How to Dispute a Billing Error on Your Debit or Credit Card Statement

Here's what to do if you find an error on your ATM, debit, orcredit card statement.

Once in a while, you may find an error on your ATM, debit, credit, or charge card statement. Know your rights and obligations if you discover an error. If you don't act quickly, you may lose the right to challenge the error.

Errors on ATM Statements and Debit Card Receipts

Notify the company within 60 days. If you find an error on an ATM statement or debit receipt, you have 60 days from the date of the statement or receipt to notify the bank. Always notify by phone first and follow up with a letter. If you don't notify the bank within 60 days, it has no obligation to respond which means you're probably out of luck.

The bank must respond in a timely manner. If you notify the bank of the error within 60 days, it has ten business days to investigate the problem and inform you of the result. If the bank needs more time, it can take up to 45 days, but only if it deposits the amount of money in dispute into your account. If the bank later determines that there was no error, it can take the money back after it sends you a written explanation.

Billing Errors on Credit or Charge Card Statements

Notify the company within 60 days. You must notify the credit or charge card company of any billing errors within 60 days from the date of the first statement where the error appeared. Otherwise, the credit or charge card company has no obligation to investigate or respond. Notify the company in writing and enclose copies of supporting documents, such as receipts showing the correct amount of the charge.

Types of "billing" errors. The procedures apply only to billing errors, which include:

• unauthorized charges
• charges listing the wrong date or amount
• charges for goods and services you didn't accept or weren't delivered as agreed
• math errors
• failure to post payments and other credits, such as returns
• failure to send bills to your current address - provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends, and
• charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.

The credit card company must respond in a timely manner. The credit or charge card company must acknowledge receipt of your letter within 30 days, unless it corrects the bill within that time. Then, within two billing cycles (but not more than 90 days), the company must either correct the error or explain why it believes the amount on the statement is correct. If the company does not comply with these time limits, it forfeits up to $50 of any amount you might owe. In California, if the company doesn't comply with the 90-day limit, you don't have to pay any portion of the disputed balance.

What happens to the charge during the investigation? During the two-billing-cycle/90-day period, the credit or charge card company cannot report the amount as delinquent to a credit bureau or other creditors. But it can apply the disputed amount to your credit limit and charge interest on the amount. Of course, if the company later agrees that you were correct, it must drop these interest charges.

If the company doesn't remove the disputed charge, send another letter. If the company sends you an explanation but doesn't correct the error, and you are not satisfied, you have ten days to send another letter explaining why you still refuse to pay. If the company then reports your account as delinquent, it must also report that you believe you don't owe the money.

For more on credit and debit cards, as well as other information you need to restore your finances to good health, read Solve Your Money Troubles: Debt, Credit & Bankruptcy, by Robin Leonard with attorney Margaret Reiter (Nolo).