Credit Card and Charge Card Problems

When you have been approved for a credit or charge card, you are responsible for the purchases made with the credit card and the payment for such purchases.

If you have other authorized users of your credit card making purchases, you are still responsible for the payment. The person who is the originator of the credit card application is the person from whom the credit card company will seek to collect payments. The originator of the card also is the one whose credit report will reflect information on balances and payment history.

Several problems can arise with having charge cards. If a card is lost or stolen but not reported to the creditor, you can be liable for unauthorized purchases. Keep a list of all your credit and charge cards, including the name, address, and telephone number of each company; and your account number. Keep the list in a safe place. If your credit cards are ever lost or stolen, you will be able to contact the customer service department immediately to cancel the credit cards.

If your credit card has been lost or stolen, the credit card company will issue a new card with a different account number. The only reason a credit card company won’t issue a new card is if you have had previous problems paying the account.

Unauthorized charges are another problem that could arise with credit cards. Credit card fraud is on the rise across the country. It is important that you safeguard your credit card and credit card account numbers.

When you use your credit card for purchases, always keep your sales receipt. Frequently the merchant will input your credit card number into its System and it prints out on the receipt. If your account number gets into the wrong hands from information on a receipt, there could easily be unauthorized purchases made. The time it takes to keep proper track of your receipts is tiny compared to the time it will take trying to convince the charge company you didn’t make a purchase.

The Fair Credit Billing Act gives you the right to withhold your payment to the credit card company for defective merchandise or inferior service, if certain conditions are met. If you withhold your payment, only withhold the amount for the item in dispute. If you have other purchases included in the statement that you are disputing you must pay for the purchases not include in your dispute. If payment is withheld, the credit card company cannot put any derogatory information on your credit report and cannot report the account as delinquent while the charge is disputed.

Billing errors do occur. Review your statement every month to make sure there are no unauthorized purchases. Credit and charge card billing errors are governed by the Fair Credit Billing Act. An explanation of your billing rights and finance charges is located on the back of your statement. If you discover an error in your statement, you must immediately write a letter to the card issuer.

During the time that you are disputing your bill, the creditor cannot re port your account delinquent to any credit reporting agency and cannot pursue collection activity on the disputed amount until it is resolved. To protect your credit rating, be sure to pay the amount owed to the creditor for items that are not being disputed. The only amount that can be with held from the payment is the disputed amount.

TIFFANY AND MIKE’S STORY

Tiffany and Mike moved to a new home and had all their mail for warded to the new address. Tiffany notified all their creditors of their new mailing address, but one of the creditors never received her correspondence listing the change.

Several weeks later the credit card company called Tiffany to con firm an order for some toys. It appeared that the billing address didn’t match the mailing address that was given for a purchase. Also the telephone number given didn’t match the telephone number the credit card company had on record.

Tiffany indicated that she had not placed an order for any toys. The credit card company gave Tiffany the name of the toy company that received the order, and the address and telephone of the person who indicated she was Tiffany.

First Tiffany telephoned the store where the order was placed. The woman at the store who took the order indicated that she had just spoken to the person who had placed the order. Tiffany explained that she never placed the order and to cancel it. She then made a telephone call to the number that was given her.

A woman answered the telephone and Tiffany said, “Hello, is this Tiffany? I’m calling to confirm your order for the toys you just ordered to be shipped to this address.”

The woman’s response was, “Yes, I’m Tiffany and the address is correct.”

Tiffany was infuriated with this woman and responded, “You’re not Tiffany, I am, and lady you’re in big trouble.”

The woman hung up. Tiffany immediately called the sheriff, who went to the address that had been given. It turned out to be a hotel, and the woman had just checked out.

The credit card company did not charge or process the order. How ever, if the company had not called Tiffany to confirm the mailing address and telephone number, credit card fraud would have occurred.

It is not uncommon to hear of people stealing credit card statements from mailboxes. Your name, address, and account number is recorded on the statement. It’s enough information for an unscrupulous individual to make purchases with companies who don’t have a tight security system for the credit card orders.

