MEMPHIS, TN (WMC) - Federal law allows consumers to dispute unexplained, unauthorized, or erroneous charges on their credit cards. Period.
That's why I always tell consumers to use their credit cards for online purchases, for purchases where they can't witness the swipe transactions -- or for every transaction if they are disciplined enough to pay off their balances. Credit cards afford built-in features in which their issuers will virtually automatically refund any disputed charge. The issuers make so much profit on interest payments that it is in their best interests to simply refund a disputed charge to keep credit card commerce flowing.
However, a viewer from Oakland, Tennessee, presented me with an interesting take on a credit card charge dispute.
She told me she bought a $4,000 patio set from a local retailer. She paid with her credit card. That was three months ago, and the retailer has neither produced nor delivered the patio set. She said she threatened to dispute her credit card charge, but she said the retailer referred her to her purchase contract. She said the contract stipulates the retailer can take all the time it wants to deliver the merchandise. It also stipulates a credit card purchase cannot be reversed.
Chi Chi Wu, staff attorney for Boston's National Consumer Law Center, told Bankrate.com the federal Fair Credit Billing Act gives consumers the right to dispute credit card charges over unacceptable or undelivered goods and services. Basically, the law puts the power in the hands of the credit card issuer to determine whether to reverse the credit charge. Wu said there are two catches: the credit charge must be for more than $50, and it must have been made either in your home state or within 100 miles of your mailing address.
Our Oakland viewer's scenario meets both of those conditions. Sorry, patio set retailer. You snooze, you lose -- and the consumer gets her credit back.