Don’t Recognize Charges on Your Card Statement? What to Do Next

It’s a routine part of life: You dip into your wallet, pull out a credit card and make a transaction. The majority of the time, everything proceeds smoothly, but occasionally you may need to dispute a charge.

Perhaps your card was charged more than it should have been, or the item you purchased online never arrived. When this happens, the law has your back. The federal Fair Credit Billing Act has outlined the rules for disputing charges, and if you follow them, you will likely get your money back.

“Most credit card disputes are handled quickly and efficiently,” says Gerri Detweiler, a credit expert and author who blogs about credit issues at her website, gerridetweiler.com.

“As long as you meet requirements, you won’t have to pay the charge,” she adds. “However, you may need to return the item.”

Here’s how the dispute process works and what you can do to make sure it goes as smoothly as possible.

You might dispute a credit card charge for many reasons. Unrecognized purchases that appear on a credit card statement are among the most common, says Todd Christensen, accredited financial counselor and education manager for Debt Reduction Services, a nonprofit credit counseling agency.

“These often turn out to be fraudulent transactions that appear on a consumer’s account, but they can also involve simple billing errors by the creditor,” Christensen says.

Other common errors, according to the Federal Trade Commission, might include when you don’t receive a refund after you have returned an item, or you are billed:

In all of these situations, you can dispute the charges with your credit card company. You can even dispute the charge if you receive an item and it is not what you expected.

“It’s especially helpful when you buy something online and the seller’s description doesn’t match what you receive, or even if it arrives later than promised,” Detweiler says.

If you plan to dispute a charge, the Consumer Financial Protection Bureau suggests promptly calling your credit card company to begin the process. You have a right to dispute the charge, but only if you do so quickly.

Federal law states that you must send a written notice of the billing error to your credit card company within 60 calendar days of the charge appearing on your statement.

“Credit card issuers make it easy to dispute a charge online, but you may want to dispute it in writing if the charge is for a large amount or you anticipate problems getting it resolved,” Detweiler says.

Writing a letter allows you to elaborate on the nature of the error, while disputing online tends to offer a limited drop-down menu of choices, she says.

You can dispute the charge even if you paid the bill, although you won’t likely get your money back until the credit card company has investigated the matter and found in your favor. If the investigation shows that you were in the right, the law states that the charge must be scrubbed from your bill.

One key to filing a successful dispute is to complete the process carefully. “Make sure you understand your card’s dispute policy,” Christensen says.

The letter to your credit card company disputing a charge should contain certain details, according to the FTC. Provide your name, address and account number, and note the:

“Include as many relevant facts and documents as possible,” Christensen says.

Avoid the temptation to include emotional complaints about the merchant, he adds. “Stick to the facts, and make sure you have them straight,” Christensen says.

Enclose copies of receipts or other documents that will help prove your case. Also, keep a copy of the dispute letter for your files, the FTC says.

Mail your letter promptly to the address your credit card company provides for billing inquiries, not payments.

“Send it by trackable mail,” Detweiler says, to confirm that the letter was delivered.

Your credit card company must acknowledge your letter in writing within 30 days of receipt. The company has to resolve the dispute within 90 days.

As the issuer investigates your complaint, you do not have to pay the disputed charge. However, you must pay any other charges on your bill that are not in question.

Don’t worry about the issuer taking reprisals against you for not paying the disputed charge. By law, the credit card company cannot take action against you, such as by closing your account, reporting you as delinquent or requiring you to pay the full bill immediately.

“Some consumers fear that disputing a credit card purchase might hurt their credit rating,” Christensen says. “It will not.”

Don’t make the mistake of assuming that disputing a charge means you will not have to pay it. When you dispute the charge, the credit card company will investigate the matter and render a verdict.

If the credit card company determines that you were not correct in filing the dispute, you will have to pay the bill. The issuer must explain its reasoning in writing and do so promptly.

The credit card company must give you a new payment due date, and you may owe the original amount and any finance charges. If your original bill contained a grace period, you must receive the same grace period for the new bill. As long as you pay within the time frame the issuer has established, you cannot be reported as delinquent.

You do not have to automatically accept the credit card company’s decision. If you disagree, you can:

Note that the issuer has the right to start collection procedures during this period. The issuer can also report your account as delinquent to the credit reporting agencies but must indicate that you are still disputing the charge.

Disputing a credit card charge can make sense in many situations, but the process has limitations.

Some consumers view the dispute process as a way to get their money back when they regret a purchase, Christensen says. These shoppers prefer to file a dispute rather than to use “a merchant’s unpleasant return or refund policy,” he says.

“Credit card disputes are not meant to replace the merchant’s return or refund policy,” Christensen says.

Instead, the consumer should first try to work with the merchant to get a refund, he says. Failing to take this step before filing a dispute will only leave “the consumer back at square one,” Christensen says.

The dispute process should not be used by those who simply have buyer’s remorse, Detweiler agrees.

“Don’t use it just to avoid paying for something you bought,” she says. “That increases costs for everyone overall.”

If you can’t resolve a problem with a product or service with the merchant, then it might be time to file a dispute.

“If you suspect a merchant isn’t acting in good faith or is trying to drag out a refund beyond the time you have to dispute the charge, you may want to submit a written dispute to protect your rights,” Detweiler says.