How to Properly Dispute a Bank Transaction

A bank transaction dispute is a formal process to challenge an unauthorized, incorrect, or fraudulent charge on a financial account. This allows account holders to seek resolution for discrepancies. Acting promptly when an issue arises can significantly affect the outcome of a dispute and is important for adhering to regulatory guidelines. It provides a structured path to address charges that do not belong on your statement.

Understanding Disputable Transactions

A bank transaction dispute can be initiated for unauthorized charges, such as those due to fraud or identity theft, incorrect amounts, or duplicate transactions. It also covers charges for goods or services not received, or errors made by the merchant or bank. When a transaction is disputed, the money paid to a business may be revoked and returned to the cardholder.

Protections and processes for disputing transactions vary between debit and credit cards due to federal regulations. Debit card transactions are governed by Regulation E, which protects against unauthorized electronic fund transfers and requires financial institutions to investigate reported errors. Credit card transactions are protected by the Fair Credit Billing Act (FCBA), which addresses billing errors, including unauthorized charges, incorrect amounts, and charges for goods or services not received. The FCBA limits your responsibility for unauthorized credit card charges to $50.

Gathering Your Dispute Information

Before initiating a dispute, gather all relevant information and documentation. This includes specific transaction details: the exact date, amount, merchant’s name, and any transaction or reference numbers.

Also collect records of any attempts you made to resolve the issue directly with the merchant. Document the dates and times of your communications, the names of individuals you spoke with, and a summary of your discussions. Some financial institutions may require you to attempt resolution with the merchant first. This documentation demonstrates your good faith effort and provides a history of the problem.

Supporting documents can strengthen your dispute. These might include receipts, order confirmations, screenshots of online transactions, or proof of non-delivery for items you paid for but never received. If the dispute involves fraud, a police report can be important evidence. Your personal account number, full name, and contact information are also necessary for the bank to process your dispute.

Submitting Your Dispute

After gathering the necessary information, submit your dispute. Financial institutions offer several methods for filing, including online banking portals, phone calls to customer service, or written letters. Many banks allow you to select the disputed transaction directly within your online account or mobile app. For phone submissions, call the customer service number on the back of your card.

Strict deadlines apply for reporting disputes, varying by debit or credit card transaction. For debit card errors under Regulation E, you have 60 days from the statement issue date to report the error. For credit card billing errors under the Fair Credit Billing Act, send written notice to your card issuer within 60 days after the first statement containing the error was sent. Some card networks, like Visa, Mastercard, and American Express, may offer longer timeframes, sometimes up to 120 days from the transaction date, for certain types of disputes.

Regardless of the method, retain records of your dispute submission. If filing online, save confirmation numbers or screenshots. For phone calls, note the date, time, and representative’s name. When sending a written letter, mail it via certified mail with a return receipt requested to prove receipt. Keeping these records provides proof of your timely submission.

The Dispute Investigation and Resolution

After submitting your dispute, the bank begins its investigation. The bank examines transaction records, account details, and any evidence you provided, often contacting the merchant to gather their perspective.

For debit card disputes, especially those involving unauthorized electronic fund transfers, your bank may issue a “provisional credit.” This temporary credit gives you access to the disputed funds while the investigation is ongoing. Provisional credit may be issued within 10 business days if the investigation cannot be completed promptly. However, provisional credit is not permanent and can be reversed if the bank determines the original charge was valid after their investigation concludes.

Investigation and final resolution timelines vary by card type and case complexity. Under Regulation E for debit cards, banks have 10 business days to investigate a claim, extending to 45 or even 90 days for certain transactions like point-of-sale debit card transactions, international transfers, or new accounts. For credit card disputes under the FCBA, the issuer must acknowledge your complaint within 30 days and resolve the dispute within two billing cycles, meaning up to 90 days.

Possible outcomes include the dispute being resolved in your favor, leading to a permanent credit. Alternatively, the dispute might be denied, meaning the charge remains on your account, or a partial resolution might be reached. If your dispute is denied, you have options to appeal the decision. You can request that the bank reinvestigate the claim, potentially providing new information or stronger evidence.