Disputing a credit card charge: how chargebacks work and the deadlines that matter

What counts as a billing error

The billing-error process comes from the Fair Credit Billing Act, implemented in Regulation Z. The FTC says it covers billing errors on credit cards and other revolving credit, not installment loans such as car loans. [1] Regulation Z lists the error types, including charges not made by you or anyone with authority to use your account, charges for property or services you did not accept or that were not delivered as agreed, payments not credited properly, and computational errors by the creditor. [3]

A charge you authorized for something that turned out to be poor quality is usually not a billing error. The CFPB notes you may have to go through a different dispute process for goods or services that turn out to be defective. [2] That separate process is covered below. You may hear a reversal called a chargeback; the legal rights described here come from the regulation, whatever name the issuer uses for the process.

The deadlines, side by side

Most failed disputes fail on timing. The 60-day clock starts when the issuer sent the first statement showing the error, not when you noticed it. Regulation Z says no later than 60 days after the creditor transmitted the first periodic statement that reflects the alleged billing error; [3] the FTC tells you to send your letter so it reaches the issuer within 60 days after the first bill with the error was sent to you. [1] Calling the issuer is a good first step, and the CFPB recommends it, [2] but the written notice is what triggers the legal protections.

Step by step: filing a billing-error dispute

Step 1: call the card company and tell them about the problem right away. [2] Step 2: write the notice. The FTC says to use the address given for billing inquiries, not the address for sending payments, and to include your name, address, account number and a description of the error. [1] Regulation Z adds that the notice should, to the extent possible, state the type, date and amount of the error and why you believe it is an error. [3]

Step 3: send it so you can prove delivery. The FTC recommends certified mail with a return receipt, copies rather than originals of supporting documents, and keeping a copy of your letter. [1] The CFPB suggests keeping copies of everything and recording the dates of follow-up calls in one file. [2]

Step 4: watch the clock. If the issuer agrees, the CFPB says the charge must be removed; if it disagrees, it must explain why in writing, state how much you owe and give your payment due date. [2] If you still disagree, the FTC says to refuse payment in writing within the payment period or 10 days of the explanation, whichever is later, and that you can file a complaint with the CFPB. [1]

Your rights while the dispute is open

Regulation Z says you need not pay, and the creditor may not try to collect, the disputed amount and related finance charges while the dispute is pending, and the creditor may not make or threaten an adverse credit report about it. [3] The FTC adds that the issuer cannot sue to collect the disputed amount or close or restrict your account over it, though it may count the disputed amount against your credit limit. You still have to pay the undisputed part of the bill. [1]

If you already paid the charge, you can still dispute it, but the CFPB warns you probably will not get the money back until the issuer has decided you were right. [2] If the issuer skips the required procedures, the FTC says it forfeits up to $50 of the amount it could otherwise collect, even if the bill turns out to be correct. [1] After the process ends, if you still refuse to pay and the issuer reports you as delinquent, the FTC says the report must also state that you dispute the bill. [1]

Quality-of-goods disputes: a separate right with conditions

When you accepted the item but it is defective or the service was poor, Regulation Z gives a separate right to assert claims and defenses against the card issuer. The conditions: you made a good-faith attempt to resolve the dispute with the merchant, the purchase exceeded $50, and it took place in the same state as your current designated address or within 100 miles of it. [4] The FTC notes that if the seller is also the card issuer, the dollar and distance limits do not apply. [1]

The amount you can assert is capped at the credit still outstanding for that purchase when you first notify the issuer. [4] In practice that means acting before you pay the item off. Worked example: a $640 furniture order arrives damaged, the store refuses a repair, and you notify the issuer when $640 is still unpaid on the card. Your claim can cover up to $640. If you had paid the statement in full before notifying, the outstanding credit for that purchase could be zero.

Debit cards follow different rules

Debit and ATM card errors are covered by the Electronic Fund Transfer Act and Regulation E, not the Fair Credit Billing Act. Your notice must be received no later than 60 days after the bank sends the statement where the error first appears. The bank must investigate within 10 business days, or may take up to 45 days if it provisionally credits your account for the disputed amount within those 10 business days, and must report results within three business days of finishing. [5]

The bigger difference is liability for theft. The FTC sets out the tiers: a credit card caps your liability for unauthorized use at $50, and you owe nothing if only the number, not the card, was stolen. For a debit card, liability is $0 if reported before any use, up to $50 within two business days of learning of the loss, up to $500 after that but within 60 days of the statement, and potentially all the money taken after 60 days. [6] During a debit dispute it is your cash that is missing, not the bank's credit.

Dispute letter checklist

If the dispute involves a charge you think is fraud, also review whether a credit freeze or fraud alert makes sense; our guide on that choice explains the difference.

• Address: the billing-inquiries address on your statement, not the payment address. [1]
• Your name, address and account number. [1]
• The charge: merchant, date and exact amount, and which statement it first appeared on. [3]
• The error type (unauthorized, not delivered, wrong amount, payment not credited) and why you believe it is wrong. [3]
• Copies, not originals, of receipts, order confirmations, delivery tracking or cancellation emails. [1]
• The date you called the issuer and the name or reference you were given. [2]
• For a quality claim: a short record of your attempt to resolve it with the merchant. [4]
• Send by certified mail with return receipt, and keep a copy of everything. [1]
• Calendar reminders: day 30 for the acknowledgment, day 90 as the outer limit for resolution. [3]