Steps to Dispute Credit Card Statement Errors
Credit card billing statements are handled electronically, but that doesn’t mean they’re error free. Billing errors - including uncredited payments or returns, finance charge calculations, and unauthorized charges - are more common than you might think. In a November 2011 report, the new Consumer Financial Protection Bureau reported that credit card billing disputes were the top complaint received from consumers. So, if you’re dealing with a billing error, you’re not the only one. But, before you go straight to the top, first try to resolve the error with your creditor.
The Fair Credit Billing Act gives you the right to dispute billing errors directly with the creditor. The law applies to any type of open-end or revolving credit accounts that you can pay and reuse over time.
The Right Way to Make Your Dispute
When you spot an error on your billing statement or you have an issue with a product you charged on your credit card (one that you can’t resolve with the merchant), write a letter your creditor explaining the situation. Many creditors will handle your issue over the phone, but sending a letter is the only way to ensure your rights are protected under the FCBA. If you only make a phone call, you could ultimately be liable for the charges.
In your letter, list the amount of the error and explain why that amount is incorrect. If you have proof that supports your dispute, send copies but keep the originals for your records. Your letter should reach the creditor within 60 days from the time the creditor first mailed the inaccurate billing statement. After 60 days, the creditor isn’t required to handle your dispute so be sure to send your letter immediately after you spot the error.
The address for sending billing disputes probably isn't the same address for sending payments. Look at your billing statement, or call your creditor, for an address specifically for “correspondence” or “billing inquiries.” Use that address for your billing error letter.
For extra insurance that your rights will be respected, you should mail your letter via certified mail with return receipt requested. This gives you proof of the date your letter was mailed and received, and the signature of the person who received it. If the creditor doesn’t respond in time or allege you didn’t send your letter in time, those receipts will come in handy.
What the Creditor Is Required to Do
Within 30 days of receiving your dispute, the creditor has to acknowledge your complaint, if the dispute hasn’t already been resolved by that time. Then, the creditor has between two billing cycles and 90 days to resolve your dispute. Creditors are required to follow this timeline perfectly. Otherwise, you don’t have to pay the disputed amount or any finance charges or late fees related to the amount.
If the creditor’s investigation shows that there was indeed an error on your billing statement, they’ll send a letter telling you that your account was corrected. If there were any interest charges or late fees associated with the disputed amount, these charges should be removed.
You’ll also get a written explanation if, for some reason, you owe the disputed charges. You can ask for proof if you still have doubts about owing the money, but at that point, you’ll have to send payment to avoid further fees or penalties.
Your Right to Withhold Payment
You’re not required to pay the disputed charges as long as the creditor is still investigating. However, you're still responsible for making timely payments on any undisputed credit card balance.
The creditor can’t report a delinquency to the credit bureaus when you don’t pay disputed charges, but they can report that you’ve made a dispute. You disputing these billing errors won’t affect your credit rating. Furthermore, it’s illegal for other businesses to turn you down for credit or other services because you’ve disputed a billing error.
What to Do When You Still Have an Issue
When a creditor doesn’t handle your dispute properly, you can complain to the Consumer Financial Protection Bureau via their website: ConsumerFinance.gov. The bureau helps facilitate a resolution between you and the creditor.
You have the right to sue a creditor who violates your rights under the FCBA. If you win, you can receive between $100 and $1,000 in actual and punitive damages and have the creditor pay your legal fees. Make sure you keep all documentation related to your dispute in case it ever has to be resolved in court.
Sources: ConsumerFinance.gov, FTC.gov