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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.

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

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.


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 court—an 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 refund—because of shipping delay—within 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.

TIP 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 Association—through its Mail or Telephone Preference Services—will 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 TIP: If you receive unordered merchandise in the mail, consider it a gift and be free of pressure to pay for it.























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Books And Other Publications

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

  • National Banks:

Comptroller of the Currency
Compliance Management
Mail Stop 7-5
Washington, D.C. 20219

  • Federal Credit Unions:

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


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


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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