for individuals to inform the FBI about Internet-related criminal activityGo to source}
- Give as many relevant details as you can on how and when the fraud may have taken place.^{[35]XTrustworthy SourceInternet Crime Complaint CenterOnline reporting system for individuals to inform the FBI about Internet-related criminal activityGo to source}
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Tips

Keep copies of all correspondence submitted to and received from the credit card company.
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Send correspondences via certified mail so that you have a record of when each letter was sent/received.
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Warnings

Do not withhold payment for undisputed credit card charges. Late fees and higher interest rates may be imposed by the credit card company if payments are not received. You are not required to pay disputed charges while those charges are being investigated, but you are still responsible for the charges you legitimately made in that billing cycle.
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