Not every charge on a credit card is set in stone. Whether a charge is the product of fraud, bad business, or human error, it is often not only possible, but also rather simple to have it withdrawn. In fact, the credit card issuer frequently acts in the consumer’s behalf, reversing the charge and requiring the retailer to prove that it is valid.
Reasons to Challenge a Credit Card Charge
Being charged twice for the same purchase, being charged for something you returned, or being charged for something you never received are all valid reasons to dispute a credit card charge. The credit card company may occasionally fail to credit a payment. Other instances, a charge is made by someone who is not authorised to do so.
Consumers are protected against billing inaccuracies under the Fair Credit Billing Act (FCBA). Liability is restricted to $50 in certain instances (and most major credit card issuers waive that liability). The following are examples of qualifying errors:
- Charges involving an incorrect date or dollar amount
- Errors in math (such as an incorrect total after adding a tip)
- Payments or credits that have not been posted
- The bill was not delivered to your current address (assuming you provided it 20 days before the billing cycle closing date)
- Charges for which you want proof or more information
And here are two of the most prevalent grounds for requesting a reversal:
Charges that were not allowed. Of course, fraudulent charges made by a thief who has gotten your credit card number fall into this category. It does not, however, contain charges made by a lawful business that you did not authorise.
Charges for things or services that you never accepted or that were not provided according to your expectations. This includes certain fraudulent recurring billing tactics. Many people give their credit card information for a free trial or a one-time purchase only to be charged on a regular basis. This is known as a negative option, and it is legal — the merchant can charge the customer until the customer tells them to stop. Some customers are unaware that charges are still being made, forget to cancel, or just find the opt-out process unclear or onerous. When the charges are found, the customer requests that they be reversed because they never intended to subscribe to the service in the first place.
While any of the aforementioned criteria can lead to a credit card charge being reversed, regret, discontent, and changes in financial circumstances are not, regrettably, billing errors. They may, however, be covered by other consumer protection legislation.
How to File a Credit Card Charge Dispute
Check your account statement on a regular basis. It’s better to catch an incorrect charge as soon as possible.
Choose your battles carefully. If you have a reputation for “never receiving” products you’ve been charged for, you could lose your credit card account entirely. Even if you were displeased with the transaction, resist the impulse to challenge a reasonable charge. Returns are a separate issue, and you can’t just ask for the charge to be erased off your bill to avoid having to deal with it.
Put your politeness hat on. Even if you’re in the right, improper behaviour will, at the absolute least, postpone the outcome of your case while all sides build defences and prepare for a fight. It’s fine to be forceful, but remember to be courteous, communicate clearly, and provide all essential information. Even if you feel strongly about something, refrain from calling someone names or making allegations.
Make contact with the merchant. The merchant is often a short first and last stop in the process, especially in circumstances involving human mistake (poor math or double-charging, for example). When evidence of a mistake is shown, legitimate firms will gladly repair it. When a credit card provider needs to investigate a dispute, merchants are charged a fee, thus it’s in their best interests to settle the dispute informally as possible. A high number of disputes could result in the merchant’s credit card privileges being revoked entirely. Give them one chance to work out an amicable solution.
Make contact with the merchant. The merchant is often a short first and last stop in the process, especially in circumstances involving human mistake (poor math or double-charging, for example). When evidence of a mistake is shown, legitimate firms will gladly repair it. When a credit card provider needs to investigate a dispute, merchants are charged a fee, thus it’s in their best interests to settle the dispute informally as possible. A high number of disputes could result in the merchant’s credit card privileges being revoked entirely. Give them one chance to work out an amicable solution.
Assemble your evidence and gather your opinions. Don’t be intimidated or pressured into settling a legitimate disagreement. According to the New York Times, some shops have “chargeback abuse rules” that state, “you promise not to submit a… chargeback with reference to any purchase.” Brazen! And it’s against the law! Stand firm if you come across a statement like this, or one that threatens to “report you” to a chargeback abuser database, making it “more difficult or even impossible” for you to use your credit card in the future. Determine why you believe the charge should be reversed, and if you have any paperwork to back up your claim, gather it.
Call the phone number on the back of your credit card or log into your account online. The online dispute process is equally as efficient for major credit card issuers as phoning to speak with a live agent. If more information is needed, the credit card company will usually call you. The credit card company will give the retailer a chance to show that the charge is legitimate before informing you of the findings.
Keep a record of your deeds. Make a list of the facts surrounding the issue, the names of anyone you speak with during the settlement process, the dates and times of any phone calls, and the conclusion of any interaction.
Send a letter. Many disagreements can be settled without the need of formal written communication. However, the seller may refuse to accept the chargeback in particular instances. To legally pursue a credit in accordance with your FCBA rights, you must submit your request in writing to the credit card issuer within 60 days of receiving the statement with the disputed charge. Your name, address, and phone number, the account number, the charge specifics (merchant, date, amount), the statement closure date, and the reason you are contesting the charge should all be included in the letter. You should also send copies of all the efforts you’ve made so far to address the disagreement.
You must pay your bill. If the only charge left on your credit card bill is the one in dispute, don’t stop paying it. Failure to pay the remaining balance of your payment may result in late fines and bad credit bureau reporting. You are not required to pay the disputed charge (or related charges) while the matter is being investigated, and the credit card company is unable to collect the debt, report you as delinquent, or shut your account while the matter is being investigated. Your challenge, on the other hand, can be reported. You’ll also be responsible for any interest costs that accrue during the procedure if the disagreement isn’t resolved in your favour.