What Happens During a Credit Card Dispute?

Individual banks and credit card issuers are bound by the laws outlined in the Fair Credit Billing Act regarding dispute settlement procedures. Consumers have the right to dispute a charge listed on their credit card bill under certain circumstances. Timing is an important consideration during a credit card dispute for both consumers and creditors.

Reasons

A credit card dispute is necessary when unauthorized charges are made to a credit card account. Other reasons to dispute a credit card charge include an incorrect amount or charge date, a charge for goods or services that you did not order or that were not delivered as agreed upon, failure to post payments, returns and other credits and mathematical errors. If the creditor neglects to send the credit card bills to your current address after proper notification, you can also dispute the charge.

Notification

The first step in filing a credit card dispute is to notify the creditor. Submit your dispute in writing to the address listed for "billing inquiries" on your credit card statement. Include your name, account number, address and a description of the dispute.

Timing

Consumers have 60 days from the date you received the first bill containing the error to notify the creditor. Make sure you keep a copy of the dispute letter; send the notification via certified mail with a return receipt requested. Creditors must acknowledge disputes in writing within 30 days of receiving notification, unless they resolve it within that time frame. The creditor has two billing cycles to resolve the dispute after receiving notification. Disputes must be resolved within 90 days.

Payment

Consumers may withhold payment of the specific charge in dispute as well as any related charges while the creditor is investigating the matter. The creditor may not threaten your credit rating by reporting a delinquency related to the disputed charge. The creditor can report that you are challenging the bill.

Investigation

Creditors investigate any charges under dispute with the company that issued the charge. If the charges are deemed correct or incorrect, the creditor must promptly inform you in writing. If the investigation concludes that you owe the disputed charges, the letter must include the amount owed and the reasons for it. Consumers have the right to ask for backup documentation, but the disputed charges as well as any finance charges accrued during the investigation are deemed valid. Consumers have 10 days after receiving an explanation to write the creditor if they disagree with the results. The creditor then has the right to begin collection proceedings.

If the investigation determines that the charges are incorrect, the creditor must notify you of the types and amounts of corrections that apply to your account. The creditor must credit the account for the disputed charge as well as any late fees, finance charges and other fees relating to the amount.

References

About the Author

Katherine Kally is a freelance writer specializing in eco-friendly home-improvement projects, practical craft ideas and cost-effective decorating solutions. Kally's work has been featured on sites across the Web. She holds a Bachelor of Science in psychology from the University of South Carolina and is a member of the Society of Professional Journalists.