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A Run-Down on Disputing Credit Card Charges

The Fair Credit Billing Act (“FCBA”) gives you the right to dispute billing errors and fraudulent charges that appear on your credit card account statements. This federal law applies to open-end credit accounts, including credit cards, charge cards and home equity lines of credit. It is designed to offer you protections regarding certain charges including:

  • Unauthorized charges: If you discover that your credit card has been used without your permission, the FCBA limits your totally limits the liability to $50, regardless of the amount charged. (Major credit card companies often go a step further by offering zero liability protections for all unauthorized charges.) If, you report that your credit card is lost or stolen before any charges are made, the FCBA totally eliminates your responsibility for the amount at issue.

  • Charges with incorrect amounts: You have the right under the FCBA to dispute when you are charged the wrong amount. It doesn’t matter whether the charge is a result of an error or fraud, the FCBA gives you the right to dispute the difference. According to the FCBA, for this protection to apply you must first make a good-faith effort to deal with the problem by contacting the business. Should your attempt to resolve the issue be unsuccessful, you can file a dispute with the creditor, which will investigate the questionable charge. During this time, you don't have to pay the disputed amount until after the investigation ends. If the creditor substantiates your claim that an error or fraud has occurred, it must issue a chargeback that reverses the transaction and returns the funds to you.

  • Charges for products or services that weren't delivered as promised: If an item you ordered that wasn't delivered, the FCBA allows you to dispute the charge with your creditor after you’ve made a good-faith effort to deal with the problem by contacting the business. To take advantage of this protection, you generally must have made a purchase for more than $50 in your home state or within 100 miles of your current billing address. (Major credit card companies sometimes offer a purchase protection benefit that may help if an item is lost, stolen or damaged soon after the purchase).

  • ·Bills sent to the wrong address: This protection applies if you've written to the creditor and it receives your new address at least 20 days before the end of a billing period.

To dispute a billing error, you must mail a dispute letter to the creditor within 60 days of when the creditor issues the billing statement. We recommend sending the letter by certified mail with a return receipt, so you have evidence of when the creditor received the letter. Once the creditor receives your letter, it has two billing cycles (up to 90 days) to investigate. At the end of its investigation, the creditor must write to you and explain its findings. If you are required to pay the disputed charges, the creditor is obligated to state how much you owe and why. If you don’t bear responsibility for the disputed charges, the creditor must detail what it will do to correct the error.

If you believe that your creditor has violated the FCBA, you have the right to file a lawsuit against the creditor. If the court finds in your favor, you may be awarded damages, plus twice the amount of any finance charge as long as it's between $500 and $5,000 (or higher amounts if a pattern or practice of violations is established). The court also may order the creditor to pay your attorney's fees and costs.


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