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June 10, 2009

5 steps to dispute credit card charge has an informative article about how to dispute an erroneous credit card charge. Here are the five steps they recommend:

"1. Gather information. Collect data to explain specifically why you are disputing the charge. Is the amount incorrect? Is the charge for a purchase you did not receive? Or is the merchant unknown to you? Collect receipts, warranties or any other paperwork that supports the case.

2. Contact the merchant. If a server misread a tip amount or a store charged another customer's purchase to the card, many businesses are willing to correct the charge themselves. This solution is fastest and easiest.

3. Turn to the credit card issuer. When a merchant cannot or will not correct a transaction, the credit card issuer can help. Under the Fair Credit Billing Act (FCBA) [a sister act to the Fair Credit Reporting Act], customers must notify the credit card issuer that they are disputing a transaction within 60 days of the error. Notify the card issuer in writing to protect your legal rights, with a letter such as this sample dispute letter. (But to report unauthorized use, calling is acceptable -- and prudent, in order to stop potential fraud quickly.) Send correspondence via certified mail to obtain proof of delivery. The credit card company is legally required to correct the billing error within 90 days of receiving the written notice.

4. Know the rules. The FCBA only applies to revolving accounts without a set balance, such as credit cards. Installment loans -- such as loans to purchase a car or appliances -- do not qualify. Laws limit consumers' liability for unauthorized credit card use to $50, but most banks do not hold cardholders responsible for that amount. While a charge is being disputed, the customer does not need to pay the contested amount or interest that accrues on the charge. He or she must, however, pay for other charges and related interest as usual. If the dispute is denied, the credit card company can charge interest back to the dispute date, in addition to the charge itself.

5. Take serious action. If the dispute is denied, and you believe the decision is unfair, you have the option of filing a complaint with your state attorney general or the Federal Trade Commission. You also could file a lawsuit, but legal cases can be long and expensive. If you choose this route, consider seeking an attorney who will accept awarded damages as payment, in the event the case is longer and costlier than you anticipate."

The lawsuit number 5 talks about would most likely be brought pursuant to the Fair Credit Billing Act. However, erroneous credit card charges can also eventually make their way to your credit report, which could also lead to a lawsuit under the Fair Credit Reporting Act. Make sure you document everything, not only the proof you are sending to the credit card company, but also document each oral conversation and written communication you have with the credit card company and/or the credit bureau. Doing this makes your lawsuit much more likely to end in a good result for you.

The whole article can be found at

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