How to Dispute a Transaction With Your Bank

When an unexpected or incorrect charge appears on your financial statement, understanding how to dispute it with your bank is important for managing your personal finances and protecting your consumer rights. Financial institutions and federal regulations offer pathways for consumers to challenge such transactions, providing a layer of security against errors, unauthorized activity, or issues with goods and services received.

Understanding Disputed Transactions

A disputed transaction refers to any charge on your account that you believe is incorrect, unauthorized, or problematic. These issues can arise from various scenarios, including fraud where someone uses your card information without permission, such as when your credit card number is stolen. Federal law limits your responsibility for unauthorized credit card charges to $50, provided you report it promptly.

Other common reasons for disputes include billing errors such as incorrect amounts charged, duplicate transactions for a single purchase, or charges for goods or services that were never received or were not as described. You might also encounter disputes if you cancel a subscription service, but charges continue to appear on your statement. Regularly reviewing your bank and credit card statements is important for promptly identifying any unfamiliar or erroneous transactions, allowing you to act quickly and maximize consumer protections.

Preparing Your Dispute

Before initiating a formal dispute, gathering all pertinent information and supporting documentation is a necessary first step. Identify the transaction in question, noting its date, the exact amount, and the name of the merchant involved. Determine the type of transaction, such as whether it was a credit card charge, a debit card deduction, or a direct bank transfer, as different rules may apply. Relevant account numbers connected to the transaction should also be readily available.

Collecting supporting documentation strengthens your dispute claim. This can include copies of receipts or order confirmations that show the correct amount or terms of sale. Any communication records with the merchant, such as emails, chat transcripts, or notes from phone calls, can demonstrate attempts to resolve the issue directly. For non-delivery or service issues, proof of non-receipt or evidence detailing the problem, such as photographs of damaged goods, is valuable.

Filing Your Dispute

Most financial institutions offer several methods for filing your dispute, including contacting them by phone, utilizing online banking portals, or sending a formal written letter. While a phone call can be a quick way to initiate the process, particularly for reporting lost or stolen cards, federal regulations often recommend or require written notice for certain types of disputes to ensure a clear record.

Specific timelines and consumer protection laws govern how disputes are handled, depending on the transaction type. For credit card disputes, the Fair Credit Billing Act requires you to notify your credit card issuer in writing within 60 days of the statement date on which the error first appeared. The issuer must acknowledge your dispute within 30 days and resolve the issue within two billing cycles, but no more than 90 days. For debit card transactions, the Electronic Fund Transfer Act provides protections, requiring you to report errors within 60 days of the statement date. Under this Act, financial institutions have 10 business days to investigate and must resolve the dispute within 45 days, though extensions up to 90 days are possible for certain cases.

After You File Your Dispute

After you file your dispute, your financial institution will begin an investigation into the reported transaction. During this period, which can range from a few days to several weeks, you might receive a provisional credit to your account. This temporary credit allows you to access the disputed funds while the investigation is ongoing, although it can be reversed if the dispute is ultimately resolved against you. The bank may also contact the merchant’s bank to gather further information or evidence.

Your financial institution will communicate with you regarding the progress of the investigation and may request additional documentation. Respond promptly to any such requests to avoid delays or potential denial of your claim. Once the investigation concludes, the financial institution will inform you of the outcome. If the dispute is found in your favor, the charge will be permanently removed from your account, and any associated interest or fees will be refunded. If the dispute is denied, the financial institution will provide a written explanation. Should you remain unsatisfied with the resolution, you may have further recourse, such as contacting consumer protection agencies or seeking legal counsel.