How to Win a Credit Card Dispute

Have you ever glanced at your credit card statement, only to discover a charge that you didn’t make? It can be stressful.

An incorrect charge could be the result of fraud, or it could be a simple mistake. Determining which case you’re dealing with is the first step in resolving the issue quickly.

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The good news is credit card companies handle most disputes very quickly and with very little trouble. Most companies are accommodating when it comes to fraudulent or mistaken charges. However, you will occasionally run into a case that’s hard to figure out. Or you may encounter a retailer that is unwilling to comply with you.

Patience and fortitude can help you to clear up any inaccurate charges and protect your credit score. Here are the steps you should take in order to win a credit card charge dispute.

How to Handle Fraudulent Charges

You should call your credit card company immediately if you think that a suspicious charge on your statement is the result of fraud.

Almost all companies waive your liability for fraudulent charges as long as you file your dispute as soon as you discover them. Be sure to do this as soon as possible, though, as some companies only offer this coverage for a certain number of days (usually 60 or 90). As long as you report the charge in a timely fashion, you’ll only be legally liable for up to $50 in charges if your credit card has been stolen or compromised.

Related: The Best Credit Monitoring Services

You may need to cancel your card and request a replacement. Depending on the situation, some companies will opt to close your account entirely and reopen it with a new account number (no, this won’t negatively affect your credit!). You also have the option to file a police report if you feel compelled to do so following high-dollar fraudulent charges.

How to Handle a Retailer Mistake

You may breathe a sigh of relief to know that your charge was simply an error, and your account was not compromised by a thief. Don’t rest easy just yet, though.

The surprising thing is that dealing with a charge that happened as a result of a retailer’s error can actually be more of a headache than dealing with a fraudulent charge.

Billing errors and friendly fraud typically come in the form of a merchant charging you for the same purchase twice or overcharging you. The sooner you catch the error, the better off you’ll be.

You usually have 60 days from the time you discover the billing error to notify your credit card company. You can also try to simply contact a merchant directly to resolve the incorrect charges. Many businesses will be more than happy to cancel a charge or reimburse you.

However, alerting your own credit card company to the issue is a good idea if you’d like to start a paper trail. That could be particularly helpful if a merchant ignores your calls or messages or insists that the charge is valid.

What if the charge is for a product you never received, or one that you received in an unsatisfactory condition? In this case, retailers may not be as helpful. It’s better here if you get your credit card company involved, so that you have their power backing you in resolving the conflict.

Related: 5 Ways to Build Your Credit Without Going In the Hole

Creating Your Paper Trail

It’s time to start putting things on paper if you’re not getting anywhere with a merchant even after alerting them to an incorrect charge.

Compose a certified letter to your card issuer that contains as many details as possible. You should also dig through your files or belongings to collect any documentation related to your disputed purchase. Compile receipts, proofs of return, or messages exchanged with the merchant. These can help you build your case if things progress.

Consumer Rights During a Charge Dispute: What You Need to Know

The law protects consumers by creating some basic guidelines. These establish the duties and responsibilities of credit card issuers and merchants when disputes arise.

Here is the big checklist for what you need to know when dealing with a charge dispute:

  • Your card issuer is required to investigate and get back to you within two complete billing cycles or 90 days following your complaint.
  • You do not have to pay the disputed charges while the dispute is still ongoing.
  • You do have to pay the undisputed portion of your bill while a dispute is still ongoing.
  • Your credit card company cannot report your payment as late and cannot charge interest on the disputed amount while the dispute is still ongoing.
  • You have a right to continue to challenge the error as long as you do not pay the disputed amount.
  • Your card issuer has the right to count the disputed amount against your credit limit.
  • If the dispute is resolved in your favor, the company should cancel all charges and interest for the disputed charge.
  • You will be responsible for the disputed charge and all interest that has built up during the dispute period if the issue is not resolved in your favor.

Read More: How to Correct an Error on Your Credit Report

It’s also important to remember that any charges you fail to pay after a dispute has been settled in favor of the other party could damage your credit report. Failing to pay simply because you feel that a ruling was unfair won’t help you in the long run because it could still damage your credit history. Always keep the impact on your credit score in mind when making decisions.

Once the Situation is Resolved

What should you do once the dispute is done and settled? You should still hold on to all paperwork associated with the case just in case a retailer decides to pursue some type of action against you down the road.

If your dispute was the result of credit card fraud or theft, you should file away any documentation you have regarding the fraud and it being removed from your account. There’s a chance your identity was compromised in other ways that you may not notice yet. Being able to reference the “when” and the “what” could come in handy if future issues are brought to light.

Lastly, it may be a good idea to sign up for a company that monitors suspicious financial activity for a while. You should also check your credit report, just to be safe.


Topics: Credit

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