Credit Card Disputes: Know Your Rights and Obligations

One of the benefits of paying for goods and services by credit card is having the ability, under certain circumstances, to dispute a charge. Consumers who are not satisfied with a product or service can contact their credit card company regarding the possibility of having the item credited back to their accounts. MasterCard and Visa have regulations that govern credit card disputes between cardholders and merchants. By understanding their rights and obligations, consumers can avoid certain types of billing disputes and know what to expect if they find themselves in a merchant dispute.

Time Frames

Credit card 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

Consumers should make sure they understand what they are agreeing to whenever they give a merchant their credit card 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, these 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

Bank card regulations are very specific about the rights and responsibilities of both merchants and cardholders. 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 before the buyer can know whether it works properly. Cardholders should make sure they know the merchant’s return policy before completing the process.

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

Travelers who 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 can be charged for the first night’s stay. When canceling a reservation, always ask for a cancellation number from the hotel. A cardholder whose request for a cancellation number is refused can make that part of a formal credit card dispute. Visa cardholders who find their rooms in an unsatisfactory state and notify the hotel within a half-hour of checking in can have the charge credited back.

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. Hotels can bill for telephone calls or room service orders that were not accounted for at the time the customer checked out, while a car rental agency that is docked for an unpaid parking violation can bill it to the appropriate customer. Damages to property cannot be charged without providing a separate sales slip specifically for those charges.

And Closer to Home

Car repairs are a frequent source of credit card 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 another 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 performed improperly. However, cardholders who can’t meet these conditions should still contact their credit card company, which may use a different approach to try to resolve the complaint with the merchant.

How a particular dispute is resolved depends on a number of factors. 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.

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