How to Stop a Credit Card Payment and Dispute a Charge

Credit card transactions are a regular part of modern financial life, but situations can arise where a payment needs to be stopped or a charge disputed. Understanding these procedures protects financial well-being and ensures consumers are not responsible for erroneous or unauthorized transactions. Knowing the correct steps to take, whether canceling an ongoing service or challenging a one-time purchase, is important for a successful resolution.

Stopping Recurring Payments

Stopping payments automatically charged on a regular basis, such as subscriptions or utility bills, begins with the merchant or service provider. Contact the company directly to cancel the recurring service. Obtain written confirmation of the cancellation, such as an email or a cancellation number, and note the date and name of the person spoken to. This documentation can prove helpful if future issues arise.

If direct cancellation with the merchant proves difficult or unsuccessful, federal law provides a mechanism to stop preauthorized electronic fund transfers. Under the Electronic Fund Transfer Act (EFTA), consumers can stop these transfers by notifying their financial institution. This notification must be given orally or in writing at least three business days before the scheduled transfer date. The financial institution may require written confirmation of an oral stop-payment order within 14 days. Stopping the payment with the card issuer does not cancel the underlying contract or subscription with the merchant. Consumers should still attempt to resolve the contractual obligation directly with the service provider to avoid issues like collections or contract disputes.

Disputing Specific Transactions

Challenging a single charge that has already appeared on a statement or is pending is known as disputing a specific transaction. Common reasons for initiating such a dispute include unauthorized transactions, incorrect charge amounts, duplicate charges, or goods and services not received as promised. The Fair Credit Billing Act (FCBA) protects consumers from various billing errors, including these types of issues. If an item purchased was defective or misrepresented, consumers may also dispute the charge under certain conditions, especially if they have first attempted to resolve the issue with the merchant.

The mechanism for disputing a transaction through the card issuer is referred to as a “chargeback.” Federal law requires consumers to send a written notice of a billing error to their credit card company within 60 days after the first bill containing the error was sent. While some card issuers may allow for a longer timeframe, adhering to the 60-day federal guideline is a prudent practice. Before contacting the credit card issuer, it is recommended to first attempt to resolve the issue directly with the merchant. Documenting all communications with the merchant, including dates, names, and outcomes, strengthens the dispute case if escalation to the card issuer becomes necessary.

Information Needed Before Action

Before contacting a credit card issuer to stop a recurring payment or dispute a specific transaction, gather all relevant information and documentation. This preparation streamlines the process and provides a clear basis for the claim. Key details to have readily accessible include the credit card account number and full cardholder details.

For the specific transaction, collect the following information:
The exact date and amount of the charge, the merchant’s name, and how the transaction appears on the credit card statement.
Any proof of purchase, such as receipts, order confirmations, contracts, or service agreements.
All records of communication with the merchant, including emails, chat logs, call notes with dates and names of representatives, and details of any attempts made to resolve the issue directly.
If the dispute involves goods, evidence of non-receipt or defects, such as tracking information, photographs, or descriptions of the discrepancy.

Contacting Your Credit Card Issuer

Once all necessary information has been assembled, contact the credit card issuer. Most credit card companies offer multiple ways to submit a dispute, including a dedicated dispute phone number, an online dispute form or portal, or written correspondence via mail to a specific billing inquiries address. While calling can be a quick initial step, sending a written notice is recommended to ensure legal protections under the Fair Credit Billing Act.

After submitting the dispute, the credit card issuer is required to acknowledge receipt of the complaint in writing within 30 days and then has two billing cycles, or a maximum of 90 days, to investigate and resolve it. During this investigation period, consumers are not obligated to pay the disputed amount or any associated finance charges, though they must continue to pay other undisputed portions of their bill. If the investigation results in a decision in the consumer’s favor, the disputed charge will be removed, and any temporary credits applied to the account will become permanent. If the dispute is denied, the issuer must provide a written explanation, and consumers have the right to appeal or provide additional evidence. Keep detailed records of all communications with the issuer throughout this process.