Credit Card Dispute: The Rules, The Process & Your Rights
There’s no guaranteed way of how to win credit card disputes, but understanding the process may help your odds.
What is perhaps the most important credit card benefit is your protection against unauthorized and fraudulent purchases. Over the years, I can’t even count the number of times a dispute has saved me (many!). Below we will go over some very important things you need to know about disputing a credit card charge.
Know the difference between “billing errors” and “disputes of quality.” It’s very important to understand that these are two totally different things and there are different credit card dispute rights for each.
First, let’s talk about billing errors…
Dispute Rules For “Billing Errors”
The Fair Credit Billing Act (FCBA) applies to the following “billing errors” on credit cards:
- Unauthorized charges. (Sidenote: Federal law 15 U.S.C. § 1643 limits a cardholder’s liability to a maximum of $50 for unauthorized charges. That being said, most reputable credit card companies will waive that $50 and give you zero fraud liability.)
- Charges for goods and services you didn’t accept or weren’t delivered as agreed upon.
- Charges that have the incorrect amount or date.
- Charges incurred when payments/credits are not properly posted to your account – i.e. If you return an item and the credit never shows up on your account.
- Charges in which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification.
- Charges incurred due to the credit card company not mailing the statement to your current address. The change of address must have been provided in written form and the creditor must have received it at least 20 days before the billing cycle ended.
- Math errors
Important: The FCBA credit card dispute rules and rights do not apply if you are disputing the quality of goods and services. So if you purchased something defective, it would not be considered a “billing error” (but we’ll talk about disputing the quality of goods and services a little bit later).
Dispute Process For “Billing Errors”
If you’re disputing credit card charges as a billing error, here’s an overview of the process….
Step One: Notify The Credit Card Company
You will you need to notify your creditor in writing in order to qualify for all of the above billing errors, except for “unauthorized charges” which can be reported over the phone (but it’s still highly recommended to also report them in writing, in case you have misclassified their category).
Personally speaking, I have handled my disputes over the phone with most major credit card companies and have never encountered any problems by going that route. However, since the FTC website says you must mail a letter in order to be covered, then you should do that… especially if it’s for a large amount. Here is a credit card dispute letter sample.
When you mail the letter, make sure you send it to the “billing inquiries” department. This is probably a different address than where you mail your payments so call customer service to find out where you should send it.
There is a credit card dispute time limit! The letter has to be received by your creditor within 60 days after the first bill was generated which showed the error (but for “unauthorized charges” there reportedly is no time limit). If you send a letter, make copies (and copies of any receipts you included) and send it via certified mail with return receipt so you have proof it was sent.
Step Two: The Investigation Process Begins
Within 30 days of receiving your dispute, the credit card company must respond to you in writing to confirm they received it. If you choose to only make the complaint over the phone, you still should expect to receive the written confirmation in the mail. In my experience it has usually arrived quickly; within 7 to 10 days.
Once the complaint has been received the credit card company must resolve it within two billing cycles, which is typically 60 days. If for some unusual reason your billing cycle is longer, the maximum amount of time the process can take is 90 days.
During the credit card dispute process investigation, you will not be required to make payments or pay finance charges on the purchase(s) in question.
Step Three: The Investigation Concludes
The dispute will either be ruled in your favor or the merchants favor. Here’s what typically happens in each situation:
Ruled in your favor?
The credit card company will mail you a letter which states your billing error complaint is valid and the appropriate corrections to your account have been made. This includes permanently removing the actual charges, accrued interest charges, applicable late fees, etc. resulting from the disputed transaction.
Depending on the circumstances, the creditor may say you owe a portion of the disputed amount. For example, if you bought something for $100 and were charged twice ($200 total) and had disputed that entire amount, then the credit card company will probably come back and say you owe $100 of the disputed transaction.
If you are found to be partially responsible, you will owe any applicable finance charges and fees that would have normally accrued (from date of purchase to the present) on whatever amount you’re responsible for.
Ruled in seller’s favor?
If the dispute process finds that the charge is valid (not a “billing error”) then you will be responsible for the full amount, plus any interest and fees that would have otherwise accrued. The letter will provide details explaining what you owe.
If you disagree with the decision, you do have the right to try and refute it. However to do so, the credit card dispute law states that you must respond in writing within 10 days after receiving the ruling.
