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Credit Cards

The clock is ticking: Here's how long you have to dispute a credit card charge

Finding an unauthorized credit card charge on your account can be a headache to resolve. Here's how long you have to dispute a credit card charge.

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Discovering an error on your credit card statement can be a big headache to resolve. Trust me: I'm currently working with Chase on a dispute where two of my linked credit cards on Amazon were charged for one purchase.

I called Chase to ask to have the erroneous charge removed, and the customer service representative informed me that I'm required to both dispute the charge over the phone and mail/fax proof that I used a card other than my Chase card to pay for the transaction.

All of this can be overwhelming, especially as time goes on. But if I don't handle it now, I could miss my chance for a refund.

Federal law only protects cardholders for a limited time — 60 days to be exact — after a fraudulent or incorrect charge has been made. Thankfully I noticed the billing error within a few days of it posting to my account and started the dispute process right away.

The next time you review your credit card statement, comb through it for any charges that seem out of place. If you notice a charge that isn’t familiar, confirm it’s inaccurate and dispute it.

Below, CNBC Select outlines the credit card dispute process for both billing errors and quality issues so you can get your money back as soon as possible.

How to dispute a credit card charge

There are two main types of credit card disputes: 1) billing errors and 2) complaints about the quality of goods and services. Here’s an overview of each type of issue, then a guide on how to dispute credit card charges.

Billing errors

Billing errors are one of the most common reasons why you’d want to initiate a dispute.

If you see a charge for a streaming service that you canceled or were charged for an online order that was never delivered, a dispute can help you get your money back.

The FTC provides these examples of billing errors:

  • Charges that list the wrong date or amount.
  • Charges for goods and services you didn't accept or that weren't delivered as agreed.
  • Math errors.
  • Failure to post payments and other credits, like returns.
  • Failure to send bills to your current address — assuming the creditor has your change of address, in writing, at least 20 days before the billing period ends.
  • Charges for which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification.

Unauthorized credit card transactions are a form of fraud and also considered a billing error, according to the FTC. So if someone steals your physical credit card or skims your virtual card number, you can dispute the transaction.

Quality of goods and services

Beyond billing errors, you may run into issues with the purchase of goods and services.

For instance, if you purchase a new mattress that comes ripped and the merchant doesn’t offer a repair or replacement, you'd have a case for a dispute. Or if you pay a deposit for a plumber to fix your sink and they don’t show and keep your money, this would also count.

The Fair Credit Billing Act (FCBA) has three requirements that must be met before you file a dispute about the quality of goods and services:

  • The purchase must exceed $50.
  • The transaction was made in your home state or within 100 miles of your current billing address
  • You made an effort to resolve the dispute with the merchant first.

How to initiate a dispute

In cases of billing errors, unauthorized purchases and issues with goods and services, the FCBA caps the amount you're responsible to pay at $50. Many credit card issuers, like American Express and Chase, take the law a step further and provide cardholders with $0 fraud liability — so you won’t be held responsible for unauthorized transactions or issues with goods or services.

However, there’s a catch: you need to dispute charges within 60 days from when the purchase appeared on your statement. Since that’s a relatively small timeline, make sure you regularly review your credit card account for signs of billing errors. And if you have an issue with the quality of a purchase, act sooner rather than later.

In order to get your money back quickly, follow these five steps to dispute a credit card charge:

  1. Double check that the charge is actually incorrect. Make sure that the billing error is actually unauthorized and not a recurring charge or purchase you forgot about. And if you're not pleased with a good or service, double check the original product description or service contract to make sure the product/service truly failed to deliver what was promised.
  2. Gather supporting documents. Collect copies of receipts or other supporting documents, like your credit card statements, that can back up your dispute. You may need to submit these with your dispute.
  3. Work with the merchant. Before you file a dispute with your card issuer, try to resolve the issue with the merchant first. Explain the issue you have with the transaction, and send any supporting information to back up your cause. In many cases, the merchant will try to work with you on a solution to your issue. If they don’t help within a week, proceed with a dispute since the clock is ticking.
  4. Contact your card issuer. Many issuers allow you to submit a dispute online or via their mobile app, which makes the whole process a lot easier (it's one of the reasons I prefer my American Express® Gold Card). Depending on the reason for your dispute, you may be required to call. The FTC recommends you mail a letter to your card issuer’s billing department so you can get the dispute started. Include your name, address, account number, a description of the issue, and copies of supporting documents.
  5. Wait for a reply. While you await a reply, you won’t be required to pay the disputed amount or any interest or fees resulting to the dispute. Under the law, creditors must acknowledge your complaint in writing within 30 days of receiving it. Then expect to receive a written resolution within two billing cycles, and no later than 90 days, from the original date your creditor received the dispute.

If the dispute is approved, your creditor will explain the corrections that will be made to your account, such as removing the charge.

If your dispute was denied, you’ll receive an explanation why and notice of how much you owe, which may include interest and fees that accrued during the dispute process. You can write back to the creditor within 10 days after receiving the denial and say you refuse to pay the disputed amount and explain your reasoning why. But this may cause the bill to be sent to collections and a delinquent account appearing on your credit report. However, the creditor must attach a note that states you don’t think you owe the money.

Bottom line

Submitting a credit card dispute can help you fix incorrect charges on your account, but it’s essential to act fast. The sooner you dispute a billing error or issue with the quality of goods and services, the quicker you’ll receive a resolution.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.