How Long Do I Have to Dispute a Transaction?

Understanding how long you have to dispute a transaction is important for consumers. Consumer protection laws and financial institution policies govern these disputes, providing a framework for resolving discrepancies and protecting consumers from unauthorized or erroneous charges. Acting promptly within specified timeframes can affect the outcome of a dispute.

Understanding Time Limitations

Federal laws establish specific timeframes for disputing different types of transactions. For credit card transactions, the Fair Credit Billing Act (FCBA) provides protections for billing errors. Consumers have 60 days from the date they receive the statement containing the error to send a written dispute notice to their creditor. Billing errors covered by the FCBA include unauthorized charges, incorrect transaction dates or amounts, charges for goods or services not received as agreed, and mathematical errors. While the FCBA sets a 60-day minimum, some credit card issuers offer extended dispute periods, sometimes up to 120 days from the transaction date.

For debit card transactions and other electronic fund transfers (EFTs), the Electronic Fund Transfer Act (EFTA) outlines consumer protections. If an unauthorized transfer occurs, your liability depends on how quickly you report it. Reporting an unauthorized transfer within two business days of learning about it limits your liability to $50. If you report it after two business days but within 60 calendar days of the statement date on which the error first appeared, your liability can increase, up to $500. If you fail to report an unauthorized transfer appearing on a statement within 60 calendar days, you could face unlimited liability for subsequent unauthorized transfers that occur after this 60-day period. These timeframes begin from the statement date on which the error is first reflected, or the date you become aware of an unauthorized transaction.

Disputing Different Transaction Types

For transactions involving checks, the Uniform Commercial Code (UCC) requires customers to exercise “reasonable promptness” in examining their statements for unauthorized signatures or alterations. While bank policies often require reporting within 30 days of the statement date, a customer has up to one year from the statement date to report an unauthorized signature or alteration to assert the claim against the bank. Some banks may contractually shorten this period to as little as 14 days, though the one-year preclusion remains a UCC provision.

Automated Clearing House (ACH) transfers, used for direct deposits and bill payments, are covered by Regulation E for consumer accounts. Consumers have 60 days from the statement date containing the unauthorized or erroneous ACH debit to dispute it. For non-consumer accounts, the timeframe for an unauthorized entry claim is one year from the settlement date.

Wire transfers traditionally offered fewer consumer protections compared to other electronic payments. Recent legal interpretations suggest the Electronic Fund Transfer Act and Regulation E may apply to a consumer’s initial instruction to send a wire, expanding consumer protections. Despite these developments, dispute windows for wire transfers can be short, and protections vary depending on the circumstances and financial institution.

Peer-to-peer (P2P) payment applications, such as PayPal, Venmo, or Zelle, have their own user agreements and dispute resolution processes. While some P2P transactions are covered by Regulation E, their terms of service impose additional or different requirements for disputing transactions. Users should consult the specific platform’s policies for dispute procedures and timeframes. For disputes directly with a retailer or merchant, such as issues with goods or services received, consumers should first attempt to resolve the matter with the merchant according to their return or refund policies before involving their financial institution.

Initiating a Transaction Dispute

Once an unauthorized or erroneous transaction is identified, gathering all relevant information is the first step in initiating a dispute. This includes the transaction date, the exact amount, the merchant’s name, the account number involved, and a clear reason for the dispute. Any supporting documents, such as receipts, order confirmations, or communication with the merchant, should also be collected.

After gathering the necessary details, contact your financial institution promptly. While an initial phone call can be helpful for immediate reporting, it is important to follow up with a written notice to preserve your legal rights. For credit card disputes under the FCBA, a written dispute is specifically required to trigger the creditor’s investigation obligations. This written notice should clearly state your name, account number, the specific transaction you are disputing, the amount, and a detailed explanation of why you believe it is an error.

Always keep copies of all correspondence, including the written dispute letter, any emails, and records of phone calls. Maintain a log of dates, times, and the names of individuals you speak with regarding the dispute. This thorough documentation provides a clear record of your efforts and can be helpful if further action is required. Sending written notices by certified mail with a return receipt requested can provide proof of delivery and the date it was received by your financial institution.

The Dispute Resolution Process

After you initiate a transaction dispute, your financial institution acknowledges receipt of your claim. For credit card disputes, the creditor must acknowledge your written dispute within 30 days. For debit card errors under Regulation E, the institution must investigate and determine if an error occurred within 10 business days. If the investigation cannot be completed within this initial period, the financial institution is required to issue a provisional credit to your account for the disputed amount.

This provisional credit allows you access to the funds while the investigation continues, though it does not mean the dispute is permanently resolved. The financial institution will then continue its investigation, which may involve contacting the merchant, requesting additional information from you, or gathering evidence. For credit card disputes, the investigation must be completed within two billing cycles, but no more than 90 days. For debit card errors, the investigation period can extend up to 45 calendar days.

Upon completion of the investigation, your financial institution will notify you of its findings. If an error is confirmed, the financial institution must correct it, making any provisional credit permanent and refunding any associated fees. If the dispute is denied, the institution must provide a written explanation for its decision, and you may have a limited time, around 10 days, to appeal the outcome or provide further evidence. If you are unable to resolve the dispute directly with your financial institution and believe your consumer rights have been violated, you can file a complaint with the Consumer Financial Protection Bureau (CFPB), which serves as a federal agency protecting consumers in the financial marketplace.