How to dispute charges on your credit card

This was originally published on Monday, July 28, 2014, in the Pacific Daily News.  Click here to subscribe to the PDN.

Question: While looking at my monthly credit card statement, I noticed an unfamiliar charge. How do I dispute the charge?

Answer: Great job on being alert and attentive. Many people don’t take time to look at their monthly statements. Mistakes do happen and more times than not, the charge is disputed in the favor of the card holder. The sooner the mistake is found, the better chance you have on disputing the charge.

Mistakes on credit card charges can happen for many reasons. The most common are being billed twice, being overcharged, a credit return failed, non-delivery of goods through the mail or an unauthorized purchase. When a dispute is made, the credit card companies will investigate.

The first step is to gather all information on that purchase; a receipt will definitely be an asset. If the charge is fraudulent, be sure to look through all your receipts. Sometimes online stores use a third party to handle their purchases and the statement will list that third party’s name, not the online shop.

Before contacting your bank, call the merchant to see if the charge can be disputed with them. If the error is a mathematical mistake or a non-receipt of a product or service, the merchant will usually correct the error. If the merchant is not willing to correct the error then contact your bank. By contacting the merchant first, you are showing a “good faith” effort to work out the situation.

Next, write a letter to the credit card company. The law gives you 60 days after the billing error appears to dispute it. Address the letter to the billing inquiries department and not the collections department that you send your payments to. The letter should include the name that appears on your card, your mailing address, account number and a brief description of the error (include the date of the charge). A copy of the receipt should be attached if you have it. Send the letter certified mail with a return receipt and keep a copy of the letter.

The law provides consumer protection rights when disputing a charge. By law the credit card company must acknowledge the complaint in writing within 30 days of receiving your letter. The credit card company then has 90 days to investigate the error and make a decision. You are not responsible to pay the amount being disputed, but the undisputed portion still has to be paid. The law also protects you by restricting the credit card company from reporting the disputed amount as a late payment to the credit bureaus.

During the investigative process the credit card company can keep the limit that you are disputing as a balance on your card. For example, if you are disputing a $500 charge and your credit limit or balance is $2,000, that would leave you with $1,500 of available credit.

If the investigation determines that the billing is correct, you will be responsible for paying all or a portion of the amount. The credit card company must explain to you in writing why they made that decision. If you disagree with the outcome, you have 10 days after being notified of the decision to write the credit card company and inform them that you are not paying the amount. Do note that the credit card company can then start the collection process, including contacting the credit report bureaus of your late payment. If they do report it to the credit bureaus, the report must state that you do not agree with the outstanding amount. The amount you are responsible for may also include any fees or late charges.

On the other hand, if the bank makes judgment in your favor and you are not responsible for the amount owed, they will credit your account the amount disputed and remove any fees or late charges associated with the amount in error.

If the credit card company does not follow any of the procedures or deadlines, they cannot collect the amount in question even if the amount is determined not to be an error.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at and read past columns at the Money Matters blog at

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