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Billing Error Dispute (Credit Card Chargeback)

The federal procedure for disputing a charge on a credit card statement - a written process with deadlines on both sides that the card issuer must follow, not a courtesy it may offer.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

When a credit card statement shows a charge you did not make, an amount that is wrong, goods that never arrived, or a payment that was not credited, federal law gives you a formal dispute procedure. You send the card issuer a written notice - to the address it designates for billing errors, not merely by calling - identifying the account, the charge and why you believe it is wrong. From that point the issuer is bound by a timetable set by statute: it must acknowledge the dispute, investigate, and either correct the error or explain in writing why it believes the bill is right.

While the dispute is pending the issuer may not collect the disputed amount or the interest on it, may not report it as delinquent, and may not close the account because of the dispute. What is commonly called a "chargeback" is the card network's own version of this process; the statutory right is what stands behind it and what applies when the issuer does not cooperate.

A separate provision of the same law lets a cardholder raise against the card issuer the same claims and defences they would have against the merchant - for defective goods, say - within limits on the amount and the location of the purchase, and only after a good-faith attempt to resolve the problem with the merchant. The dispute process and this "claims and defences" right are different tools, and the notice window that starts the first is short and fixed.

Where this comes from

The billing-error procedure is the Fair Credit Billing Act, 15 U.S.C. § 1666, implemented at 12 C.F.R. § 1026.13; the right to assert claims and defences against the card issuer is 15 U.S.C. § 1666i and 12 C.F.R. § 1026.12(c). Both set the notice windows, the issuer's deadlines and the dollar and distance limits, and both apply to credit cards; debit-card errors are governed by a different statute, the Electronic Fund Transfer Act, 15 U.S.C. § 1693f.

When people hire a lawyer for this

Most disputes resolve without a lawyer if the notice is written, sent to the right address and sent inside the window. The situations that justify advice are an issuer that has ignored the procedure and reported the disputed amount as late, a large purchase the merchant will not make good on, and any dispute that has crossed into a damaged credit report - where the remedies under this statute and the Fair Credit Reporting Act combine.

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.

If you cannot afford a lawyer, civil legal aid programmes provide free help with many of these problems: civil legal aid programmes by state.

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