Disputing a credit card charge: new rules make it easier

Using a credit card (not a debit card) has certain advantages over paying in some other way. If you return something, for example, and the company from which you bought it does not issue a credit, you can get the credit card company to give you your money back. If you are double charged or if something is charged incorrectly, you can get the credit card company to fix it. You can, with some diligence, even get the credit card company to help you cancel charges for a service that keeps charging you every month even though you have canceled. For some background on such subscription card charges , click here.

The credit card companies don’t give you this service because they are nice. Federal law requires them to do this. Click here for some details and an overview of credit card charge disputes as well as a link to the FDIC site.

The single most important requirement for using this procedure is that you do it in writing. If you call, the law does not take effect and the credit card company may or may not examine your compliant. If you write they have to follow a specific procedure.

How to complain in writing

Most banks have required that you send in the exact form on the back of their monhtly bills with a lot of specific information. Now, because of new rules, they are making it easier to write. Bank of America just sent out a letter explaining the new system. It says that if you want to complain you just need to send them a letter containing the following information:

  1. Account name and number
  2. The dollar amount of the suspected error
  3. A description of the problem on your bill as you see it.

The transaction date and reference number for the charge being questioned is helpful but not required.

You must write within 60 days of the date the error appeared on your bill or the new rules do not apply. If you do write within 60 days, if you do that they are obligated to the following:

  1. They must respond to you in writing within 30 days, acknowledging the complaint.
  2. Within 90 days they must either correct the error or tell you in writing why they think the bill is correct.

During the 90 days, they will suspend the charge and they cannot report you as delinquent. In that time, they write to the company that entered the charge. If they get no response — or an unsatisfactory response –they usually wipe out the amount. If the company makes the case that the charge is legitimate, they reinstate it and tell you why they did that.

If the bank reinstates the charge, they then give you ten days to respond (in writing again) telling them why you think they are wrong. This starts a second investigation, and during that time they cannot report you as delinquent unless they say that the charge is under dispute. If they do report you as delinquent they must tell any organization to which they made such a report that the item has been settled, when it is settled.

You can collect up to $50

If they do not follow ALL of these rules, you are entitled to a $50 credit (if the amount is more than that) even if your bill turns out to be correct!

One more benefit: You may not have to pay for an unsatisfactory product

If you bought the item for more than $50 within 100 miles of your home or in your own state, or based on an ad the credit card company sent you, and you are dissatisfied with the purchase — and you have not yet paid it all off — you may be able to get free of paying the remainder of the bill on your credit card. First you have to try to work it out with the merchant and have some evidence of that,. Then you must write to the credit card company explaining the problem in detail. They investigate, and if what you say makes sense to them, they will cancel anything not paid on the amount. They will not refund money already paid.

Comments are closed.