One of the best reasons to pay with a credit card is that you get a built-in safety net: If something goes wrong, you can dispute the bill and get the transaction reversed.
You might ask for such a cancellation, known as a charge-back, to correct a double charge or other billing error. Or maybe that product you bought online never showed up or turned out to be a counterfeit. Maybe you never made a purchase in the first place.
Subscriptions are one of the fastest-growing charge-back categories, according to Ranjita Iyer, senior vice president, cyber and intelligence, at Mastercard. Consumers have so many of them, she says, that they may forget they signed up. Or they may have trouble canceling them.
Charge-backs can be tricky. Because increasing numbers of consumers are filing fraudulent disputes, many merchants are trying to put the brakes on these cancellations. So it’s important to play by the rules, or you might get turned down.
What’s worse, even if you win, you could end up losing. Consumers who have successfully disputed charges have in some cases been banned by Uber and other merchants, according to the Elliott Report, a consumer advocacy site. Companies may limit charge-backs to one per customer and maintain “merchant deny lists” that are shared with other sellers, according to Signifyd, one of many firms that have popped up to assist companies in fighting charge-backs.
Here are six do’s and don’ts to help you win disputes and minimize hassles.
1. Don’t delay.
You may have just 60 days from the time you receive your credit card bill to dispute a charge. So keep close tabs on your statements and check carefully for suspicious transactions. Signing up for purchase alerts can help.
2. Do double-check.
If you don’t recognize a charge, take the time to review the details. Check your calendar to see where you were that day, call the toll-free number that may be listed with the charge or do an internet search for the named merchant. (That’s how my editor learned that a baffling charge from “TWPSUB” was his washingtonpost.com subscription.) When you dispute a charge that turns out to be legitimate, it’s called “friendly fraud,” and too many false alarms could result in your credit card being terminated, says Mastercard’s Iyer.
FAQs
Here are six do's and don'ts to help you win disputes and minimize hassles.
- Don't delay. ...
- Do double-check. ...
- Don't leapfrog the merchant. ...
- Do call your card issuer ASAP if you suspect fraud. ...
- Do be patient. ...
- Don't lose track of paperwork.
This can't always be helped. You might not always get a fair outcome when you dispute a chargeback, but you can increase your chances of winning by providing the right documents. Per our experience, if you do everything right, you can expect a 65% to 75% success rate.
How to solve credit card disputes? ›
If you have problems or a dispute with something on your credit card bill, contact the issuer right away so you don't run out of time to exercise your legal protections. You could also contact the seller at the same time to try to resolve the issue.
Why do credit card disputes get denied? ›
You missed the dispute deadline: Banks dont have to process your credit card dispute if its older than 60 days from the date that you received your bank statement that includes the charge. Waiting too long disqualifies the claim. Lack of documentation: Strong evidence is required to back up your dispute.
What happens if you lose a dispute? ›
If you win, then the provisional credit becomes a full reversal of the charge. If you lose your dispute, then the charge goes back on your credit card bill. You'll be expected to pay it, just like any other transaction. Even if you don't think it's valid or that you should be required to pay it, you are.
Do credit card companies actually investigate disputes? ›
Credit card companies hire multiple fraud investigators whose primary responsibility is investigating reports of fraud. A credit card company's fraud investigation largely depends on whether the credit card owner is aware of the fraudulent transactions and reports them to the company.
Will my credit score go up if I win a dispute? ›
Disputing a charge on your credit does not directly impact your credit score. However, if your credit report changes due to the dispute, your score may change accordingly. For example, resolving an inaccurate credit utilization error might increase your score.
What happens to merchant when you win dispute? ›
If you successfully dispute a charge, the bank will notify the merchant and return funds to the issuing consumer via a chargeback. From here, merchants can decide if they want to dispute the chargeback or not.
What to do if credit card dispute fails? ›
In case the card issuer denies your dispute, you still have options. You should follow up with the lender to ask for an explanation and any supporting documentation. If you think your dispute was incorrectly denied given that reasoning, you can file a complaint with the FTC, the CFPB or your state authorities.
How do you dispute a charge successfully? ›
How to Dispute a Credit Card Charge
- Call the customer service number on the back of your credit card or on your statement.
- Email customer service.
- Dispute through the financial institution's app.
- Dispute the transaction in writing (the address should be on your statement)
In an effort to provide better service to customers, though, banks will generally move quickly on disputes. The bank initiates a payment fraud investigation, gathering information about the transaction from the cardholder.
Who pays when you dispute a charge? ›
Who pays when you dispute a charge? The issuing bank will cover the charge while the investigation is pending. You can withhold payment for that particular transaction while it's being reviewed, but you should continue making payments for other charges to avoid late fees.
How often do merchants win credit card disputes? ›
On average, merchants win approximately 32 out of every 100 chargebacks they decide to contest. This means that if you're a merchant dealing with 100 chargebacks, you can typically expect to successfully recover funds from around 32 of those disputes.
How do I file a credit card dispute and win? ›
The easiest way to get a charge off of your credit card statement is to talk to the merchant directly. Speak to a sales clerk or store manager and provide them with receipts and any other documentation you have. Often, they can correct the mistake and give you a refund.
