Know Your Credit Card’s Dispute Policy

Photo: Hannah Wei on Unsplash

When fraudulent charges appear on your credit card statement or are flagged by your card issuer, you know to cancel your card and report them as fraudulent.

Sometimes, though, a transaction isn’t a scam—it might have been made in error, or you may never received a product you ordered, for example.

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If that’s the case, rather than cancel your card, familiarize yourself with your issuer’s dispute policies, suggests Amanda Leighty, a consumer protection investigator and advocate, on the Financial Diet:

Sometimes you place an online order and it never shows up, but the company won’t issue a refund. Sometimes a subscription provider doesn’t listen when you ask to cancel and continues to charge you anyway.

In these instances, the dispute button is your best friend. 

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How to dispute charges

First, assuming you’re already checking your statements regularly, make sure you have the receipts/proof of purchase necessary to confirm that you actually were billed in error. Then contact the seller or company whose product or service you’re dissatisfied with. That’s typically an easier and quicker way to resolve an issue.

But if they aren’t responsive or you still see the charge on your statement, you have some recourse.

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As CreditCards.com writes, consumers have some protections from billing errors under the 1975 Fair Credit Billing Act (FCBA). You can dispute a charge if:

  • You were overcharged: Check the price against your receipt.
  • You didn’t actually make the purchase: If you see an unknown vendor on your bill, for example, you’ll want to dispute that ASAP.
  • You were charged multiple times for the same thing: Call the vendor to work this out.
  • You didn’t get what you paid for: This is the trickiest to prove, but if the product or service doesn’t come as advertised, you might be able to dispute the charge.

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Note that you can’t dispute a purchase that was made by an authorized user (like your kid) or because you have buyer’s remorse.

After you’ve tried working things out with the seller you can go to your card issuer. “The FCBA requires that you submit a written notice to your bank’s billing department within 60 days of the charge appearing on your credit card statement,” writes U.S. News. The FTC has a sample letter you can send.

You can usually dispute charges online. “When you log in to your account online, most card providers allow you to click on a particular transaction and file a dispute easily with one click and a simple explanation on why you think you’ve been wrongly charged,” writes Leighty. You’ll need your receipts/other proof of the inaccuracy.

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Here’s how to dispute charges for some of the big issuers:

Alternatively, call the number on the back of your card.

Your creditor should send you a letter within 30 days that it’s received your complaint. “You may withhold payment on the disputed amount (and related charges) during the investigation,” notes the FTC. “You must pay any part of the bill not in question, including finance charges on the undisputed amount.”

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If the bank agrees the charge was made in error, they’ll issue a charge-back and remove any financing charges or fees related to it. If they don’t, they’ll send you a letter letting you know why within two billing cycles. If you think your creditor isn’t adhering to the FCBA, you can file a complaint with the FTC.

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