If you are going to refuse to pay the disputed amount, you can indicate that in your written response. However you should be aware that the credit card company will have the right to start the collections process after you tell them you won’t be paying. If it is reported to the credit bureau, legally they will be required to notate the fact that it’s money the customer doesn’t believe they owe.
Dispute Process For “Quality of Goods & Services”
As mentioned, if your complaint is about the quality of goods and services received, the above credit card dispute rules for “billing errors” will not apply. That being said, you will be entitled to other rights of protection if:
- The purchase is for $50 or higher and it was made within your home state or 100 miles of your billing address. (Note: In some states internet purchases made from your home would qualify).
- You have already made a “good faith effort” to try and resolve the problems with the seller
If both of the above circumstances apply, you are allowed to take the same legal action against your credit card company that you can take under state law against the seller (so in a nutshell, if the seller violated state laws which entitle you to remedies, then you can go after your card issuer for those same remedies).
If your credit card issuer happens to also be the seller (or if a special business relationship exists between the issuer and the seller) then the distance requirements and $50 threshold do not need to be met.
5 Things You Need To Keep In Mind
1. Document everything
It’s always a good idea to document everything very thoroughly. Keep multiple copies of all correspondences and receipts. Make a log of your phone calls. If communicating by mail, make sure it’s sent certified with return receipt so you have proof.
2. Remember pre-existing agreements
Judging from posts on the credit card message board, the #1 mistake I see made is that people forget pre-existing agreements they have with the seller. You may have already signed away your rights to a dispute and not even know it.
For example, an increasingly common practice among contractors is to have their customers sign away their rights to credit card disputes when you hire them (this is very sneaky and should be a major red flag to not hire them). Later on when a customer files a dispute about the quality of service, the contractor weasels out of it by sending that signed agreement to the credit card company.
Even if you did unknowingly sign away your rights, it doesn’t automatically mean you will lose (depending on the circumstances and the state you live). But it very well could kill your dispute, so you should always avoid waiving this right.
3. “Unauthorized charges” probably offer the best protection
I have heard of disputes which were essentially the same (with the same seller) but one cardholder filed as an “unauthorized charge” and another filed as a different billing error. Despite that the circumstances were for all intents and purposes the same, only the man who filed as an unauthorized charge won.
Now this does NOT mean you should mis-classify your dispute. But if it truly is an unauthorized charge, make sure it is filed as such. Sometimes, a rep may file it under some other billing error and that will change the way it is handled, since the credit card dispute rights will be different.
4. Penalties for the card issuer not following procedures
The credit card dispute laws must be followed by your card issuer.
- Was your complaint acknowledged past the 30 day time limit?
- Did the investigation take more than two billing cycles?
- Did your card issuer threaten to report you to the credit bureaus for not paying while the dispute was still in process (that can only be done after).
Those are just a few examples. The bottom line is if the credit card issuer failed to follow the process (and you can prove that) then they may not collect the amount in dispute or any related finance charges, up to $50, even if the charges turn out to be correct.
It is also possible to sue the card issuer when they violate the Fair Credit Billing Act. If they’re found guilty, you may be awarded damages, plus 2x the finance charges accrued – as long as it’s between $100 and $1,000.
5. This article is not legal advice
I am a consumer just like you. I am not a lawyer or law professional. Therefore you should not misconstrue anything mentioned here as legal advice. Also, keep in mind that this was written at the start of 2011 and credit card dispute rules may have changed since then. Although every reasonable effort has been made to ensure accuracy in this article, verify all information mentioned here with the FTC and consult an attorney for advice.
Bank of America is horrible. Someone stole my card, but because the physical card was still in my possession they are only selectively giving me back the fraudulent charges. Basically anything that wasn’t swiped with my “card” a dummy card.
In the meantime while my temporary debut card expired they sent out a new one I never received (to who knows what address).
Obviously I am beyond upset and am just debating moving my money now as the customer service I have experienced is terrible and the process is a waste of my time. I am currently on a second escalated appeal where they say they will ask the store for permission to look at their footage. In addition I have be forced to pay additional fees on top of the charges I did not make for interest on the charges.
The whole thing is ridiculous.
I am probably out of luck. But thought I would throw this out there. I reserved a condo in Keystone Colorado within the 60 days they require to cancel. I passed on purchasing trip insurance. Who would need that right?? Well of course something comes up and I have to have emergency surgery. Doctor says no way are you going sking. Merchant says too bad I did not give 60 days notice of cancellation. I disputed with Chase they are siding with the merchant saying there is nothing they can do. So I am out $1100.00 for an empty condo in Colorado. Any ideas?
