It’s no secret that in this recession, many travel companies are playing the discount-and-surcharge game. You know, the one where they slash prices and then add hidden fees to make up the difference.
It would follow, then, that a lot of unwanted charges are popping up on credit card bills.
“The number of credit card disputes seems to be on the rise,” said Jason Sarracini, president of TargetVacations.ca, an online travel agency. “Consumers seem to think they can use their cards as bargaining tools.”
But as far as tools go, credit cards are not reliable. That’s because disputing a card charge is more of an art than a science.
For example, Ron Di Costanzo, a retired college professor, didn’t want to pay his $15 luggage fee when his bags were lost after a recent flight. “I wrote my credit card company and told it that if I was paying for a bag, it should be there when I arrive,” he said. “I was credited the $15.”
Here’s what you need to know to file a successful dispute.
Watch your bill
Review your credit card statement as soon as you get it online or through the mail.
“Compare receipts to charges listed on the statement,” said Catherine Williams, a vice president at Money Management International, a financial advice company. “Should you see any mismatch of information, … you should immediately file a dispute with you creditor.”
Remember, while your dispute is under investigation, the amount in question can’t be charged interest or reported as late in payment.
Have an airtight case
Every disputed card charge won’t be decided in your favor. The weaker challenges are rejected. For instance, say someone buys a vacation package online and then the price falls.
“Many times, we are not able to refund the difference, so consumers decide to take action,” Sarracini said.
Yet, those remain legitimate purchases, and a dispute isn’t likely to do any good. On the other hand, if a company has violated federal or state laws, or breached its own contract, then you stand an excellent chance of prevailing.
Exhaust other options
A credit card dispute shouldn’t be your first move but a last resort.
“You should go to the merchant first to try to resolve your problem,” said Josh Moritz, a managing partner at Blau Moritz Klang, a marketing agency that develops credit card debt-collection programs for banks. “Oftentimes, the merchant will make amends.” That might include a partial refund or credit for a future product.
Consider the resolution carefully before deciding to take your case to a dispute, which is more of a winner-takes-all proposition. You might be better off compromising.
Know the law
The Fair Credit Billing Act lets you dispute billing errors directly with your card company. It covers everything from fraudulent purchases to incorrect billing amounts to deficient merchandise, according to consumer rights attorney Don Petersen.
“Credit card companies must conduct a reasonable investigation within two months and send … a letter informing the consumer of the results of its investigation,” he said.
For more information on the rules, go to the Federal Trade Commission’s Web site at ftc.gov and type “fair credit billing” in the search field. Also, you may have other remedies, said Ken Lin, the chief executive of Credit Karma, a financial information company. “There are often consumer protection laws at the state level regarding warrantees and refunds,” he said.
Don’t forget exceptions
Under the Fair Credit Billing Act, the purchase price must exceed $50 and the transaction needs to occur within the same state as the cardholder’s address or within 100 miles of the cardholder’s address for the law to apply. But card companies’ dispute departments do not always observe that.
“In practice, these provisions aren’t generally enforced,” said Curtis Arnold, co-author of “The Complete Idiot’s Guide to Person-to-Person Lending.” “So if you have a dispute on a transaction that’s on the other side of the country, don’t let this prevent you from filing.”
Remember your paperwork
Documentation is important for any card dispute, said Richard Bialek, a credit card expert. After contacting your card company, it will review your eligibility and examine the transaction for technical compliance. If it passes both those tests, it hands the dispute off to the travel company, which eventually triggers a dispute resolution process established by each of the card networks.
“This process is similar to a trial, with the card issuer representing the consumer, the merchant’s bank representing the merchant and the network acting as judge and jury,” Bialek said.
To win, you’ll need ample documentation, he added. His advice: “Keep receipts.”
Don’t give up
“You can complain to the Federal Trade Commission and sue if the dispute is not resolved properly,” said Sandy Shore, a senior counselor for Novadebt, a credit counseling services firm. Put differently, just because you lose a dispute doesn’t mean you’ve lost the money.
After you’ve won a dispute and reported the travel company to the government, show your appreciation to your credit card company. A card that successfully advocates for you deserves your business and recommendation.
And what if it fails?
“If you’re not satisfied with your current company,” said Glen Lazovick, a senior vice president at Mid-Atlantic Federal Credit Union, “go elsewhere.”
