Credit Card Dispute Rules
If you carry one or more credit cards, it's important to understand your rights when using them. Federal law provides consumers specific protections in the form of the Fair Credit Billing Act (FCBA), which specifies the circumstances under which you may dispute a credit card charge or billing error. It's important to understand how the process works and what your obligations are in order to ensure that you rights are protected.
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Eligible Disputes
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The Fair Credit Billing Act applies specifically to billing errors. The types of errors you may dispute include any unauthorized charges that exceed $50; charges that list the wrong date or amount; charges for any goods or services that you did not accept or that were not delivered as agreed; mathematical errors; any failure to post payments or credits to your account; failure to send your bill to current mailing address; and any charges for which you request clarification or written explanation.
Dispute Process
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To initiate a dispute, you must write a letter to the creditor that includes your name, address, account number and a description of the billing error. This letter must be received by the creditor within 60 days of the first bill that was issued with the error in question. The creditor must send written acknowledgment of your dispute within 30 days of receiving it. The credit card company then has up to 90 days to resolve the dispute.
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Consumer Responsibilities
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During the period that the creditor is investigating your dispute, you may withhold payment on the disputed amount. You must continue to pay any other charges incurred that are not related to the dispute. If you wish to dispute charges based on the quality of goods or services received, you must make a good faith effort to resolve the dispute with the merchant first. Generally, the charges must be made in your home state and exceed $50. The creditor may choose to waive this requirement for items purchased by telephone, mail-order or online.
Dispute Resolution
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At the end of the 90-day period, your creditor is required to notify you in writing whether or not the charges are accurate. If an error is found, the creditor is responsible for promptly crediting the amount to your account, along with any finance charges, interest or late fees associated with it. If no error is found, you would also be notified of the amount you would be required to pay. You have 10 days to dispute this finding. If you fail to pay, your creditor may initiate collection proceedings against you.
Considerations
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Your creditor may not pursue collection actions against you during the investigation period. They are also prohibited from closing or suspending your account or reporting your account as delinquent to any credit reporting agency. If your creditor fails to follow the proper steps for resolving a dispute, they may not collect the disputed amount or any finance charges related to the amount up to $50. You may sue your creditor for FCBA violations for damages, court costs and up to $1,000 in finance charges.
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References
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