A chargeback is a reversal of a credit or debit card transaction that puts the money back in your account after you dispute the charge with your bank. Two federal laws give you this right: the Fair Credit Billing Act covers credit cards, and the Electronic Fund Transfer Act covers debit cards. They set different deadlines, different liability limits, and different procedures, so the first thing to know about your dispute is which card you used.
Credit Card Disputes Under the Fair Credit Billing Act
The Fair Credit Billing Act lets you dispute a “billing error” on your credit card statement. The term is broad. It covers charges for items never delivered, goods or services that didn’t match what was promised, math or accounting mistakes, charges in the wrong amount, and unauthorized transactions.1Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
You have 60 days from the date the statement containing the error was sent to you. Your written notice must go to the address your issuer designates for billing inquiries, not the payment address, and it should include your name, account number, the disputed amount, and why you believe it’s wrong.1Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors Most issuers also let you file through their app or website. Filing that way is faster, but a written notice sent by certified mail with return receipt preserves the full statutory protections and gives you proof of delivery.2Federal Trade Commission. Using Credit Cards and Disputing Charges
Once your issuer has the notice, it must acknowledge it within 30 days and finish the investigation within two billing cycles, capped at 90 days.1Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
Disputes About the Quality of What You Bought
If your complaint is that the product was defective or the service was unsatisfactory, a separate section of the law adds three conditions. You must have tried in good faith to resolve the problem with the merchant first, the transaction must have exceeded $50, and the purchase must have taken place in your home state or within 100 miles of your mailing address.3Office of the Law Revision Counsel. 15 USC 1666i – Assertion by Cardholder Against Card Issuer of Claims and Defenses
The dollar and geographic limits fall away if the merchant is the same company as your card issuer, is controlled by it, or reached you through a mail or internet solicitation the issuer participated in.3Office of the Law Revision Counsel. 15 USC 1666i – Assertion by Cardholder Against Card Issuer of Claims and Defenses In practice, most online purchases fall inside the mail-solicitation exception, which makes the 100-mile rule largely irrelevant for e-commerce.
Debit Card Disputes Under the Electronic Fund Transfer Act
Debit card transactions are covered by the Electronic Fund Transfer Act and its Regulation E. The law reaches unauthorized transfers, incorrect amounts, and bookkeeping errors by your bank on electronic transactions.4eCFR. Part 205 Electronic Fund Transfers (Regulation E)
Speed matters more here than on a credit card, because your liability for unauthorized charges climbs the longer you wait:
- Report within 2 business days of learning about the loss or theft, and your liability is capped at $50 or the amount taken before you notified the bank, whichever is less.
- Report after 2 business days but within 60 days of the statement, and your liability can rise to $500.
- Report after 60 days from the statement date, and you may face unlimited liability for unauthorized transfers occurring after that window, if the bank can show that timely notice would have prevented them.4eCFR. Part 205 Electronic Fund Transfers (Regulation E)
If you spot an unauthorized debit charge, report it the same day. A few days of delay can multiply your exposure from $50 to $500.
Your bank must investigate and report back within 10 business days. It can extend the investigation to 45 days, but only if it provisionally credits your account within those first 10 business days so you have access to the money while it works. For an account less than 30 days old, the bank gets 20 business days for the initial response and up to 90 days total.5Consumer Financial Protection Bureau. 12 CFR 1005.11 – Procedures for Resolving Errors The bank may accept your report by phone, but it can require written confirmation within 10 business days; if you don’t send it, the bank isn’t required to keep the provisional credit in place.6Office of the Law Revision Counsel. 15 USC 1693f – Error Resolution
How to File Your Dispute
Before you contact the bank, put the case together. You’ll want:
- Transaction details: the exact date, the merchant name as it appears on the statement, the dollar amount, and any reference or transaction number.
- A clear description of what’s wrong: unauthorized use, item not received, item defective, wrong amount, duplicate charge.
- Supporting documents: receipts, order confirmations, product descriptions or screenshots, photos of damaged items, cancellation numbers, tracking numbers showing you returned the item.
For a quality-of-goods dispute on a credit card, add records of your attempts to work it out with the merchant: emails, chat transcripts, and notes from phone calls with dates, times, and the representative’s name.2Federal Trade Commission. Using Credit Cards and Disputing Charges The good-faith effort is a legal requirement for those disputes, not just a courtesy.
What Happens After You File
Your bank first reviews the claim to confirm it meets the basic requirements. On a credit card dispute, that acknowledgment has to come within 30 days of your written notice. On a debit card dispute, the investigation typically starts right away.
If the claim clears initial review, the bank often issues a provisional credit so you’re not out the money while things get sorted out. For debit disputes, the credit is required if the investigation runs past 10 business days.5Consumer Financial Protection Bureau. 12 CFR 1005.11 – Procedures for Resolving Errors
The merchant is then told about the dispute and has a window, typically 20 to 45 days depending on the card network, to submit evidence that the charge was valid, such as shipping confirmation, a signed receipt, or proof of delivery. Your issuing bank weighs everything and makes a call. If you win, the provisional credit becomes permanent. If the merchant wins, the credit comes back off and the original charge stands. The full process can run up to 120 days.7Mastercard. How Can Merchants Dispute Credit Card Chargebacks
Your Protections While the Dispute Is Pending
On a credit card, the law bars your issuer from acting against you during the investigation. It cannot try to collect the disputed amount, charge interest or late fees on that portion of your balance, or report it as unpaid to credit bureaus.1Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors You still have to pay the rest of the statement by its due date.
Filing the dispute itself does not lower your credit score. Your issuer may note on your report that the account has an active dispute, but the notation alone isn’t negative. What hurts your score is skipping payment on the undisputed part of the bill: missed payments get reported as delinquent and stay on your credit report for seven years from the original due date.
Disputes Through Digital Wallets and PayPal
Paying through Apple Pay or Google Pay doesn’t change your rights. Chargebacks trace back to the credit or debit card linked to the wallet, and the same federal laws and deadlines apply based on which type of card that is. You file with the card issuer, not the wallet provider.
PayPal and similar platforms run their own buyer protection programs on separate rules and timelines. If a PayPal purchase was funded by a linked credit card, you can generally choose between PayPal’s process and a dispute with your card issuer, but not both at once.
When a Chargeback Isn’t Legitimate
Filing a chargeback for something you received and kept, or falsely claiming a charge was unauthorized, is sometimes called “friendly fraud.” The name understates the risk. Your card issuer can close your account if it concludes the dispute was false, and merchants can ban you from future purchases or add you to shared industry fraud databases. In deliberate cases, false chargebacks can be charged as wire fraud, which carries up to 20 years in prison, or bank fraud, which carries up to 30 years and fines up to $1,000,000 when the fraud affects a financial institution. File a chargeback only when you have a real basis under the laws above.