5 Steps to Dispute a Credit Card Charge
Bills.com tips help consumers avoid debt by fighting erroneous charges
SAN MATEO, Calif., June 10, 2009 - Credit card errors can cause financial trouble and added debt. Fortunately, disputing an inaccurate item on a credit card bill is a manageable process with these five steps from Bills.com.
The first step in avoiding erroneous credit card charges is to always review credit card statements carefully, said Ethan Ewing, president of free online consumer portal Bills.com. "Be sure you recognize every charge on a statement. Fraudulent activity on a credit card can begin with a few small charges as criminals test whether cardholders pay attention to their statement. If you suspect someone is making fraudulent charges to your account, contact your credit card provider immediately. This provider can help you close the account and issue a new card, if necessary."
Individuals who identify an incorrect transaction on their account must contact the credit card provider to dispute the charge, following these steps:
1.Gather information. Collect data to explain specifically why you are disputing the charge. Is the amount incorrect? Is the charge for a purchase you did not receive? Or is the merchant unknown to you? Collect receipts, warranties or any other paperwork that supports the case.
2.Contact the merchant. If a server misread a tip amount or a store charged another customer's purchase to the card, many businesses are willing to correct the charge themselves. This solution is fastest and easiest.
3.Turn to the credit card issuer. When a merchant cannot or will not correct a transaction, the credit card issuer can help. Under the Fair Credit Billing Act (FCBA), customers must notify the credit card issuer that they are disputing a transaction within 60 days of the error. Notify the card issuer in writing to protect your legal rights, with a letter such as this sample dispute letter. (But to report unauthorized use, calling is acceptable -- and prudent, in order to stop potential fraud quickly.) Send correspondence via certified mail to obtain proof of delivery. The credit card company is legally required to correct the billing error within 90 days of receiving the written notice.
4.Know the rules. The FCBA only applies to revolving accounts without a set balance, such as credit cards. Installment loans -- such as loans to purchase a car or appliances -- do not qualify. Laws limit consumers' liability for unauthorized credit card use to $50, but most banks do not hold cardholders responsible for that amount. While a charge is being disputed, the customer does not need to pay the contested amount or interest that accrues on the charge. He or she must, however, pay for other charges and related interest as usual. If the dispute is denied, the credit card company can charge interest back to the dispute date, in addition to the charge itself.
5.Take serious action. If the dispute is denied, and you believe the decision is unfair, you have the option of filing a complaint with your state attorney general or the Federal Trade Commission. You also could file a lawsuit, but legal cases can be long and expensive. If you choose this route, consider seeking an attorney who will accept awarded damages as payment, in the event the case is longer and costlier than you anticipate.
"Most credit card disputes are resolved quickly by the merchant or the credit card company," Ewing said. "Take care in preparing your dispute, and you can avoid paying for unauthorized or fraudulent charges. Most importantly, you will protect your financial security and your credit history."
About Bills.com (www.bills.com)
Based in San Mateo, Calif., Bills.com (www.bills.com) is a free one-stop portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt consolidation, insurance, mortgages and other loans. Bills.com holds the No. 257 spot on the Inc. 500 list for 2008, and the No. 3 spot on Entrepreneur Magazine's Hot 100 list of the fastest-growing U.S. companies.
Bills.com and its sister companies, Freedom Debt Relief and Freedom Tax Relief, are wholly owned subsidiaries of Freedom Financial Network, LLC. The company has served more than 50,000 customers nationwide since 2002 while managing more than $1 billion in consumer debt. Its RSS feed is available at /news_releases/.