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Credit Card Disputes and Chargebacks: Using the Fair Credit Billing Act

Updated October 21, 2026 · By the VeriAdvisor editors

When a merchant charges your credit card for something you never received, charges the wrong amount, or bills you for a purchase you did not make, you do not have to simply absorb the loss or fight the merchant alone. Federal law gives credit card holders a formal dispute process, and the card issuer is the one that has to follow it. The process is often called a chargeback in the payments industry, although the legal protections come from the Fair Credit Billing Act (FCBA), 15 U.S.C. 1666, and its implementing rule, Regulation Z, 12 CFR 1026.13. This guide explains how to use those rights, what the deadlines are, and where debit cards and state law differ. It is general information, not legal advice.

What counts as a billing error

The FCBA and Regulation Z define billing errors broadly. They include:

• A charge that you or someone authorized to use the card did not make, which is an unauthorized charge.
• A charge for the wrong amount or the wrong date.
• A charge for goods or services you did not accept, or that were not delivered as agreed. For example, you ordered a laptop and the package never arrived.
• A failure to credit a payment or a return, or a mathematical error in the statement.
• A charge you ask the issuer to clarify or support with documentation, such as when you ask for a written explanation of a charge you do not recognize.

A simple request for a copy of a receipt, with no claim of error, does not trigger the formal procedure, and neither does an ordinary quality dispute with a merchant. Those fall under a separate rule discussed below.

The timeline in the law

1. You have 60 days. Your written notice must reach the issuer within 60 days after the issuer sent you the first statement showing the error (15 U.S.C. 1666(a); 12 CFR 1026.13(b)). Send it to the billing-error address on your statement, which is often different from the payment address. A phone call does not start the legal clock, even if the issuer takes the dispute by phone or online as a courtesy. Write to the billing-error address by mail and keep proof.
2. The issuer must acknowledge within 30 days of receiving your notice, unless it resolves the dispute first (1666(a)(A); 1026.13(c)(1)).
3. The issuer must resolve within two billing cycles, and in no event more than 90 days after receiving your notice (1666(a)(B); 1026.13(c)(2)). It must either correct the account or send you a written explanation of why it believes the charge was correct, along with documentary evidence if you ask.

Count the days carefully, using our deadline calculator if the dates are close. A late dispute does not always end your options, because issuers and card networks have their own, often longer, dispute windows. The legal protection, though, is strongest when you meet the 60-day deadline.

What you can and cannot be required to do while a dispute is open

While the issuer investigates, Regulation Z gives you meaningful protections (1026.13(d)):

• You do not have to pay the disputed amount or any finance charge on it. You still must pay the undisputed part of your bill.
• The issuer cannot treat the account as delinquent or report it to credit bureaus as delinquent because of the unpaid disputed amount, and cannot restrict or close the account because you refused to pay it.
• The issuer cannot try to collect the disputed amount through the card account during the investigation.

If the issuer fails to follow the procedures, the statute provides a penalty: it forfeits the right to collect the disputed amount and related finance charges, up to $50 (1666(e)). That sum is small, which is why the practical value of the law lies in the process and the account protections more than in a payout.

If the issuer decides after investigation that the charge was correct, it must tell you in writing what you owe and give you time to pay, generally at least 10 days. If you still disagree, you can sue the merchant, and you can ask the issuer to report your dispute to credit bureaus as unresolved.

Unauthorized use and your $50 limit

If someone steals your card or number, federal law caps your liability for unauthorized use at $50 (15 U.S.C. 1643; 12 CFR 1026.12(b)). In practice most issuers offer zero liability for fraud. Report the loss immediately, and review each statement monthly. Unauthorized charges are also billing errors, so the same 60-day written notice applies. Do not wait to see whether the merchant refunds you.

Disputes with the merchant: claims and defenses

A different provision covers disputes about the quality of what you bought. Under 15 U.S.C. 1666i, if you made a good-faith attempt to resolve the problem with the merchant and failed, you can assert against the card issuer the same claims and defenses you would have against the merchant, for example that the goods were defective or the service was not performed. Conditions apply:

• The purchase must be for more than $50, and generally must have occurred in your home state or within 100 miles of your billing address. These two limits do not apply if the merchant is the issuer, is controlled by the issuer, or if the issuer solicited the order.
• The amount you can withhold is limited to the unpaid balance for that transaction when you notify the issuer.
• Tort claims, such as personal injury, are not covered.

