You may not know it, but your credit card offers a powerful consumer-protection tool: hassle-free recourse in the event you have a problem with the quality of goods or services you purchased with your card and can’t work things out with the merchant.
The Fair Credit Billing Act, as it’s called, can also save you from financial disaster if your credit card is lost or stolen and someone runs up charges. Here are the rules to follow to be fully protected under the law:
If your card is lost or stolen, you can report that over the phone. But to guarantee you won’t have to pay the maximum $50 liability, write a letter to your credit-card issuer restating what you reported over the phone.
If you discover a billing error, to be covered by the Fair Credit Billing Act you must report the error in writing within 60 days of the postmark on your statement.
Send your letter by registered mail with a return receipt requested. Include your name, account number, the date and amount of the error and the reason you believe the charge is in error. By law, the credit-card issuer must investigate your claim and tell you within 30 days, in writing, that it is investigating your case. And it must resolve the problem within two billing cycles or a maximum of 90 days of being notified of a possible error.
While your charge is being investigated, you don’t have to pay the disputed amount or interest on it, but you should pay the rest of your bill.
