How to Respond to Billing Error Claims
Analyze the billing error notice., Correct the error or acknowledge receipt of the notice., Decide whether an error occurred., Fix the error., Explain your reasons for denying the claim., Dispute withheld payments.
Step-by-Step Guide
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Step 1: Analyze the billing error notice.
A billing error claim is started when a consumer notifies you (the credit card issuer) of an alleged error.
This notification must be sent to you within 60 days of you giving the consumer their credit card statement.
The notice will have the consumer's name, credit card information, and a detailed description of the charge they are disputing.
When you receive this notice, look it over carefully to ensure it complies with your state's, or the federal government's, billing error law.
If the consumer's notice contains all of the correct information and is submitted in a timely manner, you are required to respond accordingly. -
Step 2: Correct the error or acknowledge receipt of the notice.
If, after reviewing the notice, there is a clear billing error, you may choose to simply correct the error.
This is often the case with punctuation errors (e.g., the comma or decimal is in the wrong place on a consumer's bill) that are easily identified and fixed.
However, if you cannot identify a clear billing error, you may have to investigate the consumer's claim.
If you cannot identify a clear billing error on the face of the consumer's notice, you need to let the consumer know you will be investigating their claim.
To acknowledge receipt of a billing error notice, write a formal letter to the consumer.
Your letter should contain your official letterhead, name, title, and address.
In addition, your letter should specifically identify the consumer's name, contact information, and complaint.
Make sure you reference the letter that was sent to you.
This written acknowledgement must be mailed or given to the consumer within 30 days of receiving the notice., If you did not correct the alleged error based solely on the information included in the consumer's notice, you will need to investigate the consumer's claims.
To do so, you will need to collect evidence of the disputed transaction in order to determine if the consumer's claims are well-founded.
Contact the merchant's (i.e., the person or company that contracts with an acquirer to accept credit card payments at their store) acquirer (i.e., the merchant's bank) and ask about the particular transaction.
The acquirer will have to contact the merchant and ask for an accurate copy of their receipt of the transaction.
The merchant's receipt will be forwarded to you by their acquirer.The merchant may also forward other compelling evidence to help their case.
For example, if a consumer claims they never received the product they paid for, and therefore they should receive a refund, the merchant may submit an email confirmation from a delivery service (e.g., FedEx or UPS) proving that the product was delivered to the consumer's address.Once you have received all of the evidence, you will analyze it and determine whether a billing error occurred.
Be aware that your investigation is required to be "reasonable."Therefore, do not simply go through the motions.
Instead, ask for all relevant evidence and follow-up when necessary.
If your investigation falls short of the reasonableness standard, the consumer may have the ability to successfully dispute your process. , If a billing error occurred, you need to fix the error, credit the consumer's account with the appropriate sum of money, and mail a correction notice to the consumer.
These actions need to take place within two complete billing cycles (usually 60 days) after receiving the consumer's notice., If you conclude that no billing error occurred and the charges on the consumer's account were accurate, you need to mail a determination letter to the consumer within two complete billing cycles after receiving the consumer's notice.
Your determination letter should explain, in detail, how your investigation was conducted and why you believe no billing error occurred.Include a description of who you talked with and the evidence you received.
Explain that, after you looked at all the facts, the billing error that was alleged did not actually occur.
This determination letter will be one source of evidence if the consumer appeals your decision.
For example, the consumer might appeal your decision by stating your investigation fell short of the reasonableness standard required by law.
If this happens, you will want to be able to point to your determination letter to show any administrative agency or court that you conducted a thorough search and came to a plausible conclusion. , If the consumer does not agree with your determination, they may continue to withhold the disputed funds from you.
While consumers have the legal authority to withhold payments in certain situations, you also have the legal authority to take certain actions to attempt to retrieve your money.
For example, you can encourage the consumer to resolve the dispute with the merchant directly.
If this happens, you can ask to receive written notice from the merchant of any resolution and correct the errors at that time.
In addition, you can report the amount withheld as "disputed" with any credit reporting agency.
