Disputing a Billing Error on Your Debit or Credit Card Statement

People who use debit and credit cards are likely to eventually experience a credit or debit billing issue.

Once in a while, you might find an error on your ATM, debit, or credit card statement. If you don't act quickly, you could lose the right to challenge the error. (If your ATM, debit, or credit card has been lost or stolen, read Your Liability for Unauthorized Credit and Debit Card Charges.)

Know your rights and obligations if you discover a mistake.

Errors on ATM Statements and Debit Card Receipts

If you find an error on an ATM statement or debit receipt, and your physical debit card itself is not lost or stolen, you have 60 days from the financial institution's transmittal of the statement to notify the bank. Always notify by phone first and follow up with a letter. If you don't notify the bank within 60 days, it has no obligation to respond—which means you're probably out of luck.

If you notify the bank of the error within 60 days, it has ten business days (20 business days for new accounts) to investigate the problem and inform you of the result. If the bank needs more time, it can take up to 45 days or 90 days in some cases.

Billing Errors on Credit Card Statements

You must notify the credit card company of any billing error no later than 60 days after it transmitted the first statement that reflects the alleged error. Otherwise, the credit card company has no obligation to investigate or respond. (With another type of dispute process—the “Claims and Defenses” Process—you get a year to dispute the charges. For more information, read Can I Withhold a Credit Card Payment if I Have a Dispute With a Seller?)

Notify the company in writing by sending a letter (or going online, if available) and enclose copies of supporting documents, like receipts showing the correct amount of the charge. Be sure you send your letter to the address designated for this purpose—look on your statement, your credit card agreement, or online to get the proper address.

Types of Billing Errors

The procedures apply only to billing errors, which include:

  • a charge that is not clearly identified on your bill
  • a math error
  • a charge for which you need more information
  • the company's failure to mail you a periodic statement
  • a charge by someone who was not authorized to use your card
  • a charge for property or services that were never delivered to you
  • the company's failure to credit your account properly, and
  • a charge for items you returned because they were defective or different from what you ordered.

The credit card company must respond in a timely manner. The credit card company must acknowledge receipt of your letter within 30 days, unless it corrects the bill within that time. Then, within two billing cycles (but not more than 90 days), the company must either correct the error or explain why it believes the amount on the statement is correct. If the company does not comply with these time limits, it forfeits up to $50 of any amount you might owe.

What happens to the charge during the investigation? During the two-billing-cycle/90-day period, the credit card company cannot report the amount as delinquent to a credit bureau or other creditors. But it can apply the disputed amount to your credit limit and charge interest on the amount. Of course, if the company later agrees that you were correct, it must drop these interest charges.

If the company doesn't remove the disputed charge, send another letter. If the company sends you an explanation but doesn't correct the error, and you are not satisfied, you have ten days to send another letter explaining why you still refuse to pay. If the company then reports your account as delinquent, it must also report that you believe you don't owe the money.

For more on credit and debit cards, as well as other information you need to restore your finances to good health, read Solve Your Money Troubles: Debt, Credit & Bankruptcy, by Amy Loftsgordon and Cara O'Neill (Nolo).

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