How to resolve credit card complaints

Handling Credit Card Disputes

by Bill Hardekopf

If you have had a credit card for any length of time, it is likely that you've had an error on your account. It could be you were billed for a purchase you never made, billed twice for a transaction, or did not receive a credit that was due on your account. When an error occurs, you have both legal and credit card protections to deal with these disputed charges.

Here are some tips for disputing an error or incorrect charge on your monthly credit card statement:

  • Contact the merchant directly. Call the business responsible for the charge and ask for a full refund.
  • If the merchant does not correct the problem or challenges you, contact your credit card issuer and ask for a charge-back. A charge-back reverses the transaction, removing it from your bill and charging it back to the merchant.
  • Keep your paperwork for evidence. Save receipts, emails, warranties, and written confirmation of promises and delivery dates.
  • Know your protections. The Fair Credit Billing Act gives conditional protections for disputes of credit card purchases.
  • File the dispute as soon as it happens. Don't procrastinate. File your claim as soon as you find the problem. Make sure your claim is accurate and contains all of the required information.
  • If disputes can't be settled, arbitration may be the next step. The fine print in your credit card agreement often contains an arbitration clause that is the required alternative to a lawsuit.
  • If the dispute cannot be settled, get help. There are several places to appeal for help, such as the Consumer Finance Protection Bureau, the Attorney General's Office, or your local Better Business Bureau.

Protections Provided by the Fair Credit Billing Act

The Fair Credit Billing Act establishes and protects consumers' rights when there are errors on the bill, such as incorrect or fraudulent charges, billing address mistakes, and math errors. Federal law also limits your responsibility for unauthorized charges to $50.

If there is an investigation, you may withhold payment on the disputed amount and related charges. However, you must pay any part of the bill not under investigation, including the finance charges. During this time, the creditor may not take any legal or other action to collect the disputed amount. The disputed amount can be counted against your credit limit. If you disagree with the results of the investigation, you may write the creditor, but you must act within 10 days after receiving the explanation, and you may indicate that you refuse to pay the disputed amount. At this point, the creditor may begin collection procedures.

The dispute procedure does not apply to disputes about the quality of goods and services since these are not "billing errors." To use dispute protection, the purchase must be for more than $50 and it must be made in your home state or within 100 miles of your current billing address. However, you must first make an effort to resolve the dispute with the seller.

The Cost of Disputes

Visa processed $2.07 trillion in transactions in the United States from September 2011 to September 2012, according to the New York Times. Cardholders disputed just 0.037 percent of that amount, but that totaled $765.9 million in transactions. The "New York Times" also said that 0.05 percent of MasterCard transactions worldwide are subjects of dispute, so its card issuers will probably deal with over 15 million questionable charges this year. The cost of a dispute averages around $25.

Bill Hardekopf is CEO of, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

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