FTC FACTSfor Consumers

CREDIT

1-877-FTC-HELP

FEDERAL TRADE COMMISSION FOR THE CONSUMER

www.ftc.gov

Billed for Merchandise You Never

Received?

S

You found the perfect set of linens in a mail order catalog. You call to place your

order and charge it to your credit card. You’re told that your linens should arrive

in two weeks. Two weeks go by, then three and four, and still no linens. What

you do get is your credit card bill with a charge from the catalog company.

o, just what do you do when you get a credit card bill but no

merchandise? Get frustrated, to be sure.

But the error can be corrected. The Fair Credit Billing Act (FCBA) and the

Mail or Telephone Order Merchandise Rule offer protections and procedures for

consumers so they donít have to pay for merchandise they ordered but never

received.

In addition, many credit card issuers have policies against merchants charging a

credit card account before shipment. If you think a merchant charged your

account prematurely, report it to the credit card issuer. Otherwise, the credit

card issuer has no way to know that the merchant is not complying with its

policies.

THE FAIR CREDIT BILLING ACT

To dispute a billing error on your credit card, you must:

ï Write to the credit card issuer at the address for ìbilling inquiries,î not the

address for sending your payments (the address for billing inquiries is often

found on the back of your most recent monthly statement); include your

name, address, account number and a description of the billing error. A

sample letter is included on page 3.

ï Send your letter so that it reaches the credit card issuer within 60 days after

the first bill containing the error was mailed to you.

ï Send your letter by certified mail, return receipt requested, so you have

proof of what the credit card issuer received. Include copies (not originals)

of sales slips or other documents that support your position. Keep a copy of

your dispute letter.

ï It is important to send the letter to the correct company. In the case of Visa

Hereís What To Do.

NEVER

RECEIVED
Facts for Consumers

and MasterCard, you should send it to the

bank that issued the card.

The credit card issuer must acknowledge your

complaint in writing within 30 days after

receiving it, unless the problem has already

been resolved. And the credit card issuer must

resolve the dispute within two billing cycles

(but not more than 90 days) after receiving

your letter.

What happens while your bill is in dispute?

You may withhold payment on the disputed

amount (and related charges), during the investigation, but you must pay any part of the bill

not in question, including any finance charges

on the undisputed amount.

The credit card issuer may not take any legal or

other action to collect the disputed amount and

the related charges (including finance charges)

during the investigation. While your account

cannot be closed or restricted, the disputed

amount may be applied against your credit

limit.

You placed an order with a catalog company

and they charged your credit card immediately.

The catalog company contacts you two weeks

later and says the shipment will be delayed 60

days. You agree to the delay. The 60 days

have passed and you don’t have the merchandise. Can you still dispute the charge?

Maybe. In delayed shipment situations, credit

card issuers often are more generous when they

calculate the time for allowing disputes. To

take advantage of this flexibility, include the

following information in your dispute letter.

ï Tell the credit card issuer if the premature charge was unexpected. Some credit

card issuers make an exception to the

general industry rule against merchants

charging before shipping if the merchant

tells you about its practice at the time of

sale. If youíre certain the merchant said

nothing or wasnít clear about its charge

practice, the credit card issuer is more

likely to allow the dispute.

ï Tell the credit card issuer when delivery

was expected. In no delivery situations,

some credit card issuers will use the expected date of delivery rather than the

charge date as the start time for you to

dispute charges. If you dispute the charge

within a reasonable time after the expected

delivery date passes, chances are good that

the credit card issuer will honor the dispute.

When you order or when a merchant notifies you of delayed shipment, itís important

to keep a record of the promised shipment

or delivery date. Include a copy of any

documentation of the shipment or delivery

date when disputing the charge with your

credit card issuer.

What if you used a debit card to pay for the

merchandise? The consumer protections for a

debit card fall under the Electronic Fund Transfer Act and may differ from protections for a

credit card under the FCBA. So you may not

be able to dispute a debit and get a refund for

nondelivery or late delivery. Still, some debit

card issuers voluntarily offer protections and

solutions to problems like the failure to receive

merchandise bought with a debit card. Contact

your debit card issuer for more information

about particular policies and protections.

What if you financed your purchase through

the merchant? If you financed your purchase

through the merchant, you also may have

protections under state and federal law. Check

your credit contract for the following language:

Notice: Any holder of this consumer credit

contract is subject to all claims and defenses

which the debtor could assert against the seller

of goods or services obtained with the proceeds

hereof. It means that you may be able to claim

that the seller failed to deliver the goods as

stated in your credit contract.
Facts for Consumers

SAMPLE DISPUTE LETTER merchants to have a reasonable basis for claiming they can ship an order within a certain

time.

SHIP DATES

ï By law, a merchant should ship your order

within the time stated in its ads or over the

phone. If the merchant doesnít promise a

time, you can expect it to ship your order

within 30 days.

ï The shipment ìclockî begins when the

merchant receives a ìproperly completed

order.î That includes your name, address

and payment (check, money order or authorization to charge an existing credit account

ó whether the account is debited at that

time or not).

ï If the merchant doesnít promise a shipping

time and you are applying for credit to pay

for your purchase, the merchant has an

additional 20 days (50 days total) to establish the account and ship the merchandise.

DELAYS

If the merchant is unable to ship within the

promised time, it must notify you by mail,

telephone, or email, give a revised shipping

date and give you the chance to cancel for a

full refund or accept the new shipping date.

The merchant also must give you some way to

exercise the cancellation option for free, for

example, by supplying a prepaid reply card or

staffing a toll-free telephone number.

ï If you ignore the option notice, and the

delay is 30 days or less, itís assumed that

you accept the delay and are willing to wait

for the merchandise.

ï If you do not respond ó and the delay is

more than 30 days ó the order must be

canceled by the 30th day of the delay period

and a full refund issued promptly.

If the merchant canít meet the revised shipping

date, it must notify you again by mail, email or

Date

Your Name

Your Address, City, State, Zip Code

Your Account Number

Name of Credit Card Issuer

Billing Inquiries

Address, City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute a billing error in the

amount of $______on my account. The

amount is inaccurate because the merchandise I ordered was not delivered. I ordered

the merchandise on (date) . The merchant

promised to deliver the merchandise to me on

 (date