How (and when) to dispute a credit card charge

We’ve all been there: You open your credit card app or check your online account to pay a bill or review recent purchases only to notice a charge it doesn’t fit.

Either it’s from a merchant you don’t recognize or from a purchase you made but for the wrong amount. Or maybe the charge doesn’t reflect a return you have done.

Many may wonder what options they have to correct those errors if the merchant is unwilling or unable to make the necessary changes. In those cases there is an option with your credit card company: file a dispute.

Let’s go over the ideal process for getting your money back if something on your credit card statement doesn’t look right.

When can you dispute a credit card charge?

He Fair Credit Billing Act of 1975 protects consumers against creditors in certain situations involving unauthorized charges and billing errors. Under the FCBA, you have the right to take action against a card issuer in these circumstances:

• Unauthorized charges
• Charges with incorrect date or amount charged
• Charges for undelivered goods and services
• math errors
• Do not post payments or credits for returns
• Do not send invoices to your current address
• Charges for which you request clarification or written proof of purchase

This means that you cannot dispute a charge just because you are dissatisfied with a product or service, or did not agree to an authorized user making a certain purchase. Think about it this way: If you are not willing to file a police report on the person who made the purchase without your permission, you should not try to dispute the purchase.

But let’s say you order a product through an online seller and that product arrives at your house destroyed. If you can’t resolve the issue with the merchant, you could move on to dispute the charge.

For TPG readers, this could also apply to certain extreme situations when obtaining refunds from airlines or other common carriers. If you can’t get a Refund from an airline when your flight is cancelled. or if you’re trying to refund tickets from an airline that went bankrupt, disputing the charge is probably the best option to resolve the issue.

Rule of thumb: talk to the merchant first

Your first course of action should always be to contact the merchant in case of billing errors or order problems. Many times, this is the quickest way to resolve a problem. Most companies will work with you to try to fix the problem without involving the credit card issuer or payment network.

But if you can’t receive a guaranteed refund or other acceptable resolution from the merchant, your next step should be a credit card dispute. It is in the banks’ interest to help you get your money back.

“Banks are making it much easier for customers to dispute charges; they want to keep their customers happy, and with the growth in dispute inquiries, an increasingly competitive landscape, and the ever-evolving demands of their cardholders, banks have no choice but to make the process as easy as possible for their customers,” said Monica Eaton, CEO of Chargebacks911.

Now that we’ve explained when you can dispute a charge, let’s look at how to actually do it.

Related: How a 10-Minute Call Reversed $2,300 in Fraudulent Charges on My Credit Card

How to dispute a purchase

If you notice a fraudulent purchase or other questionable charge (that you’ve already attempted to resolve directly with the merchant), it’s time to contact your credit card issuer to dispute the charge through them.

If you suspect an unauthorized charge has been made to your account, please call the customer service line on the back of your card to discuss next steps with the issuer, including replacing your cards and resetting your account information online.

Step 1: Gather the necessary evidence

Save receipts, photographs, and any communications you had with the merchant to try to resolve the problem. In many cases, your issuer will ask for proof of the billing error and that you have made a good faith effort to contact the merchant before they intervene.

Step 2: File a charge dispute with your issuer

Most issuers, including American Express, Chase, Citi and bank of americaoffers an easy way to do this online. There is usually a “Dispute this charge” option when you expand on a specific charge.

Remember that you can usually only dispute charges that have already been posted. Pending charges generally do not have a “Dispute” option available online or in the app.

If you can’t find where to file a dispute online, you can also call customer service and dispute a charge that way.

Step 3: Follow up in writing

Remember that while the Fair Credit Billing Act offers consumer protections, those protections depend on you following its guidelines. This means you will need to send a formal dispute letter by mail (yes, snail mail) within 60 days of the disputed charge.

He Federal Trade Commission sets out your specific rights and the guidelines you must follow to be protected. It also provides a model letter you can use.

This step is not necessary to dispute a charge with your credit card company if the issuer has other avenues to request a dispute. And most major credit card companies will work with you to resolve the problem. That said, it’s worth noting that the only technical way to be covered in the eyes of the FCBA is to submit a written request.

Because if you are having trouble getting an issuer to cooperate with a dispute, be sure to submit a written request to ensure that the issuer is held accountable to the full extent of the law.

Chargebacks: What happens when you dispute a purchase?

So, you’ve disputed a purchase. What happens next?

Many issuers will issue you what is called a chargeback. Basically, a chargeback is the reversal of a credit card purchase. A charge is sent back from your account to your card issuer, to the merchant bank, and then back to the merchant, all through the payment network used (such as Visa or Mastercard).

This removes a charge from the consumer’s account and the issuer can “charge back” the merchant when it deems appropriate. Please remember that you will lose any rewards you earned from that purchase.

In a nutshell

The Fair Credit Billing Act offers protection in cases where incorrect or unauthorized charges are made to your account, and most issuers are diligent in helping cardholders whenever possible.

You should only dispute the charges in the appropriate circumstances described above. The dispute and chargeback process can help cardholders receive refunds and correct billing errors when they can’t resolve them with a merchant.

Related: Why almost all purchases should be made with a credit card