Your rights under the Fair Credit Billing Act -- page 2

To recap:

Rule No. 1 -- Dispute a billing mistake in writing.

Rule No. 2 -- Send your dispute letter to the issuer within 60 days.

Rule No. 3 -- Include your name, address, account number and a description of the error in your dispute letter.

Rule No. 4 -- Mail your dispute letter to the address for "Billing Inquiries."

Once you've taken these steps you can sit back and let the law work for you.

Once a credit card issuer receives your dispute letter, it is required to act on it. Thanks to the Fair Credit Billing Act, it can't brush you off.

"It forces the credit card company to investigate and look into it," says Chi Chi Wu, a staff attorney at the National Consumer Law Center. "Before the Fair Credit Billing Act, the credit card company could ignore you."

Under the Fair Credit Billing Act, which was passed in 1974, your card company is required to investigate and either correct the mistake or explain why the bill is correct. Your issuer must do this within two billing cycles and take no longer than 90 days. Your issuer must also acknowledge your complaint in writing within 30 days.

Even though the law says an issuer must respond promptly to a dispute letter, some issuers may need a little nudge.

Send it certified
"A lot of companies have the position -- we didn't get your letter -- whether they received it or not," Strong says.

That's why it's a good idea to send a dispute letter via certified mail, return receipt requested. That way you'll have proof that your credit card issuer received your letter within the 60-day time period.

While the matter is under investigation, your card company may not take any action to collect the disputed amount and you're allowed to withhold payment on the disputed charge.

Will disputing a credit card charge hurt your credit? Nope. Once a card company receives your written dispute, it cannot give out information to other creditors or to the credit bureaus that would hurt your credit rating until the matter is resolved.

Once a credit card issuer has completed its investigation, it must send you its findings in writing.

If a card issuer decides the disputed charge is, in fact, an error, your account will be credited accordingly. Any finance charges or late fees related to the disputed charge will be removed from your account.

If a card issuer decides a disputed charge is correct, you must be given at least 10 days to pay the charge or to re-assert your dispute in writing. Be aware that once you re-assert your dispute and continue to withhold payment, an issuer may take aim at your credit report. An issuer may report your account as delinquent as long as the report also states that you believe that you don't owe the money.

Fighting fairly
The Fair Credit Billing Act also gives you the right to withhold payment on poor-quality or damaged merchandise purchased with a credit card.

Under the law, you do need to make a real effort at resolving the dispute with a merchant before you can ask your issuer to stop a credit card payment.

"Simply contact the merchant and try to work it out," Detweiler says. "Keep notes of what you did."

There's no need to contact an issuer in writing. You can call or visit the store if you want. The law simply requires that you make "a good faith attempt" to resolve the problem with the merchant. Be sure to keep a record of what was said for your records.

There are a couple of other rules to consider.

To be protected under the law, the credit card sale must be for more than $50 and have taken place in your home state or within 100 miles of your home address.

Luckily for consumers, not all issuers enforce the $50 or 100-mile rule on purchases made in the United States. Plus, these dollar and distance rules don't apply if the seller is also the card issuer, such as when you make a purchase in a department store with a department store card.

If you're unhappy with the quality of a credit card purchase and the merchant won't help, then try your card issuer. You can hit back at the merchant by halting your payment as long as you follow these rules.