Published in: Credit Cards | May 6, 2019

How Does Disputing a Charge on Your Credit Card Work?

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Disputing a charge on your credit card can help you get back money from unauthorized purchases or when merchants don’t deliver as promised. Learn how the dispute process works.

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Credit cards provide important protection to consumers. One of the types of protections that credit card companies provide is the ability to dispute charges. Disputing charges means you disagree with a charge on your card and you want the creditor to help you remove that charge so you no longer owe the money.

Typically cardholders can dispute charges they didn’t make -- so if someone steals your card or uses your card number to make a purchase without your permission, you aren’t responsible for paying for the purchase.   

Cardholders can also dispute purchases they did make in certain cases, such as when merchants provide unsatisfactory goods or services or fail to provide promised goods or services. The Fair Credit Billing Act protects your right to dispute charges under these circumstances.

Disputing charges can save you a fortune if you were the victim of fraud or if a merchant lets you down by failing to live up to expectations. But there are rules you need to follow and a process to go through to successfully dispute charges. Here’s what you need to know so you’re prepared when a charge you disagree with shows up on your bill.

You have a limited period of time to dispute charges

First things first: you have a limited period of time to dispute any charges on your credit card statements. If you don’t act within the designated period of time, you may be stuck owing the money.

Typically you have 60 days from the time the disputed charge shows up on your bill to take action with the credit card company.

If you take action within 60 days of a fraudulent charge, the Fair Credit Billing Act stipulates that your liability is limited to $50 -- but most creditors have $0 liability policies so you won’t be liable for any cost at all.   

In most cases, you also have 60 days to dispute charges for purchases that didn’t turn out as expected, but your credit card company may have a different time limit -- such as allowing 90 days from the time of purchase -- so check your credit card agreement.

You can’t just stop paying your credit card bill

In most cases when you dispute a charge the credit card company will remove the charge from your statement pending a decision on the dispute resolution process. This means you won’t have to pay the disputed amount while you’re trying to resolve the issue.

However, you still need to make sure that you pay the rest of your credit card bill in full during the dispute process. Otherwise you could owe interest and late fees, could damage your credit score, and could be subject to other penalties for failing to fulfill your card member agreement.

You need to contact the merchant first

The Fair Credit Billing Act requires that consumers make a good faith effort to try to resolve issues with merchants before disputing charges based on purchases gone bad. Resolving the problem with the merchant can also be faster and easier than trying to dispute a charge.

You can let the merchant know of an inaccurate charge or problem with the merchandise they provided and ask them to correct it. Be sure to document the correspondence in writing so that you can show it to the credit card issuer if you do need to escalate to a dispute.

If the merchant doesn’t act or refuses to refund you when you have grounds for a dispute, then you can move forward with the creditor -- armed with additional evidence that you tried to resolve the problem but were stonewalled.  

Follow your card issuer’s guidelines for initiating a dispute

When you dispute a charge, you generally need to submit your request in writing. However, you can call your credit card issuer to get the process started and to obtain the forms you need. You can also typically initiate a dispute online by filling out a form on your online credit card account.

Different merchants have slightly different processes regarding the specific forms you need to fill out and the method of initiating disputes. So talk with your card issuer about what steps you’ll have to take.

Provide documentation

Your credit card company isn’t going to just take your word for it that there are problems with a purchase you made or that there are charges on your card you didn’t make. You’ll likely be asked to provide additional documentation.

This could include a sworn statement you didn’t make the charges; a police report if your card was stolen; or details about the purchase gone wrong, such as a picture of a product you received that didn’t match up to a website description.

The more documentation that you provide, the more likely it is that your card issuer will find in your favor and reverse the charges so you aren’t responsible for paying.

Wait for an investigation

When you’ve submitted your information to the credit card company to dispute charges, the card issuer will conduct an investigation. This usually involves reaching out to the merchant. The card issuer may also come back to you with additional requests for information as well, especially if you didn’t provide much documentation up front.

The timeline for how long this process will take can vary depending on the facts of the situation. It’s not uncommon for it to take a month or longer for the card issuer to gather all the necessary details. During this time, you shouldn’t have to pay back the disputed amount, as it should still be removed from your card balance until the card issuer has reached a final decision.

Wait for a decision

When the card issuer has conducted an investigation, they’ll let you -- and the merchant -- know the outcome. If you’re successful, the disputed amount will be removed from your credit card statement and you’ll no longer owe the money. The card issuer will do a chargeback in most cases when the merchant charged you inaccurately or you had a problem with a purchase, which means the money is taken back from the merchant.

Make sure you understand your rights

While the Fair Credit Billing Act provides strong protections to consumers, many credit card companies have gone even further than the law requires in protecting cardholders who have problem purchases or who are the victims of fraud.

You should read your cardmember agreement carefully to find out when you can dispute a charge and the process for doing so to make sure you understand your rights and initiate a dispute when you need help getting money returned. After all, these consumer protections are a major reason for having a credit card.

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