DAMAGED PRODUCT

Q. I received a damaged product from a mail order company. The purchase was made on my credit card. I disputed the amount, but the mail order company still got the money. The credit card company is now reporting my account as a R9 charge-off. The creditors will not cooperate in removing it from my credit report. Help!

When you receive a damaged product, you should immediately telephone the company. Keep a record of the date and time you phoned and with whom you spoke. Get a return authorization number, if that company uses them. Then return the product to the mail order company along with a letter stating the problem. Request a return receipt from your shipper so you can prove the item made it back to the seller. Most reputable companies will replace the damaged product with a new one.

If the company refuses to replace the damaged item, make a written complaint to the company on whose card you charged the item. (Send this dispute letter certified mail with a return receipt.)

You have a right to refuse payment of the item if the credit card company is notified within 60 days from the date the credit card statement was mailed. The credit card company has 30 days to acknowledge receipt of your letter. At this point, the creditor will make the necessary corrections on your account and notify you in writing of the correction or a written explanation of why you are incorrect.

During the time you are disputing your account, you are not required to pay that portion of the bill which you are disputing. The credit card company cannot report you as delinquent on that portion of the bill. It is important to remember when you are disputing a purchase to pay the credit card company what is owed on your other purchases. If you stop paying on your account you risk a poor credit rating.

If you refuse to pay on your account, and did not follow the procedure listed above to dispute the purchase with the mail order company and credit card company, after several months of receiving no payment the credit card company would charge off your account. This would be entered on your credit report.

The best thing for you to do is contact your credit card company and ask them to settle your account. Offer to pay them less than they are re questing in exchange for the entry to be removed entirely from your credit report, or to reflect a paid in full status. You have nothing to lose by making such an offer. If the entry is accurate on your credit report, it can re main on your credit report for seven years.

STOLEN IDENTITY

Q. I received a copy of my credit report and discovered there were several open credit accounts that are not mine. It appears that someone is using my name and Social Security number to open these accounts. What can I do?

It is important to safeguard any documentation that has your name and Social Security number listed. With that information another person can fraudulently open credit card accounts without your knowledge. They get away with it by using a different mailing address for the statement.

Many people have been taken advantage of by someone stealing their identification. Because the information given on the credit application has your name and Social Security number, an account can be opened and re ported to the credit reporting agencies. An individual who has stolen your identity can damage your credit report by not making payments on the accounts that were opened. You would never know this was happening unless you received a copy of your credit report.

To clear this up, contact the credit card company listed on the credit report. The account number on the credit report must be included on any correspondence you send to the creditor.

Most companies have a special customer service department for fraudulent accounts. Explain the situation, mentioning that you never authorized or completed an application for this account. Ask to see a copy of the application that they have on file. The person signing the application will have a different signature from yours.

The credit card company must initiate an investigation. You are not responsible for the charges as long as the company cannot prove the person who initiated and signed the application was you. Criminal charges can be pressed against the person who fraudulently opened this account.

All correspondence you have with the credit card company during this investigation should be mailed certified mail with a return receipt. If you telephone the credit card company, make sure you get the names of any individuals with whom you speak. Keep detailed notes of the date, time, person you spoke with, and what was discussed during the conversation.

Once you have resolved the matter with the credit card company, make sure you get their statement on their letterhead indicating that this is not your account. Insist that they contact all credit reporting agencies, deleting the information. Follow up with a letter requesting removal of the item, with a copy of the letter from the creditor to all three credit reporting agencies. Mail this certified mail with a return receipt. You should get an updated credit report from the credit reporting agencies within 45 days showing they have deleted the item.

LOST WALLET

Q. I lost my wallet and someone started making purchases with my VISA card. Am I responsible?

When you discover that your wallet is lost, the first thing you need to do is immediately contact every credit card company that you have an account with and cancel your cards.

Federal law limits your liability for unauthorized charges made on your credit cards. You must notify the card issuer within a reasonable time, generally within 30 days. You are not responsible for any charges made after the notification. Your personal liability is limited to $50 for charges made prior to notification of the card. Any delay in reporting the loss will cause you to be liable for all charges made on the credit card before the time of notification.

