How To Contest Invalid Credit Card Charges

Exercising Your Rights is Not Automatic

Girl showing card

Anyone with access to your credit card information can process charges against your account. However, you are not defenseless against this type of theft. There are Federal statutes that lay out specific guidelines for both the company that prepares your credit card statement, and for how you go about contesting invalid or incorrect charges.

The process is not automatic. You have to (1) identify invalid or incorrect charges on your statement and then (2) contest the bogus charges in writing within a specific timeframe. Instructions for contesting charges must be printed on your credit card statement. These instructions are typically on the back of your statement where your billing rights are explained.

  1. You must write a letter. This does not include an email. I've seen credit card sites where charges can be contested directly from the site by sending an email or filling in a form. Until the law is changed to specifically include either "a letter or an email," I recommend you protect your rights by sticking with snail mail.
  2. Write your letter as soon as possible after you receive your credit card statement. The contesting letter must be received no later than 60 days after you were sent the first bill on which the error or problem appeared. That means the postmark date on your letter may not be considered when determining whether or not you met the 60 day requirement. The letter should, therefore, be physically received by the company that prepared your statement within 60 days from the statement date.
  3. Include the required information in your letter. You must clearly identify yourself, your account, the charge in question and why you feel the charge is in error. Include any information that may be helpful to the person who investigates your complaint. Here is an excerpt from the "Billing Rights Summary" on the back of a statement from one of my credit cards that explains what to include in a contesting letter.

    "In your letter, give us the following information:

    • Your name and account number.
    • The dollar amount of the suspected error.
    • Describe the error and explain, if you can, why you believe there is an error."
  4. Select the address where you send your letter carefully. If you use the wrong address, it could take months for your letter to get forwarded to the correct destination, possibly negating your billing rights. On the front of one of my credit card statements I found three mailing addresses. There is the address for mailing payments, a return address on the payment stub that appears to be for window envelopes, and a customer service address under the caption "Please Direct Written Inquiries to." I noted that the customer service address, the address that must be used for contesting letters, is not after the phrase "Send Inquiries To" as stated in the billing rights summary on the back of my statement.

    (If you receive your statements electronically, finding your billing rights information on the web site of the company that sends you your statement may not be as easy as turning over a piece of paper. The information, however, must be available. Keep looking until you find it.)

  5. Do not pay the contested amount. You do not have to pay any amount in question while the credit card company is investigating your complaint. You are, however, still obligated to pay the parts of your bill that are not in question. While the credit card company investigates your question, you cannot be reported as delinquent, nor may any action be taken to collect the amount in question.

One aspect of the contesting process that is normally not covered in billing rights summaries on the back of credit card statements is how you will find out the results of any investigations. I've written many contesting letters and it is my experience that you will receive a letter notifying you of the investigation results. If the credit card company agrees with you that the charge is bogus, they will remove that charge from your account. If the decision is not in your favor, be aware that interest on the contested charge will probably start to accrue as soon as the credit card company sends you their decision.


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