5 Steps To Disputing A Credit Card Charge

Some people consider shopping to be a form of therapy. But, when a trip to the mall ends in a credit card dispute, it is more of an aggravation. From items that never ship to products that don't work, there are many situations in which a consumer doesn't agree with the charges on their billing statement. Luckily, paying with credit cards provides a level of production not available through cash and check transactions. If you find yourself in a dispute over a credit card charge, follow these tips. (Shopping from the comfort of your couch has major benefits - and some unpleasant side effects, check out Shopping Online: Convenience, Bargains And A Few Scams.)
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  1. Review the Law
    The Fair Credit Billing Act (FCBA) provides federal protection for consumers and outlines the rules that will be considered in a credit card dispute. The act only covers billing errors, such as unauthorized charges, math errors and items that were not delivered. If you have an issue with the quality of a good or service that you received, you must take it up with the credit card company. The FCBA does not offer protection in this regard against the merchant. The Federal Trade Commission website outlines the parameters of FCBA.

  2. Talk to the Merchant
    The Fair Billing Credit Act states that the buyer must try to resolve his issues with the seller before taking legal action. The first step is to take the merchandise in question back to the point of purchase with the receipt. Talk to the manager or supervisor and explain the problem. Be sure to write down the date of your visit and the name of the person to which you spoke. If the purchase was made over the phone or on the internet, a telephone call or email to the appropriate party should suffice. This is also the time to write a letter addressed to the merchant that contains a detailed description of the issue. If you can solve the dispute with the merchant, you won't need the letter. However, if you have to take the dispute to your credit card issuer or the actual credit card company, the letter will be essential. A sample letter is available on the Federal Trade Commission website.


  3. Go the Bank
    After the merchant, the next port of call in a credit card charge dispute is the institution that issued the credit card. You will need to send a letter with the details of the dispute within 60 days of the bill being sent to you. Include a copy of the letter that you sent to the merchant, a copy of your receipt, a copy of any written agreement that you had with the merchant and copies of any other documents that support your case. Call the bank to get the correct address to which to send billing inquiries. It is important to send your documents by certified mail before the bill is due. You cannot withhold a payment once the bill is paid. It is important to remember that you are still responsible for paying for all other charges that you have incurred less the disputed charges.

    The card issuer will usually go above and beyond the minimum protections of The Fair Billing Act to help you. For example, the FCBA states that consumers are responsible for up to $50 in unauthorized charges and that the purchase must have been made within 100 miles of the buyer's home address or home state. Most card issuers will waive these requirements for their customers.

  4. Prepare to Arbitrate
    The credit card company will only step in if the bank can't resolve the dispute. This does not happen often. In this situation, the credit card company will make the final decision and come down on the side of either the consumer or the merchant. The arbitration process can last for up to 270 days.

  5. Try Other Options
    If you are still not satisfied with the outcome of your dispute and want to continue to pursue the matter, there are other options available. The consumer can take the issue up with the state's attorney general or a consumer advocacy group such as the Better Business Bureau. It is also possible to file a lawsuit against the merchant. (Hired gun not in your budget? Learn to be your own credit counselor, see 7 Tips For The Do-It-Yourself Debt Manager.)


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The Bottom Line
Buyers who know their rights under the law, act quickly and can provide the proper documentation have a good chance of getting a refund in a credit card dispute.

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