What Steps Should Consumers Take to Dispute Incorrect Credit Charges?

Disputing incorrect charges on your credit card or credit report is an important consumer right. Whether it's a fraudulent charge, an error made by the merchant, or a billing discrepancy, consumers can take specific steps to resolve the issue and ensure that their credit is not adversely affected. The Fair Credit Billing Act (FCBA) and other consumer protection laws provide clear procedures for disputing such charges.

Steps to Dispute Incorrect Credit Charges:

1. Review Your Statement: The first step is to carefully review your credit card statement or credit report to identify any incorrect charges. Look for transactions that appear unfamiliar, are billed in the wrong amount, or contain errors such as duplicate charges. Also, check the date of the charge, the merchant name, and whether any refunds or credits were applied.
   • Example: You may notice a charge for a subscription service you never signed up for or an incorrect amount billed for a recent purchase.
2. Gather Supporting Documentation: Once you identify the incorrect charge, gather any supporting documents that may help back up your claim. This could include receipts, order confirmations, emails, or communications from the merchant. If the issue is fraud-related, ensure you have any evidence of fraudulent activity, such as reports to the police or documentation from a fraud investigation.
   • Example: If you were charged for a product you didn’t receive, have the receipt for the item, any communication with the seller, or a shipping tracking number.
3. Notify the Merchant or Service Provider: Before filing a formal dispute with your credit card issuer or credit bureau, contact the merchant or service provider directly to try to resolve the issue. Many errors, like double charges or incorrect pricing, can be corrected by simply contacting the company and explaining the issue.
   • Example: If you were charged incorrectly by a retailer, contact their customer service department and request a refund or correction to the charge. Be sure to get confirmation in writing, either via email or another form of documentation.
4. Dispute the Charge with Your Credit Card Issuer: If you cannot resolve the issue with the merchant or if the charge is fraudulent, contact your credit card issuer to dispute the charge. Under the Fair Credit Billing Act (FCBA), you have the right to dispute billing errors, including unauthorized charges, billing mistakes, and errors in the amount charged, within 60 days of the statement date.
   • How to Dispute:
     • Write to Your Issuer: You must send a written notice to the credit card company’s billing inquiries address, which is often found on your credit card statement.
     • State the Discrepancy: Clearly identify the charge you’re disputing and explain why it’s incorrect.
     • Include Supporting Documents: Attach any relevant documentation to support your case, such as receipts, contracts, or communications with the merchant.
     • Send the Letter via Certified Mail: Sending the dispute letter via certified mail with a return receipt ensures you have proof that your dispute was received.
   • Example: You notice a charge for an online purchase that you didn’t make. You would need to write to your credit card issuer, stating that the charge is fraudulent, and provide any supporting documentation (e.g., the online store’s email showing the charge was not made by you).
5. Wait for Resolution: After you file a dispute, the credit card issuer is required by law to investigate the issue within a reasonable timeframe, usually within 30 days. During the investigation, the issuer cannot hold you responsible for the disputed charge, and they are not allowed to take any collection actions against you for that amount. While the dispute is pending, the charge is typically marked as under investigation on your account.
   • Example: If the disputed charge is found to be unauthorized or fraudulent, the issuer will remove it from your account. If the merchant is found to be at fault, they may correct the charge or issue a refund.
6. Monitor Your Account: Keep a close eye on your account and monitor for any further fraudulent charges, billing discrepancies, or updates regarding the resolution of your dispute. You should also check for any changes to your credit report to ensure the dispute does not negatively affect your credit score.
   • Example: After filing a dispute, you may want to review your next credit card statement and check for any updates or changes to the disputed charge. You can also regularly monitor your credit report to ensure that the issue is fully resolved.
7. Escalate if Necessary: If the dispute is not resolved in your favor or if you are unsatisfied with the outcome, you can escalate the matter by:
   • Requesting a Supervisor: If your credit card issuer denies your dispute or does not respond within the required timeframes, ask to speak to a supervisor or manager to escalate the issue.
   • Filing a Complaint: You can file a complaint with regulatory bodies like the Consumer Financial Protection Bureau (CFPB) or your local consumer protection agency if you believe your rights were violated during the dispute process.
   • Credit Bureau Dispute: If the charge is incorrectly reported on your credit report, you can dispute the information directly with the credit bureaus (Experian, Equifax, TransUnion). The bureaus will then investigate the dispute and update your credit file if necessary.
8. Fraud Protection and Identity Theft: If the incorrect charge was the result of fraud or identity theft, it's crucial to report the incident to the FTC (Federal Trade Commission) or your local consumer protection agency. You should also contact the credit bureaus to place a fraud alert or credit freeze on your account to prevent further fraudulent activity. Additionally, if the charge involves identity theft, file a police report to help further document the issue.
   • Example: If a fraudster used your credit card without permission, notify your credit card issuer immediately and file a police report. You should also request a fraud alert with the credit bureaus.

Legal Protections Under the Fair Credit Billing Act (FCBA):

The Fair Credit Billing Act (FCBA) provides specific consumer protections regarding disputed charges, including:

• You can dispute unauthorized transactions or billing errors on your credit card.
• The dispute must be made in writing within 60 days of the statement date.
• While the dispute is being investigated, the credit card issuer cannot hold you responsible for the disputed amount.
• If the dispute is resolved in your favor, the charge is removed from your account, and any related fees or interest charges are reversed.

Example:

• Scenario 1: You notice a $200 charge for a hotel stay on your credit card that you did not make. You call the hotel, and they confirm they have no record of your booking. You then file a written dispute with your credit card issuer, stating that the charge is fraudulent. The issuer investigates and removes the charge after 30 days, refunding you the $200.
• Scenario 2: You order a pair of shoes online for $100, but you are charged $120 due to an error in billing. You contact the retailer, but they do not resolve the issue. You then file a written dispute with your credit card issuer, stating that you were charged the wrong amount. The credit card issuer resolves the issue within 30 days and adjusts your bill to reflect the correct amount.

Conclusion:

To dispute incorrect credit charges, consumers should carefully review their credit card statements, gather supporting evidence, and initiate a formal dispute process with the credit card issuer or merchant. Under consumer protection laws like the Fair Credit Billing Act (FCBA), consumers are entitled to resolve billing errors and fraudulent charges with minimal financial repercussions. By following the proper steps, consumers can ensure that incorrect charges are corrected promptly and that their credit standing remains intact.