One of the benefits of paying with credit cards is that you have the option to dispute transactions when necessary. You're expected to try sorting the issue out with the merchant first (unless it's fraud). But if that doesn't work, you can file a dispute and attempt to get your money back.
This can protect you in all kinds of situations. If you were billed for a service you canceled, such as a gym membership, you can dispute it. If a product you ordered arrives damaged, or doesn't arrive at all, you can dispute it.
When you dispute a charge, the card issuer will contact the merchant and investigate. If you have a valid dispute, and you provide enough information, the dispute will most likely end in your favor. However, there are situations where card issuers side with the merchant.
I have some firsthand experience in this situation, and I know how frustrating it can be. Whether you just lost a credit card dispute, or you're curious about what would happen, here's what to expect.
The charge goes back on your credit card
When you first dispute a transaction, your card issuer gives you a provisional credit for it. You don't need to pay that charge while the dispute's in process. If you win, then the provisional credit becomes a full reversal of the charge.
If you lose your dispute, then the charge goes back on your credit card bill. You'll be expected to pay it, just like any other transaction. Even if you don't think it's valid or that you should be required to pay it, you are. If you refuse, you'll be charged late fees, and the non-payment will negatively impact your credit score.
The card issuer will send you a letter explaining the decision
You'll receive this letter in the mail, and it will likely also be available online in your credit card account. The letter will explain why your card issuer found in the merchant's favor. For example, if you didn't receive a product you ordered, and the merchant provided tracking information that confirmed delivery to your address, the dispute may be closed in its favor for that reason.
You can take it further with an appeal or an official complaint
Losing a dispute isn't the outcome anyone hopes for. If you think you have a valid case, there are still a few options available to you.
The first option to pursue is filing an appeal. Check with your card issuer about how to do this, and make sure to provide any further information or evidence you have to support your case. Sometimes, explaining your side better and sending more evidence, can get your card issuer to decide in your favor.
You could also file a complaint with a consumer protection agency. Here are a few options:
- Consumer Financial Protection Bureau (CFPB)
- Federal Trade Commission (FTC)
- Your state's consumer protection agency
You'd be surprised at how effective a complaint to the right agency can be. I once lost a $582 credit card dispute for a Booking.com rental, where the home was nothing like the pictures or description. During the dispute process, I offered to send my photo and video evidence, but a Chase representative told me that they didn't use that type of evidence.
That turned out to be incorrect, and by the time I found out I could provide evidence, it was too late to do anything. So, I filed a CFPB complaint. Chase reviewed the call recordings, learned that I had received incorrect information, and credited me the full $582. Consumer protection agencies are no joke, and businesses do follow up regarding these complaints.
Winning your credit card dispute the first time around
You can appeal a dispute if you lose, but ideally, you won't need to do that. Here's how to give yourself the best chance of a successful dispute:
- Contact the merchant first. Unless it's a fraudulent transaction, you're expected to try working it out with the business. If you and the merchant can't come to an agreement, that's when you can file a dispute.
- Make sure you have a valid claim. There are lots of reasons you can file a dispute, including billing errors, quality issues, and unfulfilled orders. But some situations don't qualify. For example, if you only have buyer's remorse, you're unlikely to be successful with a dispute.
- Gather evidence. Look for any evidence you can find to support your case. Let's say you rent an apartment that's nothing like the listing. Take screenshots of the listing, and take pictures of the rental you received to demonstrate the difference.
- Provide all your information and evidence when you file the dispute. It's better to give your card issuer all of this from the beginning. You don't want to end up going through an appeal because your card issuer didn't fully understand the issue or think that you provided sufficient proof of your claim. If you have trouble doing this online, call the number on the back of your card and submit your dispute by phone.
Disputing a credit card charge isn't something most people need to do too often, so you may not be familiar with the process. If you do all of the above, the odds will be in your favor.
