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YOUR
CREDIT CARD RIGHTS:
What To Do If You Have A Problem |
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 CONTENTS
Prompt Credit
For Payment
Refunds Of
Credit Balances
Resolution Of
Errors
Removal Of
Unauthorized Charges
Resolution Of
Disputes
Prompt
Shipment
Protection
Against Offensive Junk Mail/Junk Calls
INFOSOURCES
You 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.
A 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.
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TIP: To avoid delays
that could result in finance charges, follow the
card issuer's instructions about where to send
payments. Payments sent to other locations could
delay getting credit for your payment for up to
five days. If you lose your payment envelope,
look on the billing statement for the address for
payments or call the card issuer. |
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. (Also, if a
credit balance remains on your account for more than six
months, the card issuer must make a good faith effort to
refund the credit balance.)
Federal law 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. In fact,
many card issuers print a summary of your rights on each
bill they send you.
You must notify the card issuer in writing at the address
specified for billing errors when you find an error, and
you must do so within 60 days after the first bill
containing the error was mailed to you. (For this reason,
keep your credit card receipts and promptly compare them
when your bills arrive.) In your notification letter,
include your name, your account number, the amount of the
suspected error, and the reason why you believe that the
bill contains an error. The card issuer, in turn, must
look into the problem and either correct the error or
explain to you why the bill is correct.
This investigation must occur within two billing
cycles and not later than 90 days after the issuer
receives your billing error notice. During the period
that the card issuer is investigating the error, you do
not have to pay the amount in question. (For further
information, write: "Credit Billing Errors,"
Public Reference, Federal Trade Commission, Washington,
D.C. 20580.)
Under federal law, if your credit card is used without
your authorization, you can be 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. Some companies have toll-free
numbers printed on their statements and 24-hour service
to accept such emergency information. For your own
protection, you should follow up your phone call with a
letter to the card issuer. The letter should give your
card number, say when your card was missing, and mention
the date you called in the loss
If 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. You can
withhold payment up to the amount of credit outstanding
for the purchase, plus any finance or related charges. If
the card you used is a bank card, a travel and
entertainment card, or another card not issued by the
seller of the defective merchandise, you can withhold
payment only if the purchase exceeded $50 and occurred in
your home state or within 100 miles of your billing
address.
If these conditions do not apply to you, you may want to
consider filing an action in small claims courtan
informal legal proceeding that can be used to settle
disputes. While the maximum amounts that can be claimed
or awarded differ from state to state, most small claims
courts hear cases involving amounts ranging from $25 to
$2,000. Some states have recently raised their limits to
$5,000. Check your local telephone book under your
municipal, county, or state government headings for small
claims court listings.
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. 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 refundbecause of
shipping delaywithin seven working days (or one
billing cycle) after the seller receives your request to
cancel.
Refusal Of Delivery
You may refuse a delivery of damaged or spoiled items.
Withholding Of Payment In Case Of Dispute
You 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.
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TIP: If you are
ordering something to be delivered by C.O.D.,
make your check out to the seller, not the post
office. That way, you may contact your bank and
stop the check if there is an immediate problem
with merchandise. |
You may obtain a U.S. Postal Service "Prohibitory
Order" on sexually offensive mail advertisements
coming to your home. You also have the right to tell
commercial telephone and direct mail marketers to stop
calling you, and to sue in Small Claims Court if they
continue to call. If you request it, the Direct Marketing
Associationthrough its Mail or Telephone Preference
Serviceswill ask subscribing companies to take your
name off their lists.
Here is how to register with the Direct Marketing
Association: Mail a letter requesting removal from
mailing or telemarketing lists to the two addresses
below. Include your name, address, city, state, zip code,
and phone number.
Telephone Preference Service
Direct Marketing Association
P.O. Box 9014
Farmingdale, NY 11735-9014
Mail Preference Service
Direct Marketing Association
P.O. Box 9008
Farmingdale, NY 11735-9008
If companies you now do business with also remove your
name, you can contact them directly to have your name
reinstated. Keep records. If the marketer calls again,
you can sue. You may have additional legal rights under
state or local law.
|
TIP: If you receive
unordered merchandise in the mail, consider
it a gift and be free of pressure to pay for it. |
Provides month by month suggestions and
ideas to improve your financial life.
|
Related
FGs
External Sites
Financial
Calculators
Personal
Financing
Books And Other
Publications
- Larry Burkett, The Complete Guide to
Managing Your Money (Budget Book
Service, 1996), ISBN 0884861325.
- Jane Bryant Quinn, Making the Most of Your
Money, (Simon &
Schuster,1997), ISBN 0684811766.
- C. Frederic Wiegold, Editor, The Wall
Street Journal Lifetime Guide to Money,
(Hyperion, 1997), ISBN 0786861320.
Government And
Non-Profit Agencies
The 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.
- State Member Banks of the Reserve System:
Consumer & Community Affairs
Board of Governors of the Federal Reserve System
20th & C Sts., N.W.
Washington, D.C. 20551
Comptroller of the Currency
Compliance Management
Mail Stop 7-5
Washington, D.C. 20219
National Credit Union Administration
1776 G St., N.W.
Washington, D.C. 20456
- Non-Member Federally Insured Banks:
Office of Consumer Programs
Federal Deposit Insurance Corporation
550 Seventeenth St., N.W.
Washington, D.C. 20429
- Federally Insured Savings and Loans, and
Federally Chartered State Banks:
Consumer Affairs Program
Office of Thrift Supervision
1700 G St., N.W.
Washington, D.C. 20552
- Other Credit Card Issuers (includes
retail gasoline companies):
Division of Credit Practices
Bureau of Consumer Protection
Federal Trade Commission
Washington, D.C. 20580
- The U.S. Postal Inspection Service:
This office covers mail fraud, sexually offensive
materials, solicitations that look like government
materials but are not. If you suspect such
violations, contact your local Postmaster or Postal
Inspector or:
Chief Postal Inspector
U.S. Postal Service, Room 3100
475 L'Enfant Plaza SW
Washington, D.C. 20260-6444
Tel. 800- 654-8896
or
The Consumer Advocate
U.S. Postal Service
Washington, D.C. 20260-2200
Tel. (202) 268-2284
The Federal Trade Commission does
not handle individual complaints, but reporting failure
to deliver, late delivery, unordered merchandise,
misrepresentation or fraud helps uncover widespread
abuses that the FTC might take action to stop.
Division of Enforcement
Federal Trade Commission
Washington, DC 20580
Tel. (202) 326-3768
The Federal Communications Commission
will handle requests for action on suspected violations
of the Telephone Consumer Protection Act, such as
persistent sales calls after the seller is told to stop.
Informal Complaints and Public Inquiries
Branch
Enforcement Division
Common Carrier Bureau
FCC, Mail Stop 1600A2
Washington D.C. 20554
Mail and Telephone Preference Services
should be contacted if you wish to have your name removed
from mail or telephone lists of many companies. You may
also contact the Direct Marketing Association.
Telephone Preference Service
Direct Marketing Association
P.O. Box 9014
Farmingdale, NY 11735-9014
and
Mail Preference Service
Direct Marketing Association
P.O. Box 9008
Farmingdale, NY 11735-9008
Low-Cost Credit Cards: Bankcard Holders
of America lists banks charging no fees and low interest
rates for their conventional credit cards. To obtain a
copy of the list, write to:
Bankcard Holders of America
524 Branch Drive
Salem, VA 24153
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