I have a confession to make. I’m among that rare breed of credit card user that you’ve heard about but never really believed exists. That’s right: I’m a credit card statement confirmer. Every time I get a credit card statement, I dig out the receipts I carefully put aside each month and check each and every one against my credit card statement to ensure that I don’t have a problematic charge. It’s tedious sure, but I’ve caught two charges that were errors and thus saved over $200.
And I’m not alone. In 2022, Canadians reported over 100,000 fraud cases related to credit cards, with losses exceeding $165 million, according to RCMP fraud statistics. In fact, credit card fraud remains the most reported type of fraud in Canada, making vigilance on billing statements more important than ever.
To help, here’s a few tips on how to successfully dispute a credit card charge.
How to successfully dispute a credit card charge
Step 1: Evaluate the credit card charge
It’s vital to do some due diligence before you assume a charge is an error because there can innocent explanations for transactions that appear unauthorized. For example, if you purchased something online in the U.S. remember that the final amount you would see on your Canadian credit card may include an additional foreign exchange fee — as much as 2.5% on the full amount — or a higher final prices, as the conversion rate — from one currency to Canadian dollars — could be different than you expected.
It’s also possible that a business is officially registered under a different name than the one displayed (I find this to often be the case with smaller mom-and-pop restaurants and corner stores).
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Step 2: Move quickly
Many consumers don’t realize that credit card providers usually have a set time period in which consumers are allowed to dispute a charge.
In Canada, most banks and credit card issuers give 30 to 60 days to report a dispute, but the Financial Consumer Agency of Canada (FCAC) stresses that disputes should be filed as soon as possible to preserve your rights. To do this you need to scan each credit card statement and confirm that you recognize all charges. If you don’t, be quick about filing a dispute.
Step 3: Pay your bill (even the disputed amount!)
When disputing, always pay the undisputed portion of your credit card bill. If you withhold the full payment, you could still be charged interest on the remaining balance.
However, if your payment isn’t due for a couple of weeks, you may want to hold off paying until you’ve spoken with your credit card company about the charge.
Step 4: Documentation
Gather any receipts, delivery tracking numbers and emails from the merchant that could be helpful in proving your case. While not all credit card companies will ask for proof (especially in the case of very small amounts) it’s always better to be over prepared.
Step 5: Contact the merchant
Almost without fail (except when your credit card information has been stolen) your credit card issuer will request that you speak to the merchant to resolve the situation before requesting a chargeback. Reaching out to the retailer is always a good first move before contacting your credit card company because the majority of disputed charges can be solved with a simple phone call.
I once did not receive a refund for some clothing I had bought online from a major retailer and returned via the mail. Luckily, I had kept the tracking number and postal receipt and all I had to do was give the merchant a copy via email and within three days of the call, I had my refund. I genuinely do find that contacting the merchant directly almost always results in a positive experience.
Step 6: Contact your credit card company
As mentioned above, if you think your credit card information has been stolen, you must contact your card issuer immediately. Otherwise, if you are simply looking to get a chargeback for a single unauthorized transaction, contacting your credit card provider will actually be your last step. Be calm and friendly and explain the issue patiently. You’ll be told whether or not you need to fill out any forms or provide any additional information. You will usually also be given an idea of the length of time if should take to get your chargeback.
Step 7: Get outside help
If all else fails and you think that your credit card provider is not responding satisfactorily to your legitimate concerns, you can escalate your complaint to what is known as a financial institution’s External Complaints Body (ECB).
In Canada there are two ECBs:
- the Ombudsman for Banking Services and Investments (OBSI)
- ADR Chambers Banking Ombuds (ADRBO)
These independent organizations provide their services free of charge to consumers and are a kind of “last resort” if you feel your financial institution is not responding to your complaint.
Before escalating to an ombudsman, you must first go through your bank’s internal complaints process, which takes, on average, about 56 days, according to FCAC; however, the law actually gives your credit card issues up to 90 days, after receiving your claim, to respond. Only after receiving a final response (or no resolution within that timeframe) can you approach OBSI or ADRBO.
