The main benefit as for why I always use a credit card, wherever possible, is because of the option it provides of disputing a charge. It gives me an unexchangeable feeling of security that I will never give up.
People often think that a charge can only be disputed within 60 days. It’s not true. Though there is some sense behind mistakenly thinking so. Let me explain everything in detail.
The differences between disputes and chargebacks
Before we get started, it is important to note that there are two types of ways you can initiate a credit card dispute:
- Disputing a charge using the Fair Credit Billing Act
- Disputing a charge using the Chargebacks laws
The terms dispute and chargebacks are often used interchangeably, but they are not the same thing and have different rules and guidelines, as you will see below.
Your right to dispute a credit card charge under the Fair Credit Billing Act (“FCBA”)
The FCBA gives consumers the right to dispute billing errors on any credit card for the following reasons:
- Unauthorized charges
- Charges that list the wrong date or amount
- Charges for goods and services you didn’t accept or that weren’t delivered as agreed
- Math errors
- Failure to post payments and other credits, such as returned items
- Failure to send bills to your current address (assuming the creditor has your change of address, in writing, at least 20 days before the billing period ends)
- Charges for which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification
Your right to dispute a charge under Chargeback laws
Once we explained to you everything about FCBA disputes, let’s now dive into chargebacks.
The simple definition of a chargeback is a cardholder asking the merchant to give back the money paid (it’s similar to a dispute, but under the book of law, it is not exactly the same thing). This is a right you have under Regulation Z of the Truth in Lending Act, Article 4 of the Uniform Commercial Code.
Each of the major credit card companies have their own chargeback policies.
It is important to note that most credit card disputes result in a chargeback automatically, but if you do not follow the steps above when disputing the charge (for example, sending the dispute in writing), then you will not have the legal protection under the FCBA.
Chargeback timeframes for each credit card issuer
Visa and Mastercard chargeback timeframes
Customers generally have 120 days from the transaction processing date to file a chargeback with their issuing bank when the reasons for the chargeback include:
- Incorrect purchase amount
- Duplicate charge
- Canceled recurring transactions
Cardholders have just 75 days to file a dispute for
- Unauthorized charges
Cardholders have 540 days to file a chargeback for disputes relating to
- Services not provided
- Merchandise not received, or received not as described, or defective merchandise
Amex chargeback timeframes
With Amex, you have a minimum of 120 days with the exception of disputes for the following reasons – which can be disputed a bit longer (Amex does not specify by how much beyond the 120 days its extended so they have the discretion to extend it based on the circumstances for however long they think is justified).
- Goods/services not received
- Goods/services returned/canceled, redisputes
Although the company recommends cardholders file a dispute within 120 days of the purchase, Discover does not impose a strict time limit, and disputes will be considered at any time.
So in reality, you may have much longer than 60 days to dispute a charge. As noted above, the exact time frame depends on each credit card issuers’ chargeback policies. It’s definitely better to dispute a charge before 60 days in order to be protected under the FCBA as well. But even if you missed the 60 day timeframe, you usually still have a whole lot of time to successfully dispute the charge under chargeback guidelines.