Finding a questionable or incorrect charge on a credit card statement probably happens to most New Yorkers at least once. Most people’s natural inclination is to call the creditor and try to work it out over the phone. If that doesn’t work, the law is on your side, but it’s a slow process involving the federal Fair Credit Billing Act (FCBA). Here’s what you need to do.
First, you will need to write the creditor asking for an explanation of the charges. In your letter, include your name, address, account number, a copy of the statement containing the error, and a concise explanation of your side of the story. Next, send this to the creditor within 30 days of receiving the notice. This may be one of those instances when using certified mail with a return receipt request is a good idea. That way you have proof that you sent the letter advising the creditor of the charge within the 30-day period.
Step three: Hang tight. Once the creditor has received your letter, it has a 30-day period off its own to respond in writing. If you receive a response that is not in writing, or it’s too late, then the creditor is in violation of the FCBA. In its letter, the creditor will explain the error, and it must remove all financial charges and late fees it added to your credit card bill in the meantime. Although, it is free to dispute the remaining charges. Keep the letter it sends you.
Finally, the creditor will investigate the charges, and you will continue paying all non-disputed and subsequent charges. If your creditor initiates collection proceedings on your account, freezes your assets, or threatens to report your non-payment of the disputed charge to a credit agency, it is in violation of the FCBA. The creditor has a 90-day limit to resolve the dispute after receiving your letter.
A few things can happen from here. If the creditor concludes that you are right and it is wrong, the charges will be removed from your bill and life will go back to normal. If it disagrees and thinks it’s correct, then it will send you a letter delineating its reasons. You are entitled to ask for documentation, but you will need to pay the amount, plus other charges incurred during the process.
You are still allowed to dispute the creditor’s findings from its investigation. You must send it a letter informing it of your reasons within 10 days of receiving its findings.