How to Dispute a Credit Card Charge

Has someone charged three hundred dollars at Critter Fritters when you don't even have a pet? Did the carpet company install a fuchsia shag instead of a beige berber? What do you do when you find charges on your credit card that you didn't make? What are your rights when it comes to a charge that you did make but are withholding payment on because goods and services weren't delivered as promised? During a lifetime of credit use, the chances of one or the other happening are pretty good. Know ahead of time what your rights and responsibilities are.

Disputing Fraudulent Charges

You can rest a little easier knowing that federal law is on your side. The Fair Credit Billing Act limits cardholders' responsibility for unauthorized charges to $50. If you do become aware of a credit card charge you didn't make, here's what you should do:

1. Call the credit card issuer immediately and explain what's happened. Provide all of the information you might have about how the card or card number may have been misused.
2. Be sure to review not only the current statement, but recent statements as well, for any additional unauthorized charges.
3. Be prepared to sign a form confirming that you did not make the charges.
4. If you haven't received confirmation (in writing or by phone) from the card issuer within a reasonable amount of time, contact the company again to make sure the charges have, in fact, been removed.
5. Stop using the card.
6. Check your other credit cards to make sure they have not been accessed.
7. Once the charge is removed, be sure to check your credit report with the three major credit bureaus (TransUnion, Equifax and Experian) to verify that your record has been updated and to see if any other fraudulent activity has taken place on your accounts.The Fair and Accurate Credit Transaction Act (FACTA) allows for all consumers to receive a free copy of their credit report from each of the three credit reporting bureaus every 12 months. Reports can be ordered through www.annualcreditreport.com or by calling 877-322-8228. You will not be able to receive a free report by contacting the credit bureaus directly.
8. Ask the credit card company to issue you a new credit card.
9. Throughout the process, keep a record of all phone conversations and the names of the representatives you spoke with. Also keep all letters, statements and other documentation together.

Disputing Charges When You're Dissatisfied

Let's say you paid for something with your credit card and now you want to withhold payment because you feel the product or service wasn't delivered as promised. Maybe you paid for roof repairs and it's still raining in your living room. Maybe you bought a new chair that collapsed as soon as you sat down. Here are the steps you'll usually have to take to resolve your issue:

1. Contact the merchant first. Many merchants are willing to replace an item, make a repair, perform a service again, or refund your money. Document your phone call and follow it up with a letter to the merchant confirming the details of the conversation.
2. If the merchant is unwilling to work with you, contact your credit card issuer as soon as possible. The card representative will need some basic information, such as the date and amount of the charge and why you wish to dispute it. Inform him or her of any attempts you've made to resolve the issue directly with the merchant.
3. Follow any instructions the credit card company gives you. For example, the representative may ask you to write a letter explaining the situation, or might want you to forward a copy of the letter you wrote to the merchant.

Every card issuer has its own procedure for handling disputes with merchants. You'll get more detailed information when you call your credit card company.

Whether you're dealing with an unauthorized credit card charge or one that you feel is unjustified, time is of the essence. Contact your credit card issuer as soon as you find your card missing or notice a mysterious charge on your statement. Likewise, contact the merchant as soon as you realize a product is defective, a service hasn't been performed as promised, or your bill is inaccurate. Diligence and good record keeping improve your chances for a satisfactory resolution.

The Fair Trade Commission (FTC) provides more information and tips for handling credit card disputes.