Credit Card Dispute Rights
Credit cards are safer than cash in many ways. You are out of luck if you lose cash or it is stolen, but you have recourse for credit card loss or theft. You are also protected to some extent if you have problems with your purchase. You can take full advantage of credit card benefits if you learn your dispute rights.
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Reasons
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There are several reasons for a credit card dispute. For example, your card might be lost or stolen and someone might rack up charges before you can notify your bank. Fraudulent charges might show up because someone has obtained your information without your knowledge. You may have made a purchase, but the merchandise never arrived, you only got part of your order or you were overcharged. Basically you may wish to dispute any unrecognized charges or transaction problems.
Types
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The National Consumer Law Center (NCLC) breaks credit card disputes down into two major types, each of which has different requirements. The first is unauthorized use, which involves use of your card by someone else without your permission. The second is billing errors, which includes charges for items or services you never receive, incorrect orders or overcharges.
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Time Frame
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The two types of credit card disputes each has its own time frame requirements, the NCLC explains. Unauthorized use should be reported as soon as possible because the law allows you to be held responsible for up to $50 in charges until you report the problem, the Federal Trade Commission (FTC) states. You have 60 days to report billing disputes under the Fair Credit Billing Act.
Reporting
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You must report disputes properly to preserve your rights. Call your bank at the 24-hour customer service or fraud prevention number on your credit card as soon as you realize your card has been lost or stolen. It will cancel the card and send you one with a new account number. Report unauthorized charges and other billing disputes in writing, NCLC advises. Include your name, account number, the amount being disputed and the reason. Describe any efforts you've made to resolve the situation on your own. Send the correspondence through certified mail so you can prove it was mailed within the 60 day limit. The dispute address will be on your credit card statement or the bank's website.
Process
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Your bank must acknowledge your dispute within 30 days and has two billing cycles or 90 days to investigate it, the FTC advises. The charge will be removed if the bank decides your dispute is valid. Otherwise you must notify the bank in writing if you believe the dispute is valid; explain why and enclose any supporting documentation. Valid disputes are generally upheld, according to NCLC, because merchants don't want to fight them and potentially losing the right to accept credit cards due to excessive complaints.
Alternative
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NCLC advises you have a right to withhold payment if you get defective goods from a merchant. The law requires the purchase to be over $50, and you must have bought them within 100 miles of your residence. Many banks waive the distance requirement to protect you in online transactions. You must try to resolve the issue with the merchant before withholding your credit card payment. Document your efforts and notify your credit card company if the merchant won't cooperate. You can only withhold the amount of the purchase, not your entire credit card payment, and your bank cannot report it as delinquent to the credit bureaus while the matter is being investigated. You won't have to pay the amount if the bank decides in your favor.
Warning
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Your bank may rule against you even if you feel your dispute is valid, NCLC warns. You can complain to the Office of the Comptroller or Currency, request arbitration or sue the bank if you do not feel it may have violated your rights. You can also complain to the FTC.
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References
Resources
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