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Charging into battle
April 23, 1998: 4:50 p.m. ET

If you want to fight a credit card charge, you'll have to be tough and persistent
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NEW YORK (CNNfn) - A stetson from Santa Fe? A jacket from J. Peterman? If your credit card is billed for a classic horseman's duster and you never ordered one, you might be in for a showdown with your credit card firm.
     The unauthorized use of credit cards costs consumers about $3 billion a year, according to the U.S. Office of Consumer Affairs, but that figure fails to take into account other disputes, such as being billed for goods that were ordered but not received.
     Whether the disputed charge was made in a store, online or over the phone, do all of your complaining and corresponding to companies in writing. Part of the appeal of credit cards for merchants is the documentation they allow, and you need to make that work for you as well.
     Be sure to include your name, account number, the dollar amount and the reasons you think there has been a mistake. The best protection for yourself is to keep all of your original documents, such as receipts and billing statements. Only send copies and be prepared to write multiple letters. Settling most disputes requires persistence from the cardholder.
     Your first move is based on the nature of your dispute. About 70 percent of all billing disagreements are the result of unauthorized use of the cards. This usually means the card or its number has been stolen and used without the cardholders' consent.
     If this has happened to you, contact the financial institution that issued you your credit card immediately. Normally, this is a bank such as Citibank, not MasterCard, which does not directly issue cards.
     The financial firm will have a form you need to fill out. "Many issuers have a charge back form built into the monthly billing statement," said Robert McKinley, president of RAM Research Group, a credit card watchdog outfit.
     The burden of proof is on the merchant when there is a question of unauthorized charges, said McKinley.
burden of proof

     As part of their agreements with issuing companies, businesses that accept those credit cards are required, among other things, to verify that the customer is indeed the cardholder. After being notified, the card issuer will look into the transaction to see if this was done correctly.
     If the business did not, for example, verify the signature as being correct, the merchant could be liable for the cost. It's also in the best interest of consumers to bring the dispute to the issuer's attention since a large number of complaints against a business could result in its account being terminated.
     Not all billing disputes are the result of unauthorized activity. In some cases, a customer does not receive what she ordered or is displeased with what she has bought.
     In those cases, according to Doug Rozman, spokesman for MasterCard International Inc., you will need to contact the merchant first. The thought of confronting your opponent may be unsettling but it's often the quickest way of settling the matter.
     If you find yourself getting nowhere, you would then go to your issuer, who would advise you on the next step to take. Arbitration is usually not offered by the credit card companies.
     Unfortunately, if you aren't satisfied with other attempts to resolve it, you may be forced to take it to court, but don't expect any legal help from your credit card company.
     "Once you've exhausted all the options that you have with your issuer, then you would definitely be on your own," said Rozman.

     However, most cardholders are not faced with such a dilemma. "The banks are typically very good at resolving these issues," said Rob Shapiro, spokesman for Visa International Inc. "We hear back from our members that, in most cases, they have worked hard and created a favorable situation for the consumers.
     In the case of an unauthorized transaction, the most you'll have to pay is $50, although both Visa and MasterCard, the two largest card companies, don't hold you responsible for any such charges.

     You have anywhere from 60 to 120 days to notify your issuer of any problems. After being told of the dispute, the charge effectively goes into limbo.
     If the issuer finds that your complaint was valid, you don't have to worry about any charges or interest. If, however, the financial institution believes your claim was not valid, you could be forced to pay interest retroactively on the money you owe.
     There are precautions you can take to prevent unauthorized use of your card and minimize the chances that you'll have to go through any part of this process.
  • Don't provide your account number over the phone if you did not initiate the call. Your number can be used to create a new card.
  • Sign your new credit cards immediately.
  • Make sure only one charge slip is imprinted with your credit card number and always take the carbons with you.
  • Draw lines through empty spaces on charge slips above the total.

     While these precautions offer a certain amount of protection, there's no guarantee of freedom from billing problems, even for people like credit card watchdog McKinley. "I've had charges from restaurants in cities I've never even been to," he said.
     And even if the you end up not having to pay, you may feel less than jubilant. "Being a victim of credit fraud is like being rear-ended," said McKinley. "It can really ruin your day."Back to top
-- by staff writer Randall J. Schultz


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Ram Research Group


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