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If you believe that a charge to your credit card is inaccurate or unauthorized, or if you have not received the goods or services you ordered, you may dispute such charges with your card issuer. If your dispute is rejected, can you simply take matters into your own hands and not pay the disputed amount?
Here’s what reader Bonnie is thinking about. She writes: “My credit card was charged for poor service. I spoke to the merchant about this and we couldn’t come to a decision. I disputed the charge with my credit card company who came back and told me they found the charge to be a valid charge. I have not made any payments on this charge at this time. I have never disputed a charge before and have an excellent credit score. I need help to find out what happens if I just refuse to pay a single dime on this charge. Thanks in advance for your help.”
Read all the answers from our credit card experts.
Ask Punculali a question.
After Your Creditor Rejected Your Credit Card Dispute
According to the Federal Trade Commission, disputes about the quality of goods and services are better resolved through a “claims and objections” process than through a dispute resolution process. The FTC advises, “If you have a problem with goods or services that you paid for with a credit or debit card, you can take the same legal action against the card issuer as you would under state law against the merchant.”
The Los Angeles County Department of Consumer and Business Affairs believes that if the dispute is about goods or services that are “misrepresented, defective, or not delivered,” you may use this “claims and objections” process. To file this claim, you must write to your credit card issuer informing them that the seller has not resolved your issue and that you are withholding payment of the amount in dispute until your issue is resolved. You can use this process if your claim meets certain conditions:
- The amount in dispute exceeds $50.
- The seller is located in the same state as you or within 100 miles of your billing address (this may not apply if buying online or by phone)
- You have already tried to solve the problem with the seller
- You have not paid the disputed amount
You must contact your card issuer with “claims and objections” within one year from the date of the first card statement containing the disputed payment. Send this letter by certified mail with all evidence to your issuer’s billing address, not the one you are sending payments to. Be sure to mention that you are involved in a “claims and objections” procedure and not in a regular dispute.
Consequences of delayed payment
If you disagree with the results of your card issuer’s dispute investigation, you must write to the creditor within 10 days of receiving their notice to tell them that you are not going to pay the disputed amount.
The creditor can then start foreclosure proceedings against you. If the issuer decides to report you as in arrears to the credit reporting agency, this should also indicate that you do not agree with the creditor and do not think you owe the money. The lender must also tell you which credit bureaus they have reported you to. And as soon as the offense is resolved, it must report it to the same parties.
bottom line
Bonnie, you can withhold payment of the amount in dispute while the creditor investigates the dispute. After that, your credit score may be damaged if you do not comply with contractual payment obligations. And your result will help you enjoy the fruits of consumerism in the American market. Even some landlords and potential employers base their decisions on your credit score.
If you qualify to take advantage of the process, you must file “claims and objections” with your creditor. You can also file a complaint with the Consumer Financial Protection Bureau and the FTC.
Contact me at pthangavelu@redventures.com if you have any credit card related questions.
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