If you have a credit card, you may have experienced something like this: You’re reading your card’s statement, and you notice a charge you do not recognize or that is incorrect in some way.
What to do?
First, don’t panic. Your credit card offers protections against exactly this type of problem, and the card’s issuer wants to solve it as much as you do. In fact, the law compels it to help you.
Thanks to the Fair Credit Billing Act of 1974, consumers have rights when fraudulent or unauthorized charges and even clerical errors appear on their bill. The law introduced protections from unauthorized and fraudulent charges and the withholding of payment when disputes arise. It also set timelines to settle those disputes.
If and when you find yourself in this situation, here’s what you should know about how to proceed.
When you dispute a charge, the card issuer will in turn take it up with the merchant. If everything checks out, you will get a chargeback — an industry term meaning that the money is refunded to you.
“A dispute is the initial process when a credit card issuer files with the merchant. When the company sides with you, they will initiate the chargeback,” explains Nick Ewen, Senior Editor at credit card and travel advice site The Points Guy (which shares an owner with NextAdvisor.)
Creditors have 30 days to acknowledge a complaint, and must come to a conclusion regarding the dispute within two billing cycles.
How to Dispute a Credit Card Charge
If you need to dispute a credit card charge for whatever reason, the first thing to do is get in touch with the merchant you purchased the product, or service, from and ask for a refund. If they are unwilling to refund you, or are not responsive, your next step is getting in touch with the credit card issuer.
To do so, call the customer service number on the back of your credit card. You can also log into your account and look for a section dealing with account services. From there, you can file a dispute online.
For example, here’s what it looks like on American Express’ website.
For Chase, another major issuer of credit cards, click on the specific transaction you want to dispute, and then click “Dispute Transaction.”
Should you choose to dispute online, or over the phone? It’s a matter of personal preference.
“I’ve typically done it online. What I like is that it removes any miscommunication,” says Ewen. If an agent over the phone tries to summarize the conversation, they may leave out details that could be important, even if they think they are not critical. Also, you’ll have a written transcript of the conversation.
If there was a fraudulent charge, that’s different from one you are merely disputing. If you suspect you have been a victim of fraud, you should call your credit card company immediately. The issuer will cancel your credit card and send you a new one immediately; you will not be liable for any fraudulent charges.
A common case of fraud happens when your wallet is stolen or you misplace it, and someone uses your card. You will not be held responsible for any of these charges, but again, you should call your credit card company as soon as possible.
Another common fraudulent activity is someone using your credit card information online. You may still have the card in your possession, but it’s possible your information is being used elsewhere without your knowledge or permission. This can happen when someone copies the name, card number, expiration date and three- or four-digit additional code from your card and then uses that to make purchases.
Keep Details of the Transaction Ready
If you are disputing a charge because the product you bought is unsatisfactory for whatever reason, your card issuer will ask you a few questions about it, such as when and where you bought the product or products and how much they cost. Be ready to list those details.
Try disputing a purchase online, rather than over the phone. It lowers the chances of a miscommunication.
In some cases, keeping painstaking records of a transaction, especially if it’s a large one, may help you dispute it successfully even if the merchant doesn’t want to cooperate.
“My largest successful dispute was with AmEx online, and it was because I had the opportunity to add supplemental information,” Ewen says. “I purchased a new mattress from a company that offered a satisfaction-guaranteed, 120-night trial.”
Ewen didn’t like the product, so he returned it. After the mattress company picked up the return, he ordered a second mattress: “It was even worse, but the company claimed returns were only allowed ‘one per customer’,” and would not refund his money, citing that policy.
Ewen noticed that the “one per customer” notification was listed all the way at the bottom of the product’s Terms and Conditions, and used that approach to dispute the charge with American Express anyway: “I took screenshots and submitted the dispute, and got hundreds of dollars sent back to me.”
Another possible reason to dispute a charge is for bad service, but there are some restrictions in this case. As the Federal Trade Commission notes, you must have made the purchase (which must be for more than $50) in your home state or within 100 miles of your current billing address, and make a good-faith effort to resolve the dispute with the seller first.
You should also present some form of evidence to back up your story, since your credit card company likely won’t just take you at your word in this case. Again, you should try first to resolve the issue with the merchant.
Chargeback Timelines by Issuer
It’s important to keep in mind that the time you have to file a credit card dispute depends on your credit card issuer.
For American Express cards, you have up to 120 days from the date of purchase. Chase, Citi and Capital One cardholders have 60 days from the date the transaction listed on their statement.
Ewen recommends never to jump right into filing a dispute if there’s something wrong. In fact, the card issuer will ask if you’ve contacted the merchant first to make sure you’ve done your due diligence. “There are times you can come to some type of agreement without involving the credit card company,” Ewen says.
Resolution depends on the issuer and transaction: “The general rule of thumb is to allow 30 to 60 days for it to be resolved,” Ewen advises.
Even before that period elapses, you will likely be issued a temporary credit for the amount you are disputing, and no interest will be calculated on the disputed charge.