Credit Card Disputes Everything You Need To Know To Come Out A Winner

Credit Card Dispute

Have you ever received your credit card statement and realized that there is a charge on there that shouldn’t be? Disputing something on your credit card can seem pretty daunting, but it doesn’t have to be. I’m going to walk you through the credit card dispute process so you understand the steps to take to come out a winner!

I know it can be pretty frustrating when you see a charge on your statement that shouldn’t be there. But the good thing is, fraudulent charges or double billings aren’t as difficult to deal with as one may think.

In most cases, credit card disputes over billing errors have a good chance of being resolved in your favor thanks to the Fair Credit Billing Act.

Can I Dispute a Credit Card Charge?

Absolutely. The easiest way to identify a charge that may need to be disputed is by paying close attention to every transaction (large and small) on your credit card statement.

Most people find it’s easier to recognize unauthorized charges by monitoring their transactions throughout the month.  It’s really easy to do this online rather than waiting for your month end billing statement to arrive in the mail.

Valid Reasons To Dispute A Credit Card Charge

You can dispute credit card charges with your lender for three reasons under the Fair Credit Billing Act:

  • Fraud or Unauthorized Purchases– Someone else used your card without your permission.
  • Billing Errors– A merchant charged you for 3 lawnmowers, but you only bought one.
  • Disputing Bad Service– You’ve made a good effort to resolve a problem with the merchant but you aren’t getting anywhere.

What Happens When You Dispute A Credit Card Charge?

After you submit a dispute it is your credit card companies responsibility to conduct an investigation. During the investigation, you aren’t expected to pay any of the disputed charges until a decision has been made.

Within this period you are also given the right to forgo any late fees or interest on the disputed amount. It’s the credit cards responsibility to get back in touch with you within two complete billing cycles with their decision.

Is There A Time Limit On Disputing A Credit Card Charge?

Glad you asked! Be sure to do this as soon as possible, as some companies claim to only offer this coverage for a certain number of days (usually 60 or 90). If it’s been longer than 60-90 days you could be liable for the charges.

The Fair Credit Billing Act says that you should report unauthorized charges and other credit card billing errors to your credit card issuer within 60 days of the date the statement containing the error was mailed.


Fraud or Unauthorized Purchases

The first credit card protection and probably the one you have heard of the most shields you from fraud or unauthorized use of your credit card. This includes someone who steals, borrows or uses your card or card number without your permission.

By law, you can’t be held responsible for more than $50 in fraudulent charges no matter how much has been charged on your card. However, most major credit cards offer a “no liability” feature on their cards.

What this means is if you report the fraudulent charge within a reasonable amount of time most companies will waive the $50 charge.

As you can see it’s really important to monitor your credit statements.

If you think that a charge is incorrect take some time to investigate if the purchase was truly fraudulent. Make sure it wasn’t charged by someone in your family who forgot to tell you about it.

As soon as you’ve done your research and can confirm there was unauthorized use of your credit card, you need to call the number on the back of your card to make a report.

After contacting your credit card company they must conduct a “reasonable” investigation of your claim. The lender or bank may opt to cancel your card and send you a replacement to prevent someone from continuing to use your old card.

Depending on the situation, some companies will opt to close your account entirely and reopen it with a new account number (no, this won’t negatively affect your credit!)

Be sure that you report any and all unauthorized charges no matter the amount.

A couple of years ago I noticed that we were getting ten cent charges scattered throughout our statements. I know, such a small amount! However, with this credit card scam, the thieves were making millions of dollars penny by penny.

When I called the bank they said that the scammers typically make a small charge to your account and then follow it up with a much larger charge. The small charge is typically just them testing to see if the account is active before they charge a larger amount.

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    Billing Error Disputes

    The second most common reason to dispute a credit card charge is due to billing errors. The Federal Trade Commission states that you have the right to dispute the following billing errors:

    • Charges that list the wrong date or amount
    • Charges for items you returned because they were defective or different from what you ordered
    • Math errors
    • The company’s failure to credit your account for something such as a return
    • The company’s failure to send bills to your current address. Assuming the creditor has your change of address, in writing, at least 20 days before the billing period ends.

    If you have encountered any of the above billing errors the Fair Credit Billing Act requires you to raise a dispute in writing to begin the resolution process. I’ve included a printable template below to help you with this process

    You must send the letter to your creditor within 60 days of the first bill. The law requires them to respond to you in writing within 90 days. The company must either correct the error or explain why they believe the amount on the statement is correct

    The letter must include the following information:

    • Your name and account number
    • The dollar amount you dispute
    • A statement of the reason for your dispute

    Send your letter to the address provided by your lender. You usually need to send the letter by mail, but they may list an email or website address to file a dispute. A good place to find your credit card companies address and details of how to raise a dispute is to look on the back of your credit card statement.


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      Disputing Bad Service

      The third reason to dispute a credit card charge is if you had bad service or are dissatisfied with something you bought with your credit card. Back in 1975, a federal law was passed that gives you the right to dispute charges if you are dissatisfied with various transactions.

      I’m sure you have seen signs posted at some of your favorite retailers “100% satisfaction money back guarantee”. Well, this is a pretty legit statement. Many retailers want you to be happy with what you purchased so they offer a generous refund policy.

      You can dispute a credit card charge for bad service if you have a legitimate complaint about the quality of goods or services you bought with the card. Remember though, your first line of defense is to try to resolve the problem with the merchant directly.

      If the merchant is unwilling to resolve your problem, your next option is to ask your credit card company to reverse your payment.

      Under the Fair Credit Billing Act, you are given the right to dispute charges for bad service to your credit card lender. Many lenders have a customer focused process to deal with these situations which makes coming to a resolution really pretty easy.

      Obviously, you should never take advantage of a generous return policy that any store offers. You should also never take advantage of disputing credit card purchases without a legally valid reason.

      Before telling your credit card company, “I’ve been billed for something I shouldn’t.” Save the retailer and yourself some trouble: Make sure you have a legit reason for disputing.

      Once you’ve determined that you’re going to move forward and file a claim. Notify your lender to inform them that you’re working to resolve an issue and you’ll be withholding payment.

      After your credit card company has been notified they cannot report the disputed amount as delinquent to a credit bureau until the dispute is settled or a court judgment is issued against you.

      The lender cannot treat the dispute as “settled” or take collection action against you unless they have completed a reasonable investigation of your claim.

      During this time it’s very important that you don’t pay for the disputed charge. If you pay it there’s no guarantee that the money will be returned to you in you win your dispute.


      How Long Does It Take To Reverse A Credit Card Transaction?

      Yahoo! You’ve taken all the right steps along with filing a credit card dispute and have won.  You may be wondering what’s the next step and how long will it take to get my money back. 

      Unfortunately, it could be several months before you actually see the money refunded into your account.  As noted above the lender must resolve the dispute within two billing cycles but not over 90 days.  Based on this, the whole process from start to end could take as much as 6 months.  So do your best to brace yourself if you find yourself in this situation, it could be a long road.

      Final Thoughts

      In this article, I’ve given you all the ins and outs to credit card disputes.  I really hope you found everything helpful. I  want you to remember that dealing with these disputes in a timely manner is essential to maintaining a good credit score.   If you’d like to learn more about how the whole credit scoring process works check out this comprehensive guide.

      If you have any questions at all please please don’t hesitate to ask!

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