The practical lesson is to contact the merchant first, in writing, give a reasonable time to fix the problem, and keep the replies. Online and phone purchases may fall outside the 100-mile rule, but many issuers and card networks give refund protection beyond the statute, so ask your issuer what it offers.

How to write the dispute letter

Keep it short and factual, and send it by certified mail or by the issuer's written-dispute method if it provides a secure form. Include:

1. Your name, address and account number (do not send a full card number by email).
2. The charge: the merchant, the date, the amount.
3. A statement that the letter is a billing-error notice under the Fair Credit Billing Act and Regulation Z, with the reason, for example "I did not receive the merchandise ordered on May 5."
4. What you did to resolve it with the merchant, with dates.
5. Copies, not originals, of receipts, order confirmations, shipping tracking, emails and photos.

The chargeback eligibility checker can help you decide which category fits.

A worked example with invented numbers: On April 10 you are charged $240 for a bicycle that was never shipped. Your statement closed April 30 and showed the charge, so the issuer's statement date starts the clock. You must get your written notice to the billing address within 60 days of that statement, by roughly June 29. The issuer must acknowledge by 30 days after receipt, and must resolve within two billing cycles (no longer than 90 days). While it investigates, you do not owe the $240 or interest on it, but you do pay the rest of the statement.

Debit cards and prepaid cards are different

Debit cards are covered by the Electronic Fund Transfer Act and Regulation E (15 U.S.C. 1693 and 12 CFR Part 1005), not the FCBA. The differences matter because the money has already left your bank account. Your loss limits depend on how fast you report: generally $50 if you notify the bank within two business days after learning of the loss, up to $500 after that, and potentially much more if you wait beyond 60 days after the statement showing the unauthorized transfer. Banks must investigate errors, generally within 10 business days, and may provisionally credit your account if they need up to 45 days. Many banks give broader protection by policy, but the law is less generous than for credit cards, which is one reason many people use credit cards for online purchases.

What state law adds

The FCBA applies nationwide, so state law rarely changes the dispute process itself. It matters in two ways. First, if the merchant truly cheated you, state consumer protection and contract law give you claims you can press in small claims court. For example, Texas's Deceptive Trade Practices Act and California's Consumers Legal Remedies Act allow suits over deceptive practices, and Illinois, Florida and New York have their own consumer fraud statutes. See our small claims guide and demand letter guide. Second, some states regulate specific industries, such as auto repair or home improvement, with refund rights that interact with chargebacks. The card dispute and a state-law claim can run in parallel, but you cannot recover twice for the same loss.

Practical cautions

• Do not abuse chargebacks. Disputing a legitimate charge you simply regret can lead to a closed account and loss of the merchant's business. Disputing in good faith for non-delivery or fraud is exactly what the law is for.
• Try the merchant first where it is realistic, and document the attempt. Many merchants refund quickly to avoid the dispute fee.
• Don't ignore subscriptions. For recurring charges you thought you cancelled, send a written cancellation and keep proof, then dispute charges that follow it.
• Keep paying the rest. Missing your minimum payment on undisputed amounts can still trigger late fees and credit reporting.
• Medical and other special bills. If the charge is a hospital bill you believe violates a federal law, a different path may apply; see our guide on the No Surprises Act.

If the issuer refuses or ignores you

Submit a complaint to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint, which forwards it to the company and generally expects a response within about 15 days, and to your state attorney general. If you used a bank-issued card, the bank's primary regulator (the OCC, Federal Reserve or FDIC) also accepts complaints. You can bring a claim in court for violations of the FCBA, which allows actual damages, statutory damages and attorney's fees under the Truth in Lending Act (15 U.S.C. 1640), within one year of the violation. An attorney or legal aid office can tell you whether it is worth the effort for your amount.

Sources

• 15 U.S.C. 1666, Correction of billing errors
• 15 U.S.C. 1666i, Assertion by cardholder against card issuer
• 15 U.S.C. 1643, Liability for unauthorized use
• 12 CFR 1026.13, Billing error resolution (CFPB)
• FTC, Disputing credit card charges
• CFPB, Submit a complaint

General legal information, not legal advice. Laws differ by state and change often. Check the official sources linked above, and talk to a licensed attorney or your local legal aid office before you act. Spotted a mistake? Email huhuwen09@gmail.com with the page address and we will check and correct it.