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Federal law grants consumers several rights relating to their credit card transactions, against the card companies and in the case of a dispute with a merchant. This Financial Guide discusses these important rights in depth. Table of ContentsYou have numerous rights related to your use of a credit card. These include (1) prompt credit for payment, (2) refunds of credit balances, (3) resolution of errors, (4) removal of unauthorized charges, (5) resolution of disputes, (6) prompt shipment, (7) refusal of delivery, (8) withholding of payment in case of dispute, (9) protection against offensive junk mail/junk calls. Prompt Credit For PaymentA card issuer must credit your account on the day it receives your payment, unless the payment is not made according to the creditor's requirements or the delay in crediting to your account does not result in a charge.
Refunds Of Credit BalancesWhen you return merchandise or pay more than you owe, you have the option of keeping the credit balance on your account or requesting a refund (if the amount exceeds $1.00). To obtain a refund, write the card issuer. The card issuer must send you the refund within seven business days of receiving your request.
Resolution Of ErrorsThe Fair Credit Billing Act provides specific rules that the card issuer must follow for promptly correcting billing errors. The card issuer will give you a statement describing these rules when you open the credit card account and, after that, at least once a year. Many card issuers print a summary of your rights on each bill they send you. Billing errors include:
When you find an error you must notify the card issuer in writing within 60 days after the first bill containing the error was mailed to you. Some companies may accept e-mail; others will require that you put your dispute in writing. Be sure to include your name and account number, a description of the billing error and the date and amount of the charge you dispute.
During the period that the card issuer is investigating the error, you do not have to pay the amount in question. For further information visit Consumer Information.
Removal Of Unauthorized ChargesUnder the Truth in Lending Act, if your credit card is used without your authorization, you are only held liable for up to $50 per card. If you report the loss before the card is used, federal law says the card issuer cannot hold you responsible for any unauthorized charges. If a thief uses your card before you report it missing, the most you will owe for unauthorized charges is $50. This is true even if a thief is able to use your credit card at an automated teller machine (ATM) to access your credit card account. To minimize your liability, report the loss of your card as soon as possible. Most companies have toll-free numbers printed on their statements and 24-hour service to report lost or stolen cards.
Resolution Of DisputesIf you have a problem with merchandise or services that you charged to a credit card, and you have made a good faith effort to work out the problem with the seller, you have the right to withhold from the card issuer payment for the merchandise or services. Check with your credit card company regarding their policies. If you do not achieve satisfaction through the seller or credit card company, you can file a small claims court action-an informal legal proceeding that can be used to settle disputes. Check your local telephone book under your municipal, county, or state government headings for small claims court listings. In addition, you have the following rights: You have the right to have mail and phone order purchases shipped when promised, or to cancel for a full and prompt refund. If no shipping date is stated, your right to cancel begins 30 days after your order and payment are received by the merchant. If you cancel, the seller has one billing cycle to tell the card issuer to credit your account. There are two exceptions to the 30-day shipment rule: (1) If a company doesn't promise a shipping time, and you are applying for credit to pay for your purchase, the company has 50 days after receiving your order to ship. (2) Spaced deliveries, such as magazine subscriptions (except for first shipment); items that continue until you cancel (e.g. book or record clubs, etc.); C.O.D. (cash on delivery) orders; services; and seeds or growing plants are not covered. You have the right to a full refund--because of shipping delay--within seven working days (or one billing cycle) after the seller receives your request to cancel. You may refuse a delivery of damaged or spoiled items.
When you return merchandise or pay more than you owe, you have the option of keeping the credit balance on your account or requesting a refund (if the amount exceeds $1.00). To obtain a refund, write the card issuer. The card issuer must send you the refund within seven business days of receiving your request.
Prompt ShipmentYou have the right to have mail and phone order purchases shipped when promised, or to cancel for a full and prompt refund. If no shipping date is stated, your right to cancel begins 30 days after your order and payment are received by the merchant. You can choose to wait longer for your order, or cancel and get a prompt refund. If you cancel, and your order was paid by charge or credit card, the seller has one billing cycle to tell the card issuer to credit your account. There are two exceptions to the 30-day shipment rule: (1) If a company doesn't promise a shipping time, and you are applying for credit to pay for your purchase, the company has 50 days after receiving your order to ship. (2) Spaced deliveries, such as magazine subscriptions (except for first shipment); items which continue until you cancel (e.g. book or record clubs, etc.); C.O.D. (cash on delivery) orders; services; and seeds or growing plants are not covered. You have the right to a full refund-because of shipping delay-within seven working days (or one billing cycle) after the seller receives your request to cancel. Refusal Of DeliveryYou may refuse a delivery of damaged or spoiled items. Withholding Of Payment In Case Of DisputeYou need not pay a disputed amount while your dispute is being reviewed by the card issuer. If you receive something C.O.D., you have the right to stop payment on a check made out to a seller, but not one made out to the Post Office, if there is something wrong with the order.
Protection Against Offensive Junk Mail/Junk CallsYou have the right to tell commercial telephone and direct mail marketers to stop calling you. If you wish to have your name removed from telephone lists of marketing companies contact the federal Do Not Call Registry: National Do Not Call Registry Consumers who do not wish to receive promotional mail at home should contact: Direct Marketing Association If companies you now do business with also removes your name, you can contact them directly to have your name reinstated. If the marketer violates the do-not-call list, the first step is to file a complaint with the FTC (Federal Trade Commission). You can also file a lawsuit against the telemarketer, but only if there is a "pattern and practice" of violations. You also have to have suffered actual damages of more than $50,000 and be able to prove both of these things.
Government and Non-Profit AgenciesThe following agencies are responsible for enforcing federal laws that govern credit card transactions. Questions concerning a particular card issuer should be directed to the enforcement agency responsible for that issuer.
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