Overcharges on credit cards can occur as a result of a mistake or outright fraud. It's always a good idea to monitor your credit card charges closely and be ready to dispute an overcharge when necessary. To verify the accuracy of all charges, keep your receipts and make sure they match up with the charges on your monthly bill. If there's a problem, you can get it corrected as long as you can prove that the charges are inaccurate.
Discovering an Overcharge
The good news is you're protected if you find an overcharge on your credit card. The Fair Credit Billing Act provides you legal protection from unauthorized charges on your revolving accounts, including credit cards and charge cards issued by department stores. Federal law limits your exposure to $50. Before you go through the formal dispute process associated with this law, you should try and work the overcharge out with the merchant.
Start With the Merchant
First, contact the manager of the business that overcharged you and explain the problem. Let them know that you have the receipt to verify the inaccuracy. Even if you can't find the receipt, you should still contact the manager and see if the company will correct the overcharge anyway. Many will since they want to retain you as a customer. They will also want to find out if one of their employees deliberately placed the overcharge.
Contact Your Card Company
If the company does not correct the overcharge immediately, let your credit card company know about the details of it, including the name of the merchant, the date of the transaction and the amount of the overcharge. Also, to utilize the protections of the FCBA, you should write a letter to the creditor explaining the situation. Send the letter to the address for billing inquiries instead of the payment address. The letter must be sent within 60 days of the first bill you received with the error. The Federal Trade Commission recommends that you send the letter certified and include copies of the sales slips or receipt. Also, make a copy of the dispute letter and keep the original receipts for your records.
Place the Charge on Hold
Typically, once you contact your creditor, they will put the charge on hold while they investigate the matter. They must let you know they received your dispute within 30 days. They have two billing cycles to complete their investigation and resolve the dispute. While the investigation is ongoing, you do not have to pay the disputed amount of the bill. You do have to pay the undisputed charges on your bill. Your credit card company can’t undertake any legal action to collect the debt, limit your account or report your payment as late to the credit bureau while the matter is pending. However, they can count it against your available credit limit.
Correcting the Error
If the investigation determines that an error was made, the credit card company has to notify you in writing. They must also explain the adjustments that will be made to your account. On the other hand, they have to let you know if they think the charge is correct. If you disagree with this finding, you have 10 days to inform the creditor in writing that you refuse to pay the disputed charge. While the creditor can begin collection procedures at this point, they must note on your credit report that the charge is in dispute.
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