How to Dispute a Credit Card Transaction

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Your house needs a good paint and some new carpet, so you hire someone who’s been recommended by a friend. They seem professional and friendly enough, and their business cards look legitimate. They give you a quote and, in good faith, you give them a down-payment equivalent to 20%. They promise they’ll come back in the next day or so and get started on your property, only they never show up. Weeks later, they still haven’t shown up.

If you paid with a debit card or cash, you’re simply out of luck if you can’t get in contact with a merchant that hasn’t treated you correctly. However, if you paid that 20% with a credit card, the card issuer can suddenly become a very valuable ally when you decide you’d like to get your money back. While you may not always come out ahead, you should still know how to dispute a credit card bill.

What Your Credit Card Company Has to Cover

Legally, your credit card company has to give you certain rights as a consumer because of the Fair Credit Billing Act passed in 1975. Section 170 covers disputes that concern the functionality and quality of services and goods. While this act doesn’t automatically mean that a merchant has to care about what you have to say, it does mean the credit card company does, as you can take action against them instead.

Here’s what the act makes sure you get as a consumer:

  • If you feel that someone has wronged you, you can (at the very least) sue a credit card company
  • All consumers, however, MUST make a “good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction”. In other words, you can’t approach your credit card company until you’ve approached the merchant that’s wronged you.
  • Your dispute must be above $50.
  • Your purchase must have been made in the same state that you’re filing the dispute.

So, while you do have to make a good effort to get your own money back, your credit card company is obligated to help you if you can’t manage to do it on your own. However, many credit card companies now embrace this policy, and will go above and beyond to get your money back if there is a problem. For example, many have waived the $50 limit as well as any geographic limits (due to purchases made over the Internet).

What am I Entitled to from My Credit Card Company?

The most likely course of action will be that your credit card company will issue your card a “charge-back,” or a reversal on a credit card transaction. However, once the money has been returned to you, that doesn’t mean your credit card issuer simply foots the bill. The merchant’s bank is the first contacted, and the money comes out of its pocket. Then, it’s up to the bank on whether or not they’re going to pursue the merchant for the transaction. A charge-back goes through at least two, if not three, middlemen – but that doesn’t usually affect you, as the credit card company usually bites the bullet until the merchant’s bank refunds them. Often, you’ll see your charge-back before your claim is finished, but it depends on the card issuer.

So How Do I File a Dispute?

Filing a dispute is incredibly easy in most cases. Since the law was introduced in 1975, many credit card issuers have embraced being a consumer’s ally. Not only does it make them look good, it helps you when you feel like you’re stuck with a charge you don’t deserve, so it’s a win-win for both parties. Most credit card issuers make the process exceedingly easy.

  1. Call or email: The first step is to simply call or email your credit card issuer and see if your claim qualifies. Many banks these days, such as Chase, have trained “dispute advocates” waiting on hand to help people who need it.
  2. Collect your evidence: If you have a dispute with a company, this is a good time to collect your evidence. Any call log you can produce showing that you attempted to contact the merchant several times is an excellent place to start, as is any email evidence that was not responded to.  Any pictures of merchandise or services rendered that were unsatisfactory are also good things to have.
  3. Wait for the decision: Believe it or not, it really is that easy. Once your issuer has all of the information they need, they will usually refund your charge immediately if they find the claim to be valid and pursue the merchant’s bank on their own. Sometimes it takes a little longer because of complications, but disputing a credit card bill has never been easier.

So if you’re not happy with a purchase you’ve made, or a merchant has done a poor job at serving your needs, head to your credit card company and see what they can do to make it all worthwhile.