The Fair Credit Billing Act gives consumers the legal right to challenge and correct unauthorized credit card charges. The FCBA protects against unauthorized charges as well as charges for goods and services you didn’t accept or weren’t delivered. When you dispute a charge, as a general rule, the credit card company places the initial burden of proof with the merchant. If the credit card company is reluctant to do that at first, you have several ways to convince the company that the charges are fraudulent.
Certify Your Complaint
If you catch the error within 60 days, you can state your case directly to the credit card company and avoid dealing with the merchant. Write a letter detailing the fraudulent charges to the credit card company, and mail it to the address it lists for billing inquiries as opposed to the one where it accepts payments. Use certified mail with a return receipt requested. Include copies of any sales slips that can prove the amount charged was erroneous or other documents that support your case. You can withhold payment on the disputed amount, but you are responsible for any amount not in dispute. For example, if a restaurant is charging you $300 for a bill that only cost $30, include a copy of the receipt showing you only intended to pay $30, and include that $30 in your balance when you pay your bill.
Await the Investigation
The credit card company must acknowledge receipt of your complaint within 30 days and solve the problem within two billing cycles, or not more than 90 days. During this time, the creditor can’t take any action to collect the balance or otherwise close or restrict the account, though it can apply the balance against your credit limit. If the investigation determines the charges are correct, it will notify you of the decision in writing. You then have 10 days to respond if you object. The disputed amount can be transferred to your balance in the meantime, and collection efforts can begin. However, if you refuse to pay and the company reports your account as delinquent, it also must include in its report the caveat that you dispute the debt’s validity.
If the mistake came to your attention after 60 days, you still have rights in a process known as "claims and defenses" if you haven’t paid the disputed amount. Unlike errors caught more quickly, you have to have made a good-faith effort to resolve the conflict with the merchant first. This can include sending a letter disputing the debt and demanding it be canceled. In addition, the goods must cost at least $50, and you must have made the purchase in your home state or within 100 miles of your home. The time limit doesn’t apply when the card issuer and the business honoring the card are connected, as is the case with many department store cards, for example.
In all interactions with the credit card company throughout this process, be both polite and accurate. Don’t take that first “no” for an answer, but don’t respond by yelling or making threats either. Document any relevant information and promises made, and keep trying. Persistence can pay off; especially for charges less than $50, it may be cheaper for the company to accept your version of events than to continue with an extended investigation.
Complain and Litigate
If you don't get the results you want and you feel the credit card issuer is not following the intent of the FCBA, you can file a complaint with the Federal Trade Commission. You also can sue for damages, plus twice the amount of any finance charge and any attorney's fees. Winnings in these cases tend to be small, however, so consider the costs of hiring an attorney against the potential gain.
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