How to Dispute a Charge: Everything You Should Know

How to Dispute a Charge: Everything You Should Know

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Consumers have the right to dispute a credit card charge, whether it was posted in error, fraudulent in nature or if the merchant didn't provide satisfactory goods or services. It is best practice to challenge fraudulent charges immediately, but only file other types of disputes after an effort is made to resolve the issue with the merchant. You typically need to file a dispute within 60 days of the transaction; however, the specific time frame will highly depend on the type of dispute you're submitting. Regardless of what type of dispute you need to file, we will walk you through everything you need to know about how to dispute a credit card charge.

Disputing a credit card charge

Consumers can dispute fraudulent charges on their bill by calling their issuer. This is typically a quick process where the issuer will cancel the credit card in question and reissue a new one.

You also have the right to dispute a credit card charge for a purchase you willingly made. This can be done for a number of reasons, including services not rendered or dissatisfaction with services rendered. For example, if you purchase something online that shows up broken, your credit card issuer can assist with getting your money back.

However, there is a more formal process you must follow with non-fraud-related credit card disputes. In this case, you typically have 60 days from the time you receive your statement to act.

Type of disputeTime limitNote
Fraudulent chargesUnlimitedCall your issuer directly
Billing error60 daysRequires specific protocol. See below.
Bad service or service not rendered60 daysRequires specific protocol. See below.

Fraudulent or unauthorized credit card charges

You can dispute a fraudulent credit card charge by contacting your credit card issuer directly and informing them of the problem. By law, you cannot be held liable for more than $50 in fraudulent charges. However, a charge of even this amount is unlikely. Today, most of the major banks offer a “no liability” feature on most of their credit cards. They waive the $50 charge, as long as you report the fraud within two billing cycles.

The Federal Deposit Insurance Corporation (FDIC) recommends you also file a police report. This is not required, but it can help the police and other government bodies to track these crimes. A single fraudulent purchase on your account may be part of a larger problem that could be potentially uncovered.

You should investigate whether a purchase was truly fraudulent or not. Make sure it wasn't done by a family member or close friend without your authorization, or due to a miscommunication. Generally, you should dispute a credit card charge only if you would be willing to also file a police report. If the unauthorized charge came about because of a miscommunication, you should work it out with the party involved before calling your bank and claiming it was fraud.

Billing errors

The Federal Trade Commission states that you have the right to dispute charges based on the following:

  • Charges that list the wrong date or amount
  • Charges for goods and services you didn't accept or that weren't delivered as agreed
  • Math errors
  • Failure to post payments and other credits, like returns
  • Failure to send bills to your current address — assuming the creditor has your change of address, in writing, at least 20 days before the billing period ends
  • Charges for which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification

You can dispute credit card charges by writing a letter to your creditor. You can use a sample letter at the bottom of this guide. During the course of the investigation, you are not obligated to pay the charge in question, but you will have to pay the rest of your bill. You must send the letter to your creditor within 60 days, and the law requires them to respond to you — in writing — within 30 days. The card issuer is also required to resolve the dispute within two billing cycles. If you disagree with the final decision, you have 10 days to indicate this. However, at this point, the creditor is allowed to begin a collections procedure. If they also choose to report the incident to the credit bureaus, they must include a note that you don't agree you owe the money.

How to dispute a credit card charge for bad service or services not rendered

The Fair Credit Billing Act — a federal law passed in 1975 — gives you the right to dispute charges in case you are dissatisfied with the transaction through a process called Claims and Defenses. You must file a report on a disputed purchase within 60 days of the statement date on which the charge appeared. Before you officially report your issue, the law requires you to try and work out the disagreement directly with the merchant. See if they are willing to provide you with a refund or some sort of store credit.

Try to save documentation that proves you attempted to resolve the issue. This can be an email exchange, or a witness to you speaking with the merchant. If this route fails, you can turn to Claims and Defenses.

It is important that you do not pay for the disputed credit card charge. Contact your issuer immediately and inform them that you are working on resolving the issue. During the course of the investigation, your creditor may lower your credit limit proportionally to the amount being disputed. For example, if you are challenging a $500 credit card purchase and your credit limit is $2,000, the creditor may set your credit limit to $1,500 while that purchase is investigated. Additionally, complaints about the quality of goods and services can only be made if the following are satisfied:

  • The transaction must exceed $50
  • The purchase must have been made in the same state as the consumer's address, or within 100 miles of the address. This does not apply to online transactions
  • The consumer is required to make a "good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction"

Assuming you meet all of the above qualifications, you should send a letter to your creditor's billing inquiries department. This address will be different from the one you use to send payments. It's best to use certified mail and ask for a return receipt so that you have proof your bank received it. The letter should include any and all supporting documentation, including a copy of any sales slips, pictures of damaged goods and any correspondences between you and the merchant. Below you can find a sample letter provided by the Federal Trade Commission (FTC).

Dispute Credit Card Charge Sample Letter:

[Your Name]
[Your Address]
[Your City, State, Zip Code]
[Your Account Number]

[Name of Creditor]
[Billing Inquiries]
[Address]
[City, State, Zip Code]

Dear Sir or Madam:

I am writing to dispute a billing error in the amount of [$______] on my account. The amount is inaccurate because [describe the problem]. I am requesting that the error be corrected, that any finance and other charges related to the disputed amount be credited as well, and that I receive an accurate statement.

Enclosed are copies of [use this sentence to describe any information you are enclosing, like sales slips or payment records] supporting my position. Please investigate this matter and correct the billing error as soon as possible.

Sincerely,

[Your name]

Enclosures: [List the enclosures]

How to contact major card issuers

Here are the mailing addresses for some of the largest credit card issuers in the United States.

American ExpressAmerican Express
Attn: Billing Inquiries
P.O.Box 981535
El Paso, TX 79998-1535
Bank of AmericaBank of America
Attn: Billing Inquiries
PO Box 982234
El Paso, TX 79998-2234
Capital OneCapital One
Attn: Disputes
PO Box 30279
Salt Lake City, UT 84130-0279
Chase BankChase Bank
Card Services
Attn: Billing Inquiries
P.O. Box 15298
Wilmington, DE 19850
CitibankCitibank Customer Service
Attn: Billing Inquiries
P.O. Box 65006
Sioux Falls, SD 57117
DiscoverDiscover Bank
Attn: Billing Inquiries
PO Box 30416
Salt Lake City, UT 84130
Brett Holzhauer

Brett Holzhauer is ValuePenguin’s travel rewards expert, focusing on credit card rewards maximization, consumer travel trends, and personal finance news. He has earned and burned over 5 million points and miles throughout his travels, saving him roughly $75,000 in travel expenses.

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