It’s often hard to believe your credit card bill actually reflects the amount of money you’ve spent. “How did I spend so much?” you ask yourself. While unrecognized charges may very well be forgotten shopping sprees, that’s not usually the case. If something looks fishy on your bill, it’s worth investigating.
Perhaps that $400 dinner has one too many zeroes. Or maybe there’s a charge at a liquor store on the west coast — and you live in New York City.
If you discover an error on your bill, you have the right to dispute the charge. It’s good to know this is not a common occurrence, but something that does still happen. For that reason, knowing how to properly dispute a credit card charge is a valuable tool to have in your proverbial back pocket. It can defend you against fraud, theft, shady retailers, and even simple mistakes on the part of a merchant.
In this article, we’ll provide an overview of the Fair Credit Billing Act and provide practical steps you can take to dispute a credit card charge in the event something happens to you.
The Fair Credit Billing Act and You
The good news: under the law, it’s your right to dispute credit card charges. The Fair Credit Billing Act (FCBA) of 1975 outlines several instances in which you may file a dispute:
- Unauthorized charges
- Charges for goods or services you didn’t agree to
- Charges incurred when your credit card issuer failed to mail your statement to the correct address
- Charges not properly credited on your account (for example, if you returned an item but the reimbursement wasn’t posted to your account)
- Math errors or charges that have the incorrect amount or date
How to Dispute a Credit Card Charge
If you need to dispute a charge, there are several steps you can take:
- Notifying the credit card company by phone
- This is the best place to start. Make sure you have the details of your complaint readily available. Be able to tell the customer service representative the date, amount, and location of the disputed charge, as well as the reason for the dispute. Be polite: it’s not the customer service representative’s fault there’s an error on your bill.
- Sending a written request to the credit card company
- Sometimes credit card issuers will ask for copies of your receipts and/or other documentation related to the charge. In this instance, you can mail (or scan and email, if they don’t need originals) a request along with the proper documentation. Other times, policy simply dictates that all disputes must be processed via written requests. Again, you’ll have to decide if it’s worth the investment of your time — and the cost of a stamp.
- Being patient
- After you’ve submitted your request, you will need to wait for an investigation to take place. Unfortunately, disputes don’t automatically result in reimbursement. While the normal window for investigations is between 7 and 10 days, you may need to wait up to 30 days to hear back. If you’re getting toward the end of that window, it’s okay to call in and check up — but don’t forget to be civil.
How to address different types of erroneous charges
Credit card disputes typically fall into one of two categories:
- A Merchant error
- Credit card fraud
In the case of merchant error, you can always speak directly with the merchant. It’s very possible the problem was a simple math or entry error, and the merchant may be willing to correct the problem for you.
If the merchant is unable or unwilling to correct the charge, you will need to work with your credit card company. Keep in mind that you are not required to contact the merchant, even in the case of simple merchant error. Your credit card company should be able to serve as a middleman on your behalf.
If you suspect fraudulent activity, you’ll want to work directly with your credit card company as soon as possible. They’ll not only investigate the dispute, but they can also help you get to the bottom of the problem and determine if it was an isolated event (e.g., a merchant who deliberately overcharged) or a situation where someone has accessed your credit card details. In the latter scenario, you may well need to cancel your existing credit card and have it reissued.
The good news: you shouldn’t have to pay interest or anything associated with the disputed charge until the dispute has been resolved. In fact, the credit card company gives you the benefit of the doubt and issues a credit during the investigation, thereby putting the burden of proof on the merchant.
If the investigation concludes and you are unsatisfied with the result (for example, if they denied your dispute), you may appeal the ruling, but you must do so within 10 days of receiving notice.
The Cost of Disputing a Claim
Many people don’t think about the costs involved with disputing a charge. First of all, the credit card company must invest time and resources in the investigation. A 2010 estimate puts the average cost at $10 to $40 per dispute.
Then, there are people who take advantage of the system to squeeze money out of honest merchants, effectively driving up prices for the next customer. For example, some unscrupulous people order an item online and then pretend it never arrived.
If a merchant fights a dispute, that requires additional resources. Many merchants automatically fight disputes above $25, while others fight every one in order to combat mounting costs.
Remember: you can’t dispute a charge if you don’t notice it. That’s just one of the reasons it’s so important to keep an eagle eye on your credit card statements.
If you spot something unfair or inaccurate, be thorough, be polite, and be persistent.