Many credit card companies are imprinting your photo on the credit cards. This is for your protection should your card be lost or stolen. Also you want to always sign the back of all your credit cards. Your signature should then be matched by a merchant whenever you make any purchases. This also is for your protection.

MULTIPLE CHARGES

Q. I received my credit card statement with multiple charges from a hotel that I stayed at. I paid the bill with my credit card but the statement had other charges from the hotel on it that I never authorized. What can I do?

The first thing you want to do is call the credit card company to see who made the charges and if they were referenced by the hotel.

Then call the hotel with the information that you have and ask them to verify the charges. Many times when a reservation is made and you check in at a hotel, the hotel will put a hold on your credit card for the amount of days you will be staying. If the amount they are trying to hold is too large and the credit card company does not accept the hold, the hotel will try using smaller increments of funds. For example, if the estimated bill is $200 and your credit card won’t accept $200, the hotel will try to put $50 increments onto the card to total the $200.

Frequently, when you go to check out, the hold on your credit card is not lifted for several days. Therefore, what appears on your statement is the small increment charges that were used to hold your account, plus the charges you actually made while staying at the hotel.

If you discover that the hotel has not released the hold on your credit card, instruct the hotel to contact your credit card company immediately and initiate the release of the hold. This should credit your account with the amount of money that was placed on hold.

Contact the credit card company within five days of your call from the hotel to verify that the hold was withdrawn. If it has not been withdrawn, send a letter to the credit card company and hotel refusing to pay for the charge.

BILLING ERRORS

Q. I received my American Express credit card statement and noticed a charge at a hotel I never stayed at. I contacted American Express and they indicated they would investigate and correct the mistake. How long does that take?

It is important that you always review your credit card statements to make sure there are no errors on it. Many people get their monthly statement and never look at the charges on it.

Don’t assume that your complaint will be handled by a mere telephone call. It is important that you write American Express a letter indicating the billing error. The letter must be sent within 60 days from the date the statement was mailed (check the postmark). This letter should be sent certified mail with a return receipt.

According to the Fair Credit Billing Act, if a complaint of a billing error is mailed to an institution, the institution has 30 days to acknowledge receipt of your letter. During that time period the creditor will make the necessary corrections on your account and notify you in writing of the correction. If the creditor discovers that there was no error, it must send you a written explanation of why you are incorrect. If the creditor indicates that you are incorrect, it must provide you with documentation to support its findings.

During the time that you are disputing the bill, the creditor cannot re port your account delinquent to any credit reporting agency and cannot pursue collection activity on the disputed amount. A dispute with the creditor regarding an error must not take any longer to settle than two billing cycles or a 90-day period, whichever is longer.

MY FATHER’S STORY

Several years ago I was visiting my father. He took me out to dinner to a well-respected restaurant in Hollywood , paying for dinner with a credit card.

Two weeks after our dinner together he received a telephone call from the credit card company that he charged the restaurant bill to. The company indicated that there had been multiple purchases made on his credit card and they wanted to confirm that he was the one making these charges. After reviewing the charges that were made, it was discovered that someone had been making these purchases without my father’s knowledge.

As we retraced the purchases, it appeared that when he had charged our dinner, he was given a carbon copy that he didn’t destroy. The carbon copy was tossed into the restaurant’s trash and someone had retrieved it. The numbers on the carbon copy was his account number with his name and signature.

This made dad an easy target for credit card fraud. The person who had stolen the carbon copy was using the account number to make purchases.

Once this was discovered, the credit card company canceled the card and issued dad a new one. The credit card company did not charge him for the purchases, hut it was a valuable lesson for all of us. Never leave receipts or their carbons lying around. You never know who may get a hold of your account number.

TIPS TO AVOID CREDIT CARD FRAUD

1. Always destroy your carbon copies.

2. Keep all receipts with your credit card numbers in a safe place or destroy them.

3. Never give out your name, address, or Social Security number to anyone on the telephone or in person unless you know what they will be doing with the information.

4. If you move, always contact your creditors immediately with your new address and have all your mail forwarded.

Next: Problems from Cosigning for a Loan

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