How long does a company have to draft money from an account? I made a puchase via telephone, and the company hasnt taken the money, and hasnt returned my calls, so im left to wonder how long i should wait.
I just received an actual credit card in the mail I never applied for. It was a car dealership that had US Capital send me the credit card and all I have to do is activate it. I was under the impression that it was not legal to send out an actual credit card you did not apply for where it could have gotten into anyone’s hands and I would never had known, since I never applied for it. It is legal for another business have a financial institute a credit card?
how long does moderation take?
I love that Bank of America would not let me dispute a charge on my credit card. I wanted to dispute a charge from my book club – I had not ordered the books and had declined the featured selection and it was still sent to me and billed to me (over $50!!).
Bank of America told me that, because I was a member of the book club, that I authorize them to send me shipments from time to time and automatically charge it to my credit card. I in no way, shape or form authorized that but the lady insisted it was in the user agreement (which I read and it is NOT in the user agreement / membership agreement). They said I have no legal right to dispute the charge until I can prove I did not authorize the transaction and provide a membership agreement showing that the club does not “auto bill.” Proof of declining the selections was not enough.
Spoke with multiple different reps and they all told me the SAME thing! I have no right to dispute the charge! After calling the book club over and over and over, I finally reached someone and they reversed the charge which was great but it took me weeks to get ahold of them and by then, I already had to pay the stupid bill.
Needless to say, I am no longer and will never again be a member of a book club or a Bank of America customer. Want to know the real kicker here.. the icing on the cake? I had charges to a local doctor on my bill and the cocky guy on the phone said “oh, you’re pregnant? When are you due because this payment protector plan would be great for you!” Funny, I’m not pregnant but my doctor shows up as part of a fertility center so automatically I am being profiled because of charges to my credit card?? Um, I think not. Buh-bye Bank of America!
I recently made a purchase with the bulk of it charged to Visa and a smaller amount charged to the store issued credit card to take advantage of the interest free promotion. The quality of the merchandise was discovered to be materially less in value than promised. The item has been put into dispute with both credit cards. Visa has issued a provisional credit, but the store issued card said, “its your problem, work it out with the merchant”. Guess what? The merchant is being very difficult and will not authorize a return. Do I have any rights under the store card to ask that I be released from the min payment (only charge on card) while the item is in dispute?
I made a charge and was not informed of the transaction fee of $455. Any ideas of ways to ensure I get reimbursed?
thank you
hi!actually you can get your moneyback! there are two options on how to resolve that.
First option, you can contact the merchant and inform them about the situation if their not willing to help you do the second option:contact your bank regarding this situation don’t forget the date you deal with the merchant. They can check the transaction and they do have the ability to dispute a charge. In disputing the transaction your bank will provide a temporary credit while the transaction is under investigation. Don’t worry they will follow the rules and regulations of visa and mastercard. You must provide a copy of a precept (or other supporting documentation) that shows the amount that you agreed to be billed by the merchant. Good luck!
Last month I received a call from a Rep. about a protection plan. After going through the “explanation” of services, I agreed to have my CC charged a $2.95 fee until I received my info in the mail… which I never got. I was told that I had 14 days to cancel or my card would be charged $54.95.
I waited a while, and realized I never received the “mailed” info. I decided to call the number given to me, and basically every time I called, I got an automated menu. I wanted To speak to someone to check on my package and while on hold the automated system Would eventually disconnect. I did this several times during the day, but since I work full-time, am unable to keep calling.
One night, while checking my accounts online, I see the $54.95 charged to my card 2 days after the “sale”, in which, that wouldn’t have given enough time to review any info or receive it. I finally called, left message this time a few days ago, and finally received a call back today. This company refuses to refund my card because I didn’t cancel within the 14 days, but did offer to cancel my acct from future charges. Then I explained that I haven’t received info, that I called several times only to be disconnected and if I had review time, why charge my card 2 days from trial period call, and not 14 days. We went over the authorization recording call, and I wad amazed to hear something so far from the actual call.
I told the Rep that I have the persons name if who I spoke with that day, and I definitely didn’t hear all that other “automated/computerized” that they have on file. Anyway, I faxed over a written dispute to my credit card with explanation and also that I never received promised paperwork, and basically refused the offer suggested by this company to resend it because I didn’t want them taking advantage of the situation. What are the chances of my credit card ruling in my favor. I really feel that this company is a scam and that They make their money charging fees ASAP without grace period, and not answering calls, and adding extra speech and info to the original verification call.
