How Long Do I Have To Dispute Charges On My Credit Card?
Have you ever wondered if it was too late to dispute a credit card charge? Credit cards offer perhaps the most robust security of any form of payment, largely because of your legal rights to dispute a charge. Under the Fair Credit Billing Act of 1974 (FCBA), you can dispute charges to your credit card account for a number of reasons, including fraud, goods and services not received, and goods that are not delivered as specified at the time of purchase. Nevertheless, it is often unclear how long cardholders have to exercise this right.
What the law says
According to the FCBA, you have 60 days to dispute a charge, starting on the day that the first bill with the error was transmitted to you, which would appear to cover statements sent by both email and postal mail. Since many cardholders still receive statements by postal mail, it could be as little as 50 days after the statement is received before your legal right to dispute a charge expires. Nevertheless, you still have two statement cycles to note the error and file the dispute. And according to the law, cardholders have to submit written notice to the creditor.
Creditors then have 30 days to send a written acknowledgement to the cardholder and two billing cycles, or 90 days to take action. And according to the law, cardholders can only be held responsible for a maximum of $50 in the case of fraud.
How this works in practice
The Fair Credit Billing Act is a fairly strong, consumer-friendly piece of legislation, and it is actually far more effective in practice than it is in writing. For example, practically every credit card issuer waives the customer’s $50 liability for fraudulent charges by offering a zero liability policy.
When it comes to disputing charges, it is rarely necessary to file an initial dispute in writing. The vast majority of credit card issuers are willing to accept a dispute over the phone, and follow up with the cardholder in writing as required by the law, requesting further documentation to substantiate the claim. And in some cases involving minor amounts, card issuers will sometimes make an immediate decision in favor of their customer.
The same leniency is sometimes, but not always, granted to disputes filed after the FCBA’s 60-day deadline. For example, many card issuers will accept disputes related to recurring unauthorized charges. In general, card issuers are more likely to waive the 60-day notification requirement if you can show clear proof of your claim, and when the card issuer still has a means to collect from the merchant.
For example, service providers such as airlines often have a “holdback” in the agreements with credit card processors to protect both card issuers and cardholders in the event they cease operations and are unable to honor a ticket. If a traveler purchases a ticket six months in advance, only to find out later that the airline went out of business three months later, there is still a strong likelihood that the cardholder could file a successful dispute with the card issuer.
On the other hand, someone who prepays for services from a small, local general contractor might be unable to successfully file a dispute once the 60-day period has elapsed, especially if the company is no longer in business.
Tips for disputing a credit card charge
Whether or not a credit card issuer will eventually accept a dispute following the 60-day period, you should always examine your statements closely for unauthorized charges, and file a dispute as quickly as possible. Keep in mind you can file disputes for several reasons, including:
- Mathematical errors
- Charges without the correct date or price.
- Failure to receive a refund that you agreed upon.
In addition, there is another tactic you could try in order to preclude the need to file a dispute in the first place. Credit card users should always try to contact the merchant first and make a good faith effort to resolve the dispute directly. In many cases, merchants that have made an inadvertent error will go out of their way to resolve the matter and retain you as a customer. If not, it often helps to notify the merchant that you intend to file a credit card dispute if it is unable to satisfy you. Credit card disputes can be surprisingly costly for merchants, and most will do whatever possible to avoid incurring a dispute with their credit card processor. Therefore, the threat of a dispute, often called a chargeback, is sometimes enough to motivate a merchant to do the right thing.
However, if you ultimately must file a dispute with your credit card issuer, its important to follow up your initial claim with the proper documentation substantiating the facts. This can include invoices, tracking numbers, and even pictures showing delivered merchandise that was not how it was described when purchased.
By understanding both the law and the best practices regarding credit card disputes, you can enjoy the maximum amount of security that your credit card provides.