Handling Credit Card Disputes
One of the benefits of paying for goods and services by credit card is having
the ability, under certain circumstances, to dispute a charge. MasterCard and
Visa have regulations that govern disputes between cardholders and merchants,
and how a particular dispute is resolved depends on a number of factors. By understanding
your rights and obligations, you can avoid certain types of billing disputes
and know what to expect if you find yourself in a merchant dispute.
Disputes must be sent in writing to the credit card bank within 60 days of the
statement mailing date in which the disputed transaction appears.
It Pays to Read the Fine Print
Be sure to understand what you are agreeing to whenever you give a merchant your
account number. Some Internet sites, for example, offer free trials but require
users to provide a credit card number before entering. Though customers who are
later billed without their authorization can dispute the charge, online disclosures
sometimes require that the customer cancel the subscription before the end of
the trial period in order to avoid being billed.
Know the Return Policy
A cardholder who makes a charge in a retail establishment is responsible for
determining whether the merchandise is defective before leaving the store — even
if the item is packaged or needs to be plugged in. Make sure you know the
merchant's return policy before completing the transaction. When returning a
product that’s been ordered by mail or telephone, always request a signed return
receipt proving the merchant received the merchandise.
On the Road
If you reserve a hotel room with a credit card and then fail to cancel the reservation
according to the terms of the merchant's cancellation policy, you can be charged
for the first night's stay. When canceling a reservation, always ask for a cancellation
number from the hotel. If that request for a cancellation number is refused,
that can be part of the formal dispute.
Hotels, motels and car-rental agencies have the right to bill customers for items
that don't become apparent until after checkout or the close of the rental agreement.
These charges may include telephone calls or room-service orders that were not
accounted for when the customer checked out, or an unpaid parking violation on
a rental car. Damages to property cannot be charged without providing a separate
sales receipt specifically for those charges.
And Closer to Home
Car repairs are a frequent source of disputes. In most cases, a customer upset
over the quality of service can dispute the charge only if the repair shop is
located in the same state or within 100 miles of the cardholder's billing address.
In addition, the customer has to have offered the merchant the opportunity to
correct the problem, and must provide a written opinion from a second merchant
stating that the initial repair was either never completed, not necessary or
Credit card regulations are complex, and the situations described above are just
a few examples of the many kinds of disputes that can arise between cardholders
and merchants. Even if Visa or MasterCard regulations prevent a consumer’s credit
card issuer from charging an item back, a cardholder always has the same recourse
available to people who pay by cash or check — addressing the issue directly
with the merchant.