Credit Card Watch

Credit – Limited Furnishing Part 2

There are many ways for a cardholder to dispute a bill. Among the best is to contest the way the creditor calculated interest after raising the interest rate. Often credit card issuers will not respond to a billing error dispute properly, and such failure could potentially open up an FCBA claim. And if after filing such a dispute, a consumer learns that the creditor hasn’t complied with the FCBA reporting requirements, he or she may then file a formal reinvestigation with the credit reporting agencies disputing the information furnished by a creditor. In response to this, a creditor may affirm the reporting as accurate, which is a violation of the FCRA and opens up liability. Any failure on the creditor’s part to report accurately can also be used as leverage in negotiating. (Although it may seem as if disputing directly with the bureaus in the first place would be the best recourse, by disputing with the creditors in this manner, a consumer can head off adverse reporting before it ever begins, while possibly setting up a scenario where the creditor-furnisher has broken the law. They usually do.)

Charge-Backs

Under the FCBA, when a consumer contacts his or her credit card issuer to dispute the amount a merchant has charged, the cardholder may withhold payment of the amount in question until the issue is resolved. However, for this to be allowed, the cardholder must have attempted to resolve the dispute with the merchant directly. Also, the amount must exceed $50, and the purchase must have been made within the consumer’s state or 100 miles from his or her residence. If the cardholder pays the amount in dispute, then the right to dispute is lost. While a charge is in dispute, interest cannot accrue on the disputed amount.

Once the consumer notifies the credit card issuer of the disputed charge, the creditor may not report the disputed amount as delinquent until the dispute is settled or a judgment is rendered, though it may report the amount as in dispute. The creditor can continue to collect on the disputed amount, including pursuing legal remedies, but the consumer can raise misconduct on the part of the merchant as a defense. This dispute process is often known as a charge-back, and the card issuer will often side with the consumer and simply hold the merchant accountable for all or part of the amount in dispute.

Consumers are not responsible for any unauthorized or fraudulent charges to their credit cards for any amount exceeding $50.