@GG just put a dispute as unauthorized charges. as a customer you will win ~95% times.
I purchased something online from a clothing store using their credit card but it still hasn’t showed up yet on the monthly statement. How long do they have before it shows up?
For the credit company usually that will take within 3 to 4 business days. Coz your bank still needs to wait for the sales draft coming frm the merchant, once your bank received that, the transaction will appear on your statement.
I ordered goods from a company and they took my VISA payment the same day. When the goods had not shipped after a couple of days I followed up and they said they would treat it as a priority. After 7 days and they had still not shipped I sent them another message threatening to cancel the order. They sent me an email confirming my order had been shipped the following day. I was suspicious as there was no tracking number. After another 4 days I got another email confirming the goods had been shipped and this time they sent me a tracking number, which confirms it was not shipped at all until that day. I understood that merchants had to ship within 24 hours of taking your payment if the goods were in stock? Thank you
Can a merchant withhold a % of the total sale when an item is returned to cover their merchant fee for aceepting credit cards?
Dear CreditCardGuru,
What about the 60 days limit within which you have to file your dispute in the following case? I purchased an air ticket in March for travel in July (as the advance purchase obviously gives people a chance to get the flight cheaper). When I was trying to travel in July, however, I found out the ticket was not useable as promised. So I filed a dispute. This dispute was filed a week after I found out the ticket was not useable, but it was obviously later than 60 days after the charge appeared on my bill. My point is that there was no way for me to know in March that anything is wrong with the ticket, that is until July, when I was trying to actually use it. Does the 60 days limit (from the time the charge appears on your statement) apply also in this case? I mean, there must be some exception for this kind of circumstances, is not there?
Thank you very much for letting me know,
Antonie
Talked with Bank of Omaha over the phone .. told them I did not want their account unless my entire balance from another bank could be transferred. They said they would call back. They did not. Then I received a bill in the mail a couple of weeks later – they transferred part of my balance (msot of it not all) and charged me a balance transfer fee which was never mentioned. I have writtem them and agreed to keep the account IF they would take off the transfer fee which I was not informed of and would never have agreed to .. they will not take it off. They have no signed application from me, and if they taped our call they will see that a fee was never discussed. Do I have any rights or can they just set me up an account and charge me fees like this – am I stuck with them and this fee? What can be my next step? I do not want to damage my credit.
Thank you very much.
Hi I applied for a credit card, but it was not delivered to me but to some one else, am i responsible for its fraud?
Hi mr. Kumar! don’t worry you are not liable for the fraudulent transactions. Your bank will investigate on that. I think there’s a certain rule that your credit card company is providing regarding fraudulent transactions.
Whats the process involved with disputing a charge that has gone to collections?
Hi, my question is about the quality of goods, what if the item received is not as what they represented on their website and there is a lot of difference as what you have seen on the website does it qualify for a dispute? Thanks
A THIRD PARTY USED MY AMEX CARD FOR $1300 ON A SAME DAY FLIGHT. I CHECK MY ONLINE ACCOUNT, CAUGHT IT BEFORE THE BILLING STATEMENT IS SENT, CALL TO REPORT. THEY START THE PAPERWORK. JUST RECEIVED RULING AGAINST ME. AIRLINE SENT VALIDATION OF TRANSACTION SHOWING THERE WAS A CHARGE, SOMEONE USED IT, PASSENGER WAS SENT VERIFICATION. NO REFUND. CHARGE STANDS.
FROM WHAT I READ ABOVE, I NEED TO SEND A LETTER TO DISPUTE THE DECISION WITHIN 10 DAYS – IS THAT MY RECEIPT OR THEIR LETTER DATE? AND, I’M PLANNING TO SEND IT REGISTERED.
I CAN’T BELIEVE THIS IS HAPPENING TO ME!!! ANY OTHER ADVICE? THANK YOU!
How long are credit card companies required to keep your previous account activity on file?
I got a card form Merrick bank never been late or over the limit, my credit was discontinued because I applied for other card/ I need to know what can I do . I have talk with the credit dept. of this account and they seem to be little baffled themselves.
