Let’s have a closer look at disputing credit card charges and what rights you have as a consumer.
What does it mean to dispute a credit card charge?
Disputing a credit card charge means that you want to question a charge on your bill.
Let’s face it: We’re online more and more, which also means that we’re most likely shopping more, which means we’re using our credit cards more than we ever thought.
These charges can quickly add up, and it’s never a bad idea to consider the ammunition we have in the event we need to question a charge that just doesn’t look right.
When we knowingly buy a certain product or service, we may skip the Terms of Services — and unknowingly agree to certain stipulations (think early termination fees, the requirement to give 60 days notice to cancel, and the like).
The more we become accustomed to shopping and buying online, the stronger we think we get. But, here and there, companies get sneaky — and you have tools to fight back when needed.
What types of charges can you dispute?
There are generally three types of charges that you can dispute on a credit card:
1. Fraudulent charges
You would obviously want to dispute this immediately (go right to Step #3 below under Exact Scripts: How to dispute your credit card charge).
The faster you act, the sooner you will avoid even bigger credit issues. For example, if the fraudster maxed out your credit card, you will be blocked from making additional purchases using that card.
Further, your higher credit usage or what they call “credit utilization” might be reported to the credit bureaus, affecting your credit score. (Yes, another potential dispute you might need to make.)
Remember that credit card companies take fraud very seriously. When you call to report the fraudulent charge, they will most likely cancel your card immediately and send you a new one with a different number.
This might sound extreme, and for sure, it’s inconvenient, especially if you have recurring charges set up with a particular merchant, or if you use the credit card for daily purchases.
2. Billing errors
Billing errors come in all shapes and sizes. Here are some examples of billing errors that you might be able to dispute on your credit card:
- A purchase you didn’t make
- A purchase you made, but you were charged the wrong amount
- A purchase for something that you did not receive (such as something that was supposed to be shipped to you or sent to you digitally)
- You returned something and were supposed to receive a credit, but it is not showing on your statement
- A recurring charge for a service you canceled
When you begin the dispute process for a billing error, make sure to double or even triple-check why the amount is in error. There could have been a discrepancy in price or an extra fee that the merchant did not make you aware of.
Taxes are always confusing, too. They might not be calculated when we check out, but suddenly appear later after the transaction has been completed.
After having undergone various billing disputes, buying online always gets our worst instincts going. Make sure that tiny checkboxes are unticked for, “Yes, please subscribe me for monthly shipments of [Product X]!”
3. Quality of goods and services
This one’s a bit tougher to dispute because it does not fall under the regular Fair Credit Billing Act dispute process.
Generally, if you were charged for something that you just don’t feel right paying for, you can dispute the credit card charge based on quality. This could meana product or service for which you are aware that the purchase was made but it is simply not up to par or not delivering for you what it is supposed to deliver.
Obviously, if you ordered a pair of shoes online and they arrived but in the wrong size or wrong color, you wouldn’t just call up your credit card company to dispute the transaction. You’d want to call up the merchant first to try and get the right shoes sent to you.
But what about a monthly subscription for a class that just isn’t doing it for you? You did what you could to cancel, but they’re just being jerks about it, telling you that they’re sorry, but there simply isn’t anything they can do for you? This is where disputing the charge with your credit card company comes in handy.
This type of credit card dispute requires a little bit more work, but Ramit has you covered. You will need to go through with all three steps below in order to get the charge removed from your account.
What types of charges can you not dispute?
We all have buyer’s remorse: after leaving the store, you regret buying that 55″ Smart TV.
Or maybe you bought the 55″ Smart TV at Best Buy, then later realized you could have gotten it cheaper at Walmart.
Either way, you cannot get a refund by disputing this charge on your credit card. Instead, you would need to return the item to the merchant and adhere to that merchant’s particular policies and procedures.
In fact, before you dispute a charge — whether a strange-looking merchant name or a strange amount you see on your credit card statement — do a bit of homework first. It’s quite possible that you did knowingly make a purchase for an item or service at an agreed-upon amount, but it renders differently on your statement.
Sometimes a Google search of the unrecognizable merchant name will reveal the true name of the company.
Then, you’ll have that facepalm moment, “OH YES! Now I remember.”
You can also do a search of your email inbox, as oftentimes a copy of a receipt is emailed to you as a way to double-check the charge.
You might also want to check with the other folks who you’ve authorized to use your credit card to see whether they’ve made any recent purchases that you’re not aware of.
It’s never a bad idea to do a little bit of homework first on a particular charge before disputing it with the merchant or the credit card company.
How long do you have to dispute a charge on your credit card?
According to the Fair Credit Billing Act, you must send your letter within 60 days of receiving the first bill showing the error you wish to dispute was mailed to you.
Ramit suggests doing it sooner — which isn’t impossible, since most credit card companies these days allow you to view your account balances and activity either online or via the mobile apps of their issuing banks.
While some credit card companies allow you to submit a claim online or via email, it’s never a bad idea to still send your dispute letter by snail mail. To be double sure, send it by certified mail with a return receipt, so you have even more proof that your letter was sent and received.
The creditor must acknowledge your complaint in writing within 30 days of receiving your dispute letter — unless, of course, the problem has already been resolved within that time frame. The creditor has two billing cycles — but not more than 90 days — to investigate your claim and resolve the issue.
When the investigation is complete, the credit card company must send you the results in writing. If the company confirms your dispute and agrees that the charge was in error, the amount must be credited back to you, known as a chargeback, along with any related finance charges.
However, if the credit card company concluded that the charge was indeed accurate, you are on the hook for paying the disputed amount, along with any accrued finance charges during the investigation period.
Don’t agree with this decision? You can appeal. You have 10 days from receiving the explanation to write to the creditor and let them know that you’re not going to pay. Of course, if you choose not to pay, the creditor has the right to start collection proceedings.
And that’s when things could get ugly. You don’t want things to get ugly.
These credit billing laws have been in place since the early 1970s to protect consumers and are curiously relevant even today. People should get their money back if they feel that they have been charged incorrectly.
To put credit, billing, and disputes in perspective, are there any Bitcoin or cryptocurrency aficionados reading this? Well, for all of the hype surrounding the blockchain and decentralized finance, there is one downside to paying for goods and services with Bitcoin: there are no chargebacks.
That means that ALL SALES ARE FINAL. If you buy with Bitcoin and want your money back, you are SOL, as they say. This is probably one reason why there are no credit cards denominated in cryptocurrency.
(We here at IWT are not making judgment calls about investing in Bitcoin or cryptocurrency, but keep this in mind when using it as a method of payment.)
