Financial experts suggest monitoring your financial statements periodically. You can dispute unauthorized credit card charges if you catch questionable or fraudulent activity. But what if you accidentally dispute a charge you made yourself? Can you go to jail for disputing charges? Keep reading to learn about the chargeback process and what occurs if you are found guilty of chargeback fraud.
What Is the Fair Credit Billing Act?
The Fair Credit Billing Act is a federal law enacted in 1975 that protects consumers from unfair billing practices.1 This law amended the Truth in Lending Act (TILA) so a consumer can dispute claims.
Under this act, you have protection against unauthorized, incorrect, and questionable charges. You can file a dispute for numerous reasons, such as:
- Billed for returned merchandise.
- Billed for merchandise you never received.
- Charged multiple times for the same item or service.
- Bill sent to the wrong address.
When you file a dispute, the credit card issuer will conduct an investigation. You will receive credit for the disputed amount once the investigation ends. You do not have to pay anything to file a dispute, but businesses are responsible for paying chargeback fees. A chargeback fee can range from $20 to $100.
A Breakdown of Going to Jail for Disputing Charges
|– Intentional fraud.
– Misrepresentation of transaction details.
– Repeat false claims.
|– Account suspension.
– Increased fees.
– Legal action.
|– Regularly review account statements.
– Keep transaction records.
– Secure account details.
|– Provide transaction evidence.
– Challenge false disputes.
– Report suspicious activities.
|Credit Bureau Impact
|– Multiple false claims can impact credit score.
– Recorded disputes may affect credit history.
|– 24/7 helpline from credit card providers.
– Online portals for dispute tracking.
|Duration of Investigation
|– Simple cases: 30 days.
– Complex cases: Up to 120 days.
|– Right to fair investigation.
– Right to secure personal data.
|– Use of secured transaction methods.
– Verification processes for large transactions.
|– Engage in open communication with merchants.
– Seek legal advice if unsure.
How To Begin the Chargeback Process With a Credit Card Issuer
There are various reasons why you may want to file a dispute. For example, you may notice a billing error on your credit card statement. To start the chargeback process, you must write a letter to the credit card company.
To send a written notice to a credit card company, you will need to include some identifying information. Typically you need to provide your full name, account number, the disputed amount, and why you suspect a billing error exists. Creditors do not require supporting documents, but you can include them.
You will need to mail the letter to a specific address meant for billing inquiries. You can find this address on the creditor’s website. Consider using certified mail so you can track the letter and get an electronic confirmation of delivery. You must mail the letter to a creditor within 60 days from the date of the billing statement with the error.
Once a creditor receives your letter, they have up to 90 days (two billing cycles) to investigate and resolve the dispute. Suppose there is a billing error on your account. In that case, the creditor must provide a written explanation of the corrections made. The creditor must also remove all charges related to the dispute.
How to Dispute a Fraudulent Charge
You need to call the card issuer or file a dispute online if there is a fraudulent charge on your credit card statement. A consumer must address and report fraud immediately, which is why you should not rely on the postal service.
After reporting fraudulent charges, you will receive a new credit card in the mail within a few business days. Fraudulent charges result from various offenses, such as identity theft, check fraud, false advertising, etc.
Call Customer Service
Every credit card company provides a number on the back of the credit card. You can call this number and connect to the correct department via phone prompts. After confirming your identity, an agent will ask about errors or fraudulent purchases. You will need to provide the disputed amount and the date.
File a Dispute Online
Credit card disputes are typically done online through your account. You must complete an online form with the disputed amount, date, and other personal details. Ideally, you should call the creditor about fraudulent purchases to have suspicious activity addressed quickly. But suppose you have a joint card member or authorized users on your account. In that case, you may have questions about a transaction, which an agent can answer online.
What Happens if I Intentionally Commit Credit Card Fraud?
You cannot go to jail for filing credit card disputes. The Fair Credit Billing Act directly protects consumers from incorrect and fraudulent charges. But if you file fraudulent chargebacks, you risk lawsuits and criminal charges.
A fraudulent chargeback is a false dispute made by a consumer to secure a refund. Fraudulent chargebacks are a form of fraud and have severe consequences for consumers. Friendly fraud chargebacks typically refer to unintentional disputes. Still, this term can be a blanket term for intentional and unintentional fraud.
Submitting frivolous chargebacks can result in severe consequences. Merchants and creditors have the legal right to take you to civil court and pursue criminal charges. If someone does not make enough money to pay bills, it may seem easy to commit chargeback-related fraud to get quick cash. However, the consequences are too high. Luckily, there are plenty of helpful financial tips online.
