Your credit card billing statements aren’t always accurate. At some point in time, you may run into a billing error. When that time comes, you should know the right way to handle these errors. It’s better to catch billing errors sooner rather than later. If you wait too long, you may be financially responsible for the error.
Disputing a Credit Card Billing Error
The Fair Credit Billing Act, FCBA, is a Federal law that gives you the right to dispute credit card billing errors with your credit issuer. To exercise your rights, the purchase in question must be for more than $50 and it must have been made in your state or within 100 miles of your current billing address. Before you submit a billing error dispute, first try to settle the issue with the seller.
To dispute a credit card billing error, you must send a letter to your credit card issuer 60 days after the billing statement with the error was mailed to you. The credit card issuer must receive the letter within the 60-day window.
When your letter disputing the billing error, make sure you include your name, credit card account number, the date and amount of the charge you’re disputing, along with a description of your dispute.
Your billing statement typically includes two addresses, one for sending payments, another for correspondence. Send your letter to the address marked for correspondence. Your dispute letter may not be processed if you send it to the payment address. If you can’t locate an address for correspondence, call your card’s customer service and ask for it.
You don’t have to pay the disputed amount while it’s in the dispute process. Your credit card issuer can’t take adverse action against you including charging a late fee, raising your interest rate, or reporting late payments to the credit bureau. The credit card issuer can, however, add a statement to your credit report indicating you have disputed your billing statement. Under the Equal Credit Opportunity Act, other creditors can’t deny credit because you’ve disputed a bill.
Sample Billing Error Dispute Letter
Date
Your Name
Your Address
Your City, State Zip Code
Creditor’s Name
Creditor’s Address
Creditor’s City, State Zip Code
Dear Sir or Madam:
I am writing to dispute an error on my billing statement in the amount of $_______. This amount is incorrect because {give an explanation of why there is an error.}
Please correct this error and any related charges and send a corrected statement to me.
I have included copies of {include a description of any documents you’ve included to prove the disputed item is in error.}
Sincerely,
Your Name
Send your letter via certified mail with return receipt requested so you have proof that the letter was mailed and received within the 60-day window. Keep a copy of the letter for your records. If you send any supporting proof, like receipts or cancelled checks, make sure you send copies and keep the originals for yourself.
What Does Credit Card Issuer Do Next?
Once your credit card issuer receives your billing error dispute letter, they’re required to write back within 30 days letting you know your letter was received. Then, the credit card issuer will do an investigation to determine if the item you’re disputing is actually an error.
The credit card issuer has 90 days to give you a final answer, which could be one of these things. First, your card issuer could correct your bill by removing the charge you disputed and any finance charges or fees associated with the disputed item. Or, they could tell you the bill is correct and let you know why. You’ll be responsible for paying the charge and any finance charges.
Can I Dispute the Error Over the Phone?
You can call your credit card issuer to resolve the error, but to protect your rights under the FCBA, you must follow up in writing. Otherwise, if the dispute time limit passes and your card issuer doesn’t correct the error, you may have no recourse. Your credit card issuer will still be able to charge you for the error. If you refuse you pay, you could be penalized with late charges, an interest rate increase, and a negative credit report entry.
What Types of Errors Can Be Disputed?
There are several different types of errors that can appear on your credit card statement. Here are the ones that are protected by the Fair Credit Billing Act.
- Any unauthorized charges made on your credit card. You could be liable for up to $50 in charges if your credit card was stolen. However, if only your credit card number was used, you will not be liable for anything.
- Any charges that were sent through with the wrong amount.
- Any charges for good or services that weren’t delivered at all, weren’t received as promised, or that you didn’t accept. You cannot dispute credit card charges because of the quality of goods or services received.
- Any math errors, like fees that were added incorrectly.
- Payments, credits, returns that weren’t posted to your account correctly.
- Failure to send billing statements to your current mailing address as long as you sent an update of your address in writing 20 days before the billing period ended.
- Any charges that you’ve asked for an explanation or proof of purchase.
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