However, be careful not to report the amount as "delinquent" unless you are confident the consumer is improperly withholding funds. -
Step 3: Decide whether an error occurred.
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Step 4: Fix the error.
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Step 5: Explain your reasons for denying the claim.
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Step 6: Dispute withheld payments.
Detailed Guide
A billing error claim is started when a consumer notifies you (the credit card issuer) of an alleged error.
This notification must be sent to you within 60 days of you giving the consumer their credit card statement.
The notice will have the consumer's name, credit card information, and a detailed description of the charge they are disputing.
When you receive this notice, look it over carefully to ensure it complies with your state's, or the federal government's, billing error law.
If the consumer's notice contains all of the correct information and is submitted in a timely manner, you are required to respond accordingly.
If, after reviewing the notice, there is a clear billing error, you may choose to simply correct the error.
This is often the case with punctuation errors (e.g., the comma or decimal is in the wrong place on a consumer's bill) that are easily identified and fixed.
However, if you cannot identify a clear billing error, you may have to investigate the consumer's claim.
If you cannot identify a clear billing error on the face of the consumer's notice, you need to let the consumer know you will be investigating their claim.
To acknowledge receipt of a billing error notice, write a formal letter to the consumer.
Your letter should contain your official letterhead, name, title, and address.
In addition, your letter should specifically identify the consumer's name, contact information, and complaint.
Make sure you reference the letter that was sent to you.
This written acknowledgement must be mailed or given to the consumer within 30 days of receiving the notice., If you did not correct the alleged error based solely on the information included in the consumer's notice, you will need to investigate the consumer's claims.
To do so, you will need to collect evidence of the disputed transaction in order to determine if the consumer's claims are well-founded.
Contact the merchant's (i.e., the person or company that contracts with an acquirer to accept credit card payments at their store) acquirer (i.e., the merchant's bank) and ask about the particular transaction.
The acquirer will have to contact the merchant and ask for an accurate copy of their receipt of the transaction.
The merchant's receipt will be forwarded to you by their acquirer.The merchant may also forward other compelling evidence to help their case.
For example, if a consumer claims they never received the product they paid for, and therefore they should receive a refund, the merchant may submit an email confirmation from a delivery service (e.g., FedEx or UPS) proving that the product was delivered to the consumer's address.Once you have received all of the evidence, you will analyze it and determine whether a billing error occurred.
Be aware that your investigation is required to be "reasonable."Therefore, do not simply go through the motions.
Instead, ask for all relevant evidence and follow-up when necessary.
If your investigation falls short of the reasonableness standard, the consumer may have the ability to successfully dispute your process. , If a billing error occurred, you need to fix the error, credit the consumer's account with the appropriate sum of money, and mail a correction notice to the consumer.
These actions need to take place within two complete billing cycles (usually 60 days) after receiving the consumer's notice., If you conclude that no billing error occurred and the charges on the consumer's account were accurate, you need to mail a determination letter to the consumer within two complete billing cycles after receiving the consumer's notice.
Your determination letter should explain, in detail, how your investigation was conducted and why you believe no billing error occurred.Include a description of who you talked with and the evidence you received.
Explain that, after you looked at all the facts, the billing error that was alleged did not actually occur.
This determination letter will be one source of evidence if the consumer appeals your decision.
For example, the consumer might appeal your decision by stating your investigation fell short of the reasonableness standard required by law.
If this happens, you will want to be able to point to your determination letter to show any administrative agency or court that you conducted a thorough search and came to a plausible conclusion. , If the consumer does not agree with your determination, they may continue to withhold the disputed funds from you.
While consumers have the legal authority to withhold payments in certain situations, you also have the legal authority to take certain actions to attempt to retrieve your money.
For example, you can encourage the consumer to resolve the dispute with the merchant directly.
If this happens, you can ask to receive written notice from the merchant of any resolution and correct the errors at that time.
In addition, you can report the amount withheld as "disputed" with any credit reporting agency.
However, be careful not to report the amount as "delinquent" unless you are confident the consumer is improperly withholding funds.
About the Author
Theresa Hughes
Writer and educator with a focus on practical lifestyle knowledge.
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