You can find tips for living on one income or starting a budget plan online. By organizing your finances and saving when possible, you can start living and stop worrying about money, even when you live on one income.
What Happens if I Accidentally Commit Chargeback Fraud?
Suppose you typically order food through Grubhub but one day use Uber Eats instead due to a coupon. When your credit card bill arrives, you may have forgotten about this singular charge and filed a dispute with your creditor.
You may suddenly remember that you were responsible for the mysterious charge a few days later. What happens if you accidentally commit friendly fraud? Do not panic! All you have to do is contact your creditor and explain the mishap. People are forgetful, and your creditor will appreciate your initiative to correct a false chargeback.
How to Issue Complaints
You may find yourself issuing a complaint against a creditor at some point. For example, creditors cannot issue threats when a customer files a chargeback. If this occurs, you can rightfully issue a complaint.
Suppose you think a credit card company has violated the Fair Credit Billing Act. In that case, you can file a complaint with the Federal Trade Commission (FTC). You can also decide to sue the creditor and take them to court.
If you win a lawsuit against a creditor, you may be awarded damages, including twice the finance charge amount. This amount must be between $500 and $5,000. Although, you may win even more money if there is evidence of a pattern of violations. Successful lawsuits can also result in paid attorney fees by the creditor.
A Review of Disputing Credit Card Charges
Credit card customers have protection against theft, data breaches, card skimming, and much more. Many creditors offer a zero liability protection policy that protects customers against unauthorized charges. Suppose your information is stolen and a fraudster uses your card for an expensive unauthorized charge. In that case, you are not responsible for covering that cost. You have the ability to file a dispute and request a chargeback.
Many people take advantage of this policy by filing false chargebacks. While this seems like an easy way to make free purchases, the consequences of illegitimate chargebacks are significant. Consumers can face severe criminal fines and jail time. Most people that file frivolous chargebacks do so because they lack emergency cash. But there are better alternatives. Even if someone has a poor credit score, they could still be eligible for online no credit check loans.
You are encouraged to report fraudulent activity on your credit card. If you are the victim of fraudulent activity, rest easy knowing there are protections in place. Simply call your creditor the moment you become aware of suspicious or unauthorized charges. They will handle everything for you!
Disputing Charges FAQ
Credit card providers aim to ensure fair and transparent credit card transactions for both consumers and merchants. They mediate the disputing process to determine the validity of fraudulent or disputed transactions.
Credit card providers review the evidence provided by both the cardholder and the merchant. They assess the nature of the credit transactions, any previous transaction history, and any communication between the parties involved.
During the disputing process, the specific amount in question may be temporarily credited back to your credit card account until a resolution is reached. However, it’s essential to continue making payments on your account to avoid late fees or penalties.
Yes, filing false chargeback claims can lead to penalties such as increased fees, account suspension, or even legal action. Credit card providers take such actions seriously to fight chargeback fraud.
Before initiating the credit card chargeback process, ensure you have all the necessary documentation and evidence to support your claim. This can include receipts, email communication, or any other relevant proof of the fraudulent or disputed transaction.
If you realize you’ve mistakenly initiated a credit card chargeback, contact your credit card provider immediately. Explain the situation and provide any necessary evidence to show that the dispute was filed in error.
Credit card providers have stringent measures in place to detect and fight chargeback fraud. They use advanced algorithms to monitor credit transactions and identify patterns that might indicate fraudulent activity or filing false claims.
Yes, merchants have the right to challenge a credit card dispute. They can provide evidence to the credit card providers to prove that the transaction was legitimate.
The disputing process can vary, but typically, credit card providers resolve disputes within 60 to 90 days. However, complex cases might take longer.
If you suspect unauthorized credit transactions on your account, report it immediately to your credit card provider. They will guide you through the necessary steps to secure your account and investigate the matter.
A Word From CreditNinja About Disputing Charges
If there has been an error in calculating charges on your checking account, credit card, personal loans, or other financial account, it’s important you report the error ASAP. It’s important to be honest and truthful during the entire process to avoid legal consequences or other negative outcomes. Furthermore, if you find yourself in a situation where you need extra money while you are disputing charges, CreditNInja suggests you seek out options such as:
- Using your savings
- Organizing your budget to see if there is extra room in your finances
- Borrowing a small amount of money from a close friend or family member
But, if none of these options are available to you, you can always consider personal installment loans with the help of CreditNinja!