How to Withhold Payment on Credit Card Disputes

Federal law gives you the right to challenge billing errors.

The Fair Credit Billing Act gives you the right to dispute billing mistakes on your credit card. The act also gives you the right to withhold payment while the dispute is investigated. You can dispute unauthorized charges and charges for merchandise or services you never received or accepted. You also can withhold payment while awaiting written proof of purchase, for charges listing the wrong amount and for general accounting errors.

Instructions

1. Get your credit card statement. Note the address for the credit card company and the the transactions you wish to dispute.

2. Write a letter to the credit card company. Calling will not protect your rights under the Fair Credit Billing Act, which gives you 60 days from the date of your statement to review a charge. Enclose a copy of your statement with the letter, and circle or highlight the charges you are disputing. Give a reason for your dispute and tell the card company you are withholding payment because you believe the charges are inaccurate.

3. Wait while the card company responds. Under federal law, the creditor has 30 days to respond after receiving your letter. The card company can offer a definitive response at that time or inform you it is still investigating. The federal act gives the card company 90 days from the receipt of your letter to correct billing errors or tell you why it believes the charges are accurate.

4. Read the definitive response from your card company after it arrives within the 90 days. Consider the situation resolved if the card company agrees with you and corrects your statement by issuing a credit. On the other hand, the card company can demand payment from you if it rules that the charge is accurate. You then have the option of writing another letter to the card company within 10 days of receiving its letter. You can state that you still dispute the charge and will not pay. The card company can review your claims again, or it can turn your account over to its collections department and report your delinquencies to the three major credit reporting bureaus. If the credit card company does report you to the credit bureaus, it must place a note on your files indicating you are refusing to pay because of a dispute.

5. Continue withholding payment if you and the card company cannot agree and you are willing to accept possible damage to your credit score. Alternatively, you can make the payment or seek advice from an attorney.

References

• Consumer Action: Dispute A Credit Card Charge
• Federal Trade Commission: Fair Credit Billing Act