Credit card disputes: What you need to know

Young man looking at bills and preparing to mail a credit card disputeImage: Young man looking at bills and preparing to mail a credit card dispute

In a Nutshell

Credit card disputes may occur when you disagree with the accuracy of a charge that appears on your statement. They typically fall into one of three categories: fraudulent charges, billing errors, or a complaint about the quality of goods or services purchased with your card. The Fair Credit Billing Act helps consumers in these situations by giving them the right to dispute the charge with their credit card company.
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Credit card disputes can occur for a variety of reasons.

Whether you were charged for an item you didn’t purchase or billed the wrong amount for something you did buy, disputes occur when a cardholder questions the accuracy of one or more charges on their bill.

Fortunately, federal law gives consumers the ability to dispute charges under certain circumstances through the Fair Credit Billing Act. But that doesn’t mean you can challenge any charge that appears on your credit card statement.

Let’s explore what types of credit card charges are eligible for dispute, how to dispute a charge, your obligation while the charge is being disputed and what your responsibility is if it’s resolved.

When to dispute a charge

While there are protections in place to help consumers dispute inaccurate charges on their credit card bills, those protections have limits. For example, if you’re experiencing buyer’s remorse over an expensive purchase or you wish you’d chosen the bigger flat-screen TV, you’re probably out of luck.

On the other hand, if you bought a new TV but were charged more than once for it, then you might have a case to dispute those extra charges. Here’s a list of scenarios when you may be able to dispute a charge on your credit card.

  • You were charged for purchases you didn’t make
  • You were charged for items you bought but never received
  • You didn’t receive a credit for an item you returned
  • The amount you were charged for a purchase you made was incorrect

How to dispute a charge

The proper way to dispute a credit card charge varies based on why you’re disputing it. Here are two scenarios where the FCBA dispute process may apply.

Type of disputeTime limitContact methodYour potential liability
Fraudulent chargesDispute within 60 days of the bill with the error being sent to youMail$50
Billing errorDispute within 60 days of the bill with the error being sent to youMailVaries based on issuer’s findings

One thing to note: Sometimes issuers will let you handle these problems over the phone or online, but that process may not be covered by the FCBA. If you want to be sure you get the full FCBA protections due, mail in your dispute.

Fraudulent charges

Your liability for fraudulent or unauthorized charges on your credit card is limited to $50 under the Fair Credit Billing Act. But many card issuers have $0 liability policies, so you may not have to pay anything if your issuer has this type of policy and you have eligible unauthorized charges on your bill.

If you get your credit card statement and notice charges you didn’t make, check first with any joint accountholders or authorized users to see if they made the purchase.

If you discover that a charge is fraudulent, contact your credit card issuer immediately to report it. The issuer should cancel your card so that it can’t be used anymore and send you a new one with a different card number.

How to guard against credit card fraud

Billing errors

Billing errors can occur under a number of different circumstances, including being charged for something you ordered but never received, being charged the wrong amount for a purchase you made, or being charged more than once for the same purchase.

If you want to dispute a billing error on your credit card statement under the FCBA, write your card issuer at the address listed under “billing inquiries” (it may be different from where you send your payments). Check out the Federal Trade Commission’s sample dispute letter to help you get started.

You must send your letter within 60 days of when the first bill with the error was mailed to you. Consider sending your letter by certified mail and requesting a return receipt so that you have proof of what you sent and when you sent it.

The creditor must acknowledge your complaint in writing within 30 days of receiving it (unless the problem has already been resolved within that time frame). The creditor has two billing cycles, but not more than 90 days, to investigate your claim and resolve the issue. 

Quality of goods and services

While quality of goods or services doesn’t fall under the FCBA dispute process, the legislation still provides some protections for problems with the quality of the goods or services you’ve purchased with your credit card.

If there is a problem with a product or service you paid for with your card and you want to withhold or stop payment, you must make a good-faith effort to work it out with the merchant first. If you’re unable to resolve the situation with the seller, you may be able to withhold the charge while your credit card company investigates the claim, if it meets the following requirements (with some exceptions).

  • The purchase must be more than $50
  • The purchase must have occurred in your home state or within 100 miles of your billing address

If your purchase meets these requirements, you can let your card issuer know that you want to stop or withhold payment on a product or service you received because you’re not satisfied with it while the card issuer investigates. Be sure to include any proof you have that you tried to work things out with the merchant before you disputed the charge with the credit card company.

Paying for disputed charges

For claims that fall under the FCBA dispute process, you may not have to pay the disputed charge while the credit card company investigates your claim, and the card issuer can’t try to collect payment from you for it. But you’re still responsible for paying other charges that are not disputed.

During the investigation, the card issuer can deduct the amount of the charge you’re disputing from your available credit limit. For example, if your credit limit is $10,000 and you’re disputing a $1,000 charge, you may only have access to $9,000 worth of credit while the company investigates the disputed charge.

When the investigation is complete, the credit card company must send the results to you in writing. If the company finds an error, the amount must be credited back to you, along with any related finance charges. But if the card issuer decides the charges were accurate, you’ll be responsible for paying the disputed amount, including any finance charges that accrued while the disputed charge was being investigated.

If you don’t agree with the creditor’s findings, you have 10 days from receiving the explanation to write to the creditor and let it know you’re not going to pay. If you choose not to pay, the creditor has the right to start collection proceedings.

If you don’t pay the disputed charge and the card issuer reports your account as delinquent to the credit bureaus, it must include a statement that explains that you don’t believe you’re responsible for paying the disputed amount.

Bottom line

Federal law provides protection to credit card consumers when disputing billing errors and charges for fraudulent purchases. Disputing a charge doesn’t necessarily mean you won’t have to pay it though. Whether you’re responsible for paying the disputed amount depends on the results of the card issuer’s investigation.

About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.