How to resolve credit disputes:
Letter of the law requires letters
By Libby Wells • Bankrate.com

If you have a beef with your credit card issuer, angry letters to the bank president and nasty calls to customer service reps might be cathartic, but they will get you nowhere.

Overcharges, indecipherable bills, calculation errors and a bevy of other account problems cause cardholder angst every day. But with a little finesse, the right documents, a basic understanding of consumer rights and dispute procedures -- as well as a lot of patience -- you can prevail over Big Bank.

If the billing dispute is with a merchant, attempt to solve the problem with them first. If you are not satisfied, get your credit card company involved.

Before you take issue with a card company, though, there is one cardinal rule that bears repeating like a mantra: Paper protects.

Some people think billing problems can be resolved through phone calls, faxes or e-mails. But only by addressing the matter in writing are consumers guaranteed protection under the Fair Credit Billing Act, the federal law that outlines procedures for billing disputes.

"The only sure way to protect your rights is a paper record," says Howard Strong, author of What Every Credit Card User Needs To Know: How To Protect Yourself and Your Money. "Ten phone calls will not do it. You need a letter to trigger the protective mechanisms of the law."

Your first letter of response to a billing error is the foundation of the fight, so you have to make sure you get it right.

It's true: Honey beats vinegar
A mistake some consumers make when they receive an erroneous bill is to hastily contact the creditor when they are upset. Complaining is an art, and your demeanor can help or hurt your case.

"Being nasty, rude or impolite to the person you are asking to help you may seriously hinder your reaching any solution," says Strong.

A lawyer who has been doing battle on behalf of cardholders for nearly 25 years, Strong suggests sweetening your correspondence.

"Using phrases such as 'I have a problem and I need your help,' or 'We have a problem' makes the person you want to help you your ally," he says.

Fight your way uphill
It's important also to follow the chain of command. There's always time later to write the bank president if you don't get satisfaction on the ground floor.

"If you start at the bottom, you might get your problem solved there. If you don't, you can move up the line and have more opportunities to get what you want," says Strong.

Honey and corporate etiquette won't help, though, if you don't write your credit card company within 60 days after the faulty bill was sent to you. It's critical that card customers meet the deadline required by the Fair Credit Billing Act.

"If you don't get that letter off before the period for making objections is over, you're going to be fighting two battles instead of one," warns Robert Green, an attorney with the National Association for Consumer Advocates.

Be sure the letter is typewritten. Include your name, address, account number, a brief description of the problem, and copies -- not originals -- of sales slips or other documents that support your position.

"Limit the information in the letter to the really important facts," says Green. "Keep it to a page."

To add a little clout, he suggests sending a copy to one of the federal agencies that regulates banks and other financial institutions, such as the Comptroller of the Currency or the Federal Trade Commission.

"It looks good and it's something the banks are worried about," says Green.

Make sure you keep a copy of the letter for yourself, then send the original missive by certified mail with a return receipt. "It costs more money and a trip to the post office, but it's well worth it to have verification of delivery," says Strong.

A cheap alternative to certified mail
A cheaper, easier way to verify receipt -- but one that's not as reliable as certified mail -- is to send a check as payment on your account, along with your dispute letter. Note on the bottom of the check that it was enclosed with a letter to the billing department.

There is one caveat, though. "If the creditor never cashes your check, you have no proof it got your letter," Strong says.

Because the paper trail is the key to your complaint, credit card customers might want to weigh the worth of calling the 800 line on the back of their bill if they've got a messy problem.

Unbeknownst to many consumers, that number does not link them to their credit card issuer. Most banks, even small ones and credit unions, hire companies to field incoming calls from their card customers.

Unless you can reach a supervisor who has access to more account information than an entry-level customer service agent, it can be hard to get help.

Debbie Brooks, vice president of Credit Card Management Services, a West Palm Beach, Fla., company that assists people with card debts, makes frequent calls to the toll-free phone banks for her clients.

"I always ask for a supervisor right off so I don't have to tell my story three or four times," she says. "But the wait times can be unbelievable."

Brooks says the biggest problem is not being able to obtain the information you need. "The service reps call up what they can on a computer screen and if it's not right in front of them they can't help you. It's more of a 'what can I do for you right now' situation."

Write it down
If you do make calls to the customer service line, keep a log. Write down the date and time you called, the employee's name, title and what they told you. File it with your other paperwork for that account.

After a phone call, write a letter confirming the conversation.

"Always follow up a phone call with a letter," says Nancy Nauser, president of the Consumer Credit Counseling Service of Greater Kansas City and Mid-Missouri. "You truly must communicate very clearly with creditors because things fall through the cracks."

Once you've done your part, the burden of proof lies with the creditor, who has 30 days to acknowledge your complaint in writing, unless the problem has been resolved. If not, they have two billing cycles, or no more than 90 days, to investigate and tell you their findings.

"At this point in the procedure, the card company usually will have fixed most errors," says Strong.

If not, it's time to write that letter to the bank president, the franchising organization -- such as Visa or MasterCard -- or federal regulators.

"Keep going up the chain of command until you get satisfaction," says Nauser. "It gets harder, but you need to be tenacious."

-- Updated: Nov. 20, 2002