Credit Card Dispute Laws

By Barb Nefer, eHow Contributing Writer

There are consumer protection laws for credit card users who dispute certain payments on their monthly statements. In fact, some credit card issuers offer enhanced protection for their customers over and above the legal requirements. If you know the laws, you can have additional confidence when you use your credit cards. If a problem arises, you’ll be able to file an appropriate dispute.

    Unauthorized Use Disputes

  1. If someone borrows your credit card without permission, steals it or somehow gets your number and make purchases, you can dispute those unauthorized transactions. You can only be held accountable for $50, regardless of the amount charged on your card, according to the National Consumer Law Center. However, many credit card companies will waive the initial $50 as a customer service. You should call your credit card company immediately if you discover unauthorized use. The sooner you do this, the sooner they can invalidate the card and issue you a new one. Follow up on your report in writing, and report the situation to the police if appropriate. If you do this, send a copy of the police report to your credit card issuer. The issuer may do an investigation, or it may simply remove the charges without further action.
  2. Billing Error Disputes

  3. If you find an error on your credit card statement, the National Consumer Law Center warns that you only have 60 days to file a dispute. You must do it in writing giving the following information: name, account number, the amount of the dispute and the reason you believe there is an error. Typical reasons include not receiving an item you ordered, a charge for an item in the wrong amount, receiving the wrong item, a returned item that was not credited to your account or a canceled contract that is still being billed. The law requires the credit card company to investigate the dispute and report its finding to you within 90 days or two billing cycles. If it decides in your favor, your statement and balance will be changed to reflect this. If it decides against you, it must give explicit reasons.
  4. Withholding Payment

  5. If you have a problem with something you purchased with your credit card and you have made a good faith effort to resolve the issue with the merchant, the law allows you to withhold payment. You cannot take this action unless you have contacted the merchant first, or at least attempted contact if he refuses to deal with you. The law says the goods or services must have cost at least $50, and you must have purchased them in the state in which you reside or within 100 miles of your address. However, most credit card companies waive these requirements to encourage you to use your credit card for Internet purchases. Notify the credit card issuer in writing that you are withholding payment, and cite the reasons for your action. Once you do this, it cannot report that amount as delinquent to the credit bureaus or take any other action against you without an investigation. If the investigation results in your favor, the disputed amount will be charged back to the merchant.
  6. Enforcement

  7. There are several ways to force credit card companies to abide by dispute laws. The most common is to report them to the Office of the Comptroller of Currency, a federal agency with a consumer assistance division. It oversees national banks, a category under which most credit card issuers fall according to the National Consumer Law Center. You can also take a credit card company to arbitration or sue it for failing to follow dispute laws.
  8. Warning

  9. If you withhold a disputed amount and refuse to pay it, your credit card company might file a lawsuit against you. Bring all of your documentation to court to prove that your dispute is legitimate.

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