Know Your Credit Card Dispute Resolution Policy
When fraudulent payments appear on your credit card statement or are flagged by your card issuer, you know to void your card and report them as fraudulent.
However, sometimes the transaction is not a scam – it may have been done in error, or, for example, you may never have received the product you ordered.
If this is the case, instead of canceling your card, check out your issuer’s dispute resolution policy, suggests Amanda Ligi, an investigator and consumer advocate, on the Financial Diet :
Sometimes you place an online order, but it never appears, but the company does not return the money. Sometimes the subscription provider won’t listen to you when you ask for a cancellation and still continue to charge you.
In these cases, the challenge button is your best friend.
How to challenge charges
First, assuming you already check your statements on a regular basis , make sure you have the receipts / proof of purchase required to prove that you were indeed billed in error. Then contact the retailer or company whose product or service does not suit you. This is usually an easier and faster way to solve the problem.
But if they don’t respond, or you still see the discharge charge, you have a way out.
According to CreditCards.com , consumers have some protection against billing errors under the Fair Credit Billing Act 1975 (FCBA). You can dispute a payment if:
- You had an overpayment : check the price against your receipt.
- You didn’t actually make a purchase : for example, if you see an unknown vendor on your invoice, you’ll want to dispute it as soon as possible.
- You have been charged multiple times for the same thing : call the provider to fix the problem.
- You didn’t get what you paid for : This is the hardest thing to prove, but if the product or service doesn’t match what you said, you can challenge the charge.
Please note that you cannot dispute a purchase made by an authorized user (for example, your child) or because of the buyer’s remorse.
After you try to negotiate with the seller, you can contact the card issuer. “FCBA requires you to send written notice to your bank’s billing department within 60 days of the date the charge appears on your credit card statement,” writes US News . The FTC has a sample letter that you can send.
You can usually dispute payments online. “When you log into your account online, most card providers allow you to click on a specific transaction and easily file a dispute with one click and a simple explanation of why you believe you have been mistakenly debited,” writes Leiti. You will need receipts / other proof of inaccuracy.
Here’s how to challenge the fees of some of the major issuers:
Or call the number on the back of your card.
Your creditor must send you a letter within 30 days of receiving your complaint. “You can suspend payment of the disputed amount (and related costs) during the investigation,” the FTC notes. “You must pay any portion of the invoice that is not in question, including an undisputed finance cost.”
If the bank agrees that the payment was made in error, it will charge back and deduct any associated finance fees or commissions. If they don’t, they will send you a letter stating the reason within two billing cycles. If you believe your creditor is not complying with the FCBA, you can file a complaint with the FTC.