State and federal laws give you the right to dispute credit card billing errors and have them corrected. Billing errors include: A purchase you did not make or did not authorize, charges for goods or services that you did not receive or that you refused to accept, payments you made that were not credited to your account, bills that contain mathematical errors. You can also dispute charges you don’t remember making and request proof that the charge was made.
There are two types of credit card disputes which commonly arise.
The first type involves unauthorized use of a card, when someone steals, borrows or otherwise uses a card or card number without permission.
Under the law, a consumer’s obligation for unauthorized use of a card is only $50. This means, for example, that if a card is stolen, the credit card lender can only charge you a maximum of $50 no matter how much the thief has charged on the card. (Note: This limit may not apply to a “debit” card).
You should immediately make a report as soon as you know of an unauthorized use of a card. If you call before the unauthorized use occurs, you cannot be charged even $50.
The second type of billing dispute which arises involves disputes about how much you owe. The law provides a basis to dispute these incorrect bills. Information about how to raise a dispute appears on the back of each bill, including the mailing address to use. In summary, you must raise a dispute in writing within 60 days of the first bill with the improper charge. You must include the following information:
- Name and account number;
- The dollar amount in dispute;
- A statement of the reason for the dispute.
Some examples of reasons for dispute are:
- I did not authorize this charge;
- I did not receive the goods I ordered;
- I returned the goods I ordered because they were defective, but did not get a credit;
- The merchant sent me the wrong goods.
Dispute rights also apply to certain purchases on credit cards if you have problems with the quality of the goods or services purchased. These apply whenever the credit card lender owns the business from which the purchase was made, or advertises the goods or services purchased. In addition, this special right applies when the goods cost more than $50 and are purchased in your home state or within 100 miles of your mailing address. In order to dispute a charge for goods or services based on quality, you must have first made a good faith effort to resolve the issue directly with the merchant.
Once you raise the dispute, the credit card company is required to investigate and report back in writing. Until the dispute is resolved, you do not need to pay the disputed portion of the bill. However, payments to cover any undisputed amounts must be made.
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