I had my bank of America card stolen. Which they contacted to tell me. At that time they canceled old card & issued new one. She asked me if any authorized users I stated no Authorized users are on my account. Then she stated she would FedEx the card because I had auto payments set up. Well come to find out when they ship my card to me they shipped my Ex-boyfriend a card in a separate envelope. Happen to be same day I sat all of his stuff on porch to pick up. Needless to say when I called to activate my card they informed me that an authorized user had maxed out the card already. Which they approved the charges for 1500.00 to be removed. After I called the police like they wanted. But unfortunately the police in my city are terrible and didn’t do a thing. Then received a bill 8 months later stated I owed the full balance 1500.00 in full. I had just bought a house etc. Terrible company tried to fight it until stressed me out so much I just paid it. Now I want to get sue them for the money trouble & stress. How they approved it then declined it is beyond me.
American Express charges me twice on the hotel room, It’s a terrible experience, I nerve use American Express Travel online service again.
Re: DB – Unfortunately not. It seems these days the criminals have more rights than you and I do!
CreditCardguru,
Is it possible to obtain the information or identity of the person or people that committed the fraudulent activity on my credit card? I’ve contacted the merchant, my CC company, and filed a grievance at my local police dept. Just curious if I will find out the criminals name and/or address? Thanks
Hi Andy,
“the first one goes to when u didnt use the card to have goods or service it at all. the billing came to be a mistaken which u have no doubt why it is on ur bill.”
Yes that’s correct. However please don’t forget that a FCBA qualified billing error can be any of the other reasons listed under that section above, too.
“the second is that you have question on the quality of good and service on the bill, you actually did request the good/service. it just not as what you wanted!!..”
That’s right. You are not disputing whether it’s your purchase, but rather it not being the quality advertised/promised.
“is Dispute Process For “Quality of Goods & Services” also a law?”
Yes it is law, but your rights under it differ (they are discussed at the beginning of that section).
I hope this helps. Did you have any other questions?
dear creditcardgrui,
is Dispute Process For “Quality of Goods & Services” also a law?
dear creditcardgrui,
got it.. so is just a did or didnt questions.
the first one goes to when u didnt use the card to have goods or service it at all. the billing came to be a mistaken which u have no doubt why it is on ur bill.
the second is that you have question on the quality of good and service on the bill, you actually did request the good/service. it just not as what you wanted!!..
am i correct
Excellent question Andy! Here’s another way to look at it:
“charges for goods and services you didn’t accept or weren’t delivered as agreed upon.” = good/services you didn’t buy or were not delivered. For example, a bag of gulf clubs ends up on your doorstep that you never bought (fraud). Or let’s say you ordered an item and it never arrived and the seller has no proof they sent it.
“quality of goods and services received” = good/services you did actually receive, but the quality was not as advertised. For example, you buy a sweater but there is a hole in the armpit despite it being brand new… that would be a qualify issue.
Does that help you?
got a quick question to CreditCardGuru:
Thanks for sharing such a important infomation to us for reading through.
You mentioned that under FCBA, we are protected that if “Charges for goods and services you didn’t accept or weren’t delivered as agreed upon.”.
But how is that different then what you mentioned, Dispute Process For “Quality of Goods & Services”, which also mean we are protected “quality of goods and services received”
Can you give some real life example to ti.
Thanks.
I can’t stress this enough… file as soon as you think you have an issue. This has come up a number of times for me while ordering from international web based merchants, which typically has longer shipping times. I had a merchant promise my order in 4 weeks time however, I had to start the dispute process after the merchant went mia during that 4th week. Needless to say at week 5, I received an email from the merchant that my shipment failed to clear customs and that they would be offering me a refund. I accepted the refund and informed my cc company of the update. They said they would keep the dispute open until the refund was issued. It was issued 3 weeks later.
i have a fraudulent charge on my credit card. Card company said they would investigate, letter today said i am responsible as there is a signed receipt. They copied me the receipt from a restaurant in Toronto, Ca. I live in Az. and it is not me.
What do i do now, they are charging me back interest as well.
Just read your comments about what is required in a credit card dispute. Thank you for this information as I had my chevron credit card electronically duplicated resulting in substantial charges to my account that GE Money now wants me to pay for during the claim process….. Asked them how I add the minimum charges each month to my claim and can I now charge them for interested while I am waiting resolution. no comment…
I have also not received a reply back from Chevron Fraud dept. yet. It has been only 7 or 8 days now during the Holiday. WE will see.
Thanks for the help.