Chargeback Rights
Written in plain language for general understanding. This is educational content, not legal advice. Based on federal statutes and official sources.
What is this right?
If you paid for something with a credit card and the product was defective, never delivered, or the charge was unauthorized, you have the right to dispute the charge with your credit card company. This process is called a "chargeback."
The Fair Credit Billing Act (FCBA) protects you from unfair billing practices on credit cards. Your maximum liability for unauthorized charges is $50 — and most major card networks (Visa, Mastercard, American Express) offer zero-liability policies, meaning you pay nothing for fraudulent charges. You generally have 60 days from the date of the billing statement to dispute a charge.
When does it apply?
This right applies when:
- You see an unauthorized charge on your credit card statement (someone used your card without permission)
- You paid for goods or services that were never delivered
- You received a product that was significantly different from what was described or was defective
- You were charged the wrong amount or charged more than once for the same purchase
Common misconceptions:
- "Chargebacks work the same for debit cards and credit cards" — No. Credit cards have stronger protections under the FCBA ($50 max liability). Debit cards are covered by the EFTA, which gives you less time and potentially more liability (up to $500 if you wait more than 2 business days to report).
- "I can dispute any charge I regret" — No. Chargebacks are for billing errors and unauthorized charges, not buyer's remorse. Disputing a legitimate charge can result in your claim being denied and could be considered fraud.
- "The merchant always loses a chargeback" — Merchants can fight chargebacks by providing evidence the transaction was legitimate. The card issuer reviews both sides before deciding.
What should you do?
Step 1: Contact the merchant first. Many disputes can be resolved directly — ask for a refund, exchange, or credit. Keep records of your communication attempts.
Step 2: If the merchant will not help, contact your credit card issuer. Call the number on the back of your card or log into your online account. Most issuers let you dispute charges online, by phone, or by mail.
Step 3: Send a written dispute to your card issuer within 60 days of the billing statement date. Include your name, account number, the dollar amount, and an explanation of why the charge is wrong. Send by certified mail to the "billing inquiries" address (not the payment address).
Step 4: The card issuer must acknowledge your dispute within 30 days and resolve it within two billing cycles (no more than 90 days). While investigating, they cannot try to collect the disputed amount or report it as delinquent.
Step 5: If the issuer rules in your favor, the charge is removed. If they rule against you, they must explain why in writing and you can request the documents they used to make their decision.
What should you NOT do?
Don't wait too long. You have 60 days from the billing statement date to dispute a charge under the FCBA. After that, you lose your federal dispute rights (though your card issuer may still help voluntarily).
Don't dispute legitimate charges. Filing a chargeback on a purchase you actually made and received is called "friendly fraud." Merchants can fight back, and repeated false disputes can result in your account being closed.
Don't throw away documentation. Keep receipts, order confirmations, emails with the merchant, photos of defective products, and tracking information. This evidence supports your dispute.
Don't use a debit card for large purchases when possible. Credit cards offer much stronger dispute protections than debit cards. With a debit card, the money leaves your account immediately, and getting it back takes longer.
How New York differs from federal law
New York provides additional consumer protections that supplement federal chargeback rights:
- NY General Business Law § 349: Prohibits deceptive business practices. If a merchant sold you a product through false advertising or misrepresentation, you may have a state-law claim in addition to your chargeback rights, including the right to recover attorney's fees.
- Refund policy requirements: Under NY Gen. Bus. Law § 218-a, merchants must clearly post their refund and exchange policies. If no policy is posted, customers are entitled to a cash refund within 30 days.
- Gift card protections: NY prohibits expiration dates and inactivity fees on gift cards (NY Gen. Bus. Law § 396-i). If charged for a gift card that lost value due to fees, you may have a chargeback claim.
- Internet purchases: NY AG has active enforcement against online fraud and deceptive merchant practices. The AG's office can intervene in disputes involving NY consumers.
Additional Steps in New York
File complaints with the New York Attorney General at ag.ny.gov or call (800) 771-7755. In NYC, contact the NYC Department of Consumer and Worker Protection (DCWP) at nyc.gov/consumers.
Relevant Law: NY General Business Law § 349 (deceptive practices), NY Gen. Bus. Law § 218-a (refund policies), NY Gen. Bus. Law § 396-i (gift cards)
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