credit cards

Disputing a credit card purchase

You can dispute billing errors, fraudulent purchases and even charges for damaged goods paid for with a credit card, but you have to know the law. The federal Truth in Lending Act, that is, along with the Fair Credit Billing Act. Your rights differ for various types of credit card disputes.

Unauthorized use

In the case of unauthorized use of your credit card, the Truth in Lending Act limits personal liability to $50. There is no time limit to report a card lost or stolen, but if you alert the issuer before someone else goes shopping with your card, you aren't on the hook for the charges.

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Debit cards don't get the same treatment. You have to report a lost or stolen debit card within two business days to limit personal liability for fraudulent charges to $50. If the thief says "credit" at the register, it still doesn't transform the purchase into a credit card transaction.

"It just means you're processing it through the Visa and MasterCard payment networks as opposed to the other ATM networks when you use a PIN debit transaction," says Chi Chi Wu, a staff attorney with the National Consumer Law Center in Boston.

Billing errors

The Fair Credit Billing Act gives consumers the right to dispute "billing errors" on their credit card statements. Examples of billing mistakes include situations where you purchased goods online that were never delivered, the issuer didn't credit a payment or return of goods, or your statement contained duplicate charges for the same transaction.

The law gives consumers a limited amount of time to catch such errors and take action. You must send a dispute letter within 60 days of the first statement that contained the mistake to the address for billing inquiries. Then the creditor must do an investigation and resolve it within two billing cycles or 90 days, whichever comes first.

The letter must provide your name and account number, a statement that the bill contains an error, the dollar amount in question and the reason for the dispute.

You can withhold payment on the portion of the bill in dispute, but are still obligated to pay at least the minimum due if a balance remains. The card issuer can still report late payments for undisputed debt.

Claims about the quality of goods and services

If your problem concerns the quality of goods or services purchased on your credit card, a section of the Fair Credit Billing Act gives you the right to dispute the charge and stop payment on that portion of the bill until the matter is resolved by the issuer.

"It's basically the right to raise claims and defenses that you have with respect to the merchant to raise them against the credit card company," says Wu.


The law has some important restrictions: The goods must have cost at least $50 and the purchase had to have been made in your home state or within 100 miles of your mailing address. Wu says to check with the card issuer if you completed the purchase online or over the phone.

Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

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