Despite the risks of overspending with credit cards, they are also extremely beneficial when it comes to fraud protection. Unlike your debit card, which is connected directly to your checking account, the credit card is connected to a credit account. This means that when you notice a billing error, you aren’t missing any money. You just need to contact the credit card company.
We actually recommend charging everything to your credit card for better consumer protection, rewards, and for building your credit. Still, it’s important to check your credit card statement every month to make sure there aren’t any fraudulent charges.
For instance, you may have thought you cancelled that gym membership, but another month was charged to your credit card. The same item may have been charged twice. Or maybe a contractor charged your card before finishing up the work they promised. Even if your card was stolen and someone decided to go on a shopping spree, you can fight all the charges.
Well, actually the credit card company will fight the charges for you. You just have to make sure you check your credit card statement before paying and contact the credit card company to dispute any erroneous charges.
For International Fraud Awareness Week, learn how to identify and protect yourself from credit card fraud. If you have identified an unauthorized use of your card, here are the steps for disputing that charge.
Fraudulent Charges
Fraudulent charges are treated differently from mere billing errors. There is no time frame for disputing fraudulent charges, but in order to take advantage of $0 liability, you should contact the credit card company within 2 billing cycles.
If you suspect actual fraud, such as someone using your credit card information without your knowledge, you simply have to call your creditor and inform them of the fraud. Most likely, they will simply remove the transaction for your credit card statement and issue you a new credit card. It’s important to notify your credit card company right away in order to prevent any further fraud on your account.
Federal law prevents creditors from holding you liable for more than $50 in fraudulent charges. Most creditors, however, have a $0 liability feature as long as you notify them within two billing cycles (about 60 days).
In addition to calling the credit card company and getting a new card, the Federal Deposit Insurance Corporation (FDIC) also recommends that you file a police report. This helps the authorities track these crimes and may provide evidence for a larger pattern or problem.
Make sure you confirm the fraudulent nature of the charge before calling your creditor. It may have been a friend or family member that used your card without permission. Generally, you should only claim credit card fraud if you are willing to file a police report.
Time Limit: Unlimited (within 2 billing cycles for $0 liability, up to $50 liability beyond 2 billing cycles)
What to Do: Call your creditor directly.
Billing Errors
According to the Fair Credit Billing Act, consumers have “60 days after the first bill with the error was mailed to you” to contact the creditor to dispute the charge. The FCBA gives you certain rights as a consumer, including the right to dispute the charge and the right to be notified of the results of the investigation.
The FCBA covers “billing errors” such as:
- unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50;
- charges that list the wrong date or amount;
- charges for goods and services you didn’t accept or that weren’t delivered as agreed;
- math errors;
- failure to post payments and other credits, like returns;
- failure to send bills to your current address — assuming the creditor has your change of address, in writing, at least 20 days before the billing period ends; and
- charges for which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification.
Source: Federal Trade Commission
How to dispute false credit card charges and billing errors
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Check your credit card statement every month
Before you pay your credit card bill, make sure you go over all of the charges first. This gives you the opportunity to review your last month’s expenses and potentially fix any erroneous charges.
It’s important to act fast when you notice a credit card billing error. You only have 60 days to provide written notice to the credit card company, so contact them as soon as possible after you notice an error.
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First, contact the merchant
You may want to skip this step if you know that the merchant isn’t going to help you. But, if there is any chance you can resolve the charge with the merchant, you should contact them first. For instance, if a local bar or restaurant mistakenly overcharges you, just give them a call. Most businesses will happily rectify the situation if they overcharged you.
If you can’t get the false charge fixed with the merchant, move on to step three.
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Call the credit card company
You can dispute a charge by calling your credit card company and speaking with a representative:
- Visa: 1-800-847-2911
- American Express: 1-800-528-4800
- MasterCard: 1-800-307-7309
- Discover: 1-801-902-3100
- Capital One: 1-800-227-4825
- Chase: 1-800-432-3117
Make sure you have all your proof and documentation with you and then just explain how you would like to dispute a charge on your credit card statement. The credit card company should begin an investigation and issue you temporary credit in the meantime.
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Contact the credit card company in writing
To be covered under the FCBA, you must write a letter to the creditor at the address for “billing inquiries” within 60 days after the credit card statement with the error was sent to you.
The Federal Trade Commission provides a useful sample letter that you can use to dispute credit card billing errors. Before you send the official notice in writing, make sure you have double-checked that the charge is in fact a mistake.
Include any information that helps your claim, such as copies of receipts, emails, and telephone conversations.
The FTC recommends sending your letter using Certified Mail so you have proof you sent the letter. Make sure you get a mailing receipt, which provides you with a unique identifier and record of delivery. Keep the return receipt, a copy of the dispute letter, and any other documents or proof that supports your position.
What happens next?
The credit card company has 30 days to respond to your billing dispute and either issue a chargeback or deny your claim. Most credit card companies have a pretty efficient process for disputing charges; however, you can withhold payment for the disputed amount while the investigation is underway. You still must pay the rest of the undisputed credit card bill.
After the investigation is complete, the creditor needs to send you notification in writing of the mistake and how your account will be credited, including all finance charges, late fees, and any other related charges. If the investigation determines that you still owe some or all of the disputed charge, you must be given written notification of how much and why.
Disputing credit card transactions doesn’t harm your credit score and is an important part of financial wellness and responsibility.
If you have any questions about your rights as a consumer under FCBA or need help managing your debt, don’t hesitate to contact the debt specialists at DebtBlue.