If you’re still not satisfied, you could contact the FCAC. This agency oversees federally regulated financial institutions to ensure they have a complaint-handling process for clients. You can contact the FCAC if you’re experiencing difficulty or delays with your bank’s dispute resolution process.
Reasons for a credit card dispute
Credit card disputes can happen for a variety of reasons. It’s possible that your card information and security have been compromised, in which case you would likely notice numerous invalid purchases rather than just a single one. If there are many questionable transactions or if you’re sure you’ve lost your credit card, you would need to phone your credit card provider right away to cancel your card rather than just dispute the transactions.
However, in the case where you are certain that your card has not been compromised, there can be several reasons for a single billing error, including
- A transaction error on the part of a merchant
- A cardholder ordered an item but never received it
- A cardholder returned an item but did not receive the proper credit
- A merchant charged the card more than once for the same item
- A consumer was sent the wrong item or a defective product
What are your rights in the event of credit card fraud?
In Canada, consumers are protected by the FCAC. In the case of fraud —where your credit card is used without your permission — it pays to know your rights. Laws currently state that you are only responsible for $50 of any fraudulent charge, but in practice most Canadian banks and credit card networks, including Visa, Mastercard, and American Express, have zero liability policies. This means that if you promptly report fraud, you likely won’t pay anything, even though the law caps liability at $50.
Each major credit card company has their own liability policy that protects you from fraudulent credit card use:
- MasterCard Zero-Liability Policy
- Visa Zero-Liability Policy
- American Express Fraud Protection Guarantee
What are your rights in the event of a billing error?
If your card information was not stolen and you don’t want to cancel it because there is just an issue with a single transaction, then you’ll want to ask your credit card issuer for what is know as a “chargeback.”
What is a chargeback?
A chargeback is a when your credit card issuer refunds a charge due to a disputed transaction. This is different than a straightforward refund, which is when a merchant or service provider reimburses you for a problematic charge or a refunded item.
The complexity and speed of the chargeback process will usually depend on things like the amount of the purchase and your history with the credit card provider (i.e. do you often request chargebacks, are you a reliable client unlikely to make a false complaint etc.)
Just to be clear, a chargeback isn’t something you can rely on to reimburse you for a purchase you now regret or, in the light of day, realize was way over budget. A chargeback is a consumer protection tool that should be used sparingly and judiciously and not as a way to rectify an unsatisfactory purchase.
What charges are you unable to dispute?
Here are some forms of transactions that you can’t dispute.
- A purchase that was made legitimately by an “authorized user” on your credit card (all the more reason to be careful about who you allow as an authorized credit card user)
- You were charged appropriately and are just experiencing buyer’s remorse
- You want to return the item after the merchant’s exchange/return policy has expired and the merchant refuses. Generally, it’s up to the consumer to abide by the merchant’s return policy.
- You want to lodge a dispute past the credit card issuer’s transaction dispute deadline.
- Pre-authorized payments you agreed to (for example, subscriptions), unless you can prove cancellation.
- Airline tickets or hotel reservations you booked but didn’t use, unless covered by consumer protection laws (such as Ontario’s Travel Industry Act for travel agencies).
Bottom line
Seeing a questionable charge on your credit card bill can feel overwhelming. But there are numerous procedures and safeguards in place to help you successfully dispute a questionable transaction. With the right preparation and approach, disputing an unauthorized charge can be a relatively painless experience.
FAQs
Can I dispute a non-refundable charge?
Yes you can. If there is enough proof to show your claim is valid, the merchant cannot refuse to refund the charge, even if it is a non-refundable charge.
How long does a merchant take to respond to a dispute?
Depending on the credit card issuer you used for the transaction, it could take anywhere from 15 to 45 days to see a refund or to get a response as to the status of your dispute. However, the law states that your credit card issuer has up to 90 days of receiving your claim to resolve the issue. Some cases may be resolved in as little as two weeks, but complex disputes can take the full 90 days.
Does disputing a charge hurt my credit score?
No. Disputing a charge will not reflect negatively on your credit score, although your credit score might receive a statement that your account is in dispute.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.