What to Do About Incorrect Transactions on Your Statement?

Incorrect transactions appearing on monthly statements can be a common and unsettling occurrence for consumers. These discrepancies, whether on credit card bills or bank statements, require careful attention to prevent financial loss and protect one’s financial standing. Understanding the proper steps to address such issues is important for safeguarding personal finances.

Recognizing and Documenting Irregularities

Regular review of bank and credit card statements is essential for financial vigilance. Scrutinize each transaction to identify unfamiliar or incorrect entries. Common types of errors include charges for purchases never made, duplicate charges, or incorrect amounts for legitimate purchases. Sometimes, a merchant name might appear differently on a statement than expected, leading to initial confusion that a quick online search can often clarify.

After identifying an error, document the suspicious transaction. For each questionable entry, note the transaction date, the amount, and the merchant’s name as it appears on the statement. Record personal details like time, location, or individuals with account access. Gathering supporting evidence is crucial, including receipts, order confirmations, emails, or other records that contradict the erroneous entry. This record-keeping provides evidence for a formal dispute.

Reporting the Discrepancy

After identifying and documenting an incorrect transaction, formally report the discrepancy to the financial institution. While an initial phone call can quickly start the process, follow up with a formal written notice. This written communication creates a clear record of the dispute and is often a requirement for legal protection.

The written notice must contain specific details. Include your full name, account number, and details of the disputed transaction, such as its date, amount, and merchant involved. Clearly state that an error has occurred and specify the action you are requesting, such as a credit to your account or an investigation into the charge. Send this letter via certified mail with a return receipt requested, providing proof of receipt and date. Adhering to strict reporting deadlines is important; credit card disputes generally require written notification within 60 days from the statement date showing the error, and debit card disputes have a similar timeframe.

Navigating the Investigation and Resolution

After formally reporting a discrepancy, the financial institution begins an investigation into the claim. Under federal regulations, credit card issuers must acknowledge receipt of a written dispute within 30 days and are required to resolve the dispute within two complete billing cycles, which cannot exceed 90 days. For debit card errors, financial institutions typically have 10 business days to investigate, extendable to 45 or even 90 calendar days for specific transactions or new accounts.

During this investigation, for credit card disputes, you can withhold payment of the disputed amount and any associated finance charges. For debit card disputes, if the financial institution cannot complete its investigation within 10 business days, it must provisionally credit your account for the disputed amount, allowing access to funds during the investigation. The institution may request additional information; responding promptly can expedite the process. Maintain a record of all communications, including dates, names of representatives, and notes from conversations, throughout the investigation.

Upon concluding the investigation, the financial institution will inform you of its findings. If the dispute is resolved in your favor, any provisional credits will become permanent, and the incorrect charge will be removed. If the financial institution determines the charge is valid, they must provide a written explanation of their findings. You typically have a limited timeframe to challenge their findings if you disagree.

Consumer Protections

Federal laws protect consumers from incorrect transactions on financial statements. For credit card disputes, the Fair Credit Billing Act (FCBA) protects consumers from unfair billing practices on open-end credit accounts. This act covers unauthorized charges, incorrect amounts or dates, and charges for goods or services not received. Under the FCBA, your liability for unauthorized credit card charges is limited to $50, though many credit card issuers voluntarily offer zero-liability policies. To benefit from these protections, send written notice of the billing error within 60 days of the statement mailing date. During the investigation, the creditor is prohibited from taking adverse actions that could harm your credit standing, such as reporting the disputed amount as delinquent.

For debit card transactions and other electronic fund transfers (EFTs), the Electronic Fund Transfer Act (EFTA) provides safeguards, covering transactions made via debit cards, ATMs, and automated clearinghouse (ACH) systems. Under the EFTA, your liability for unauthorized electronic fund transfers depends on how quickly you report the incident. If you report the loss or theft of an access device, such as a debit card, within two business days, your maximum liability is typically limited to $50. If reported after two business days but within 60 calendar days of the statement showing the unauthorized transfer, your liability could increase to as much as $500. However, if you fail to report the unauthorized transfer within 60 days after the statement showing the error is sent, your liability may become unlimited.

The EFTA also mandates specific error resolution procedures for financial institutions, including investigation timelines and, in some cases, temporary credit during investigation. Understanding these rights empowers consumers throughout the dispute process.