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Indiana Department of Financial Institutions

DFI > Education > Education Information > Credit Information > Credit Cards > Credit Card Disputes Credit Card Disputes

Unauthorized Use

There are two types of credit card disputes which commonly arise. The first involves unauthorized use of your card, when someone steals, borrows, or otherwise uses your card or card number without permission.

Under the law, your obligation for unauthorized use of your credit card is limited to $50. This means that if someone steals your card, for example, your credit card lender can charge you a maximum of $50 no matter how much the thief has charged on your card. (This limit may not apply to a "debit" card.)

As soon as you know of the unauthorized use of your credit card, you should call the lender to make a report. If you call before unauthorized charges are incurred, you cannot be charged even $50, since the lender can take steps to cancel your card and send you a new one. If a charge unexpectedly appears on your bill for something you did not authorize, you can also use your right to dispute the charge which is discussed below.

Disputes on How Much You Owe

The second type of billing dispute which arises involves disputes about how much you owe. A merchant may have overcharged you on the card, charged you for products or work you did not receive, or may process a transaction in error.

The law provides a basis to dispute these incorrect bills. Information about how to raise a dispute appears on the back of each bill - including the mailing address to use. In summary, you must raise a dispute in writing within sixty days of the first bill with the improper charge. You must include the following information:

  • Your name and account number
  • The dollar amount you dispute and information as to when it was charged and the name of the merchant.
  • A statement of the reason for your dispute.

Some examples of reasons for dispute are:

  • I did not authorize this charge
  • I did not receive the goods I ordered.
  • I returned the goods I ordered because they were defective, but did not get a credit.
  • The merchant sent me the wrong goods.
  • The merchant did not complete the services I contracted for or performed them incompletely.
  • The merchant billed me for $100 when I agreed to pay $10.
  • The merchant double billed me.
  • I cancelled the contract with the merchant or contractor before the work was performed.

Problems With the Quality of Goods or Services

If you have problems with the quality of the goods or services you purchased, your dispute rights also apply to these purchases on credit cards. These apply whenever the credit card lender owns the business from which you made the purchase or advertises the goods or services you purchased. In addition, this special right applies when the goods cost more than $50 and are purchased in your home state or within 100 miles of your mailing address. In order to dispute a charge for goods or services based on quality, you must have first made a good faith effort to resolve the issue with the merchant directly.

Written evidence of your good faith effort is helpful in this circumstance. For example, enclose a letter which you wrote directly to the merchant to outline your problem with the quality of the goods.

Sample Credit Card Dispute Letter

(Date)

(Your Name
Street Address
City, State, Zip Code)

Credit Card Name
Street Address
City, State, Zip Code

(The actual address you need to use appears on the back of the credit card bill you are disputing in a section called "billing rights summary.")

My name is (Your name). My account number is (Your account number). I am disputing a charge on the bill you mailed on (Date of Billing Statement). That bill includes a charge in the amount of $(Amount disputed) to (Name of Merchant). This amount is in error (or other error).

(State reason for dispute)

I have contacted (Name of Merchant) by telephone, in person, and by the enclosed letter in order to try to resolve the dispute. They have not agreed to withdraw the charge.

Please investigate this dispute and provide me with a written statement of the outcome. Thank you for your time and attention to this matter.

Yours truly,

(Your name)

What Happens Next?

Once you have raised a dispute, the credit card company is required to investigate and report back to you in writing. In many cases, the charge will be canceled. Often a merchant whose billing is challenged will back off rather than risk losing the privilege of accepting business by credit card.

Interest associated with a successfully disputed debt must also be cancelled. Until the dispute is resolved, you need not pay the disputed portion of your bill. However, you must make a payment to cover any undisputed amount. Of course, the credit card issuer cannot report you as delinquent with respect to the disputed amount, but may do so if part of your debt is undisputed and you do not make the necessary payments.

See Web Site for Information on Fair Credit Billing.

Credit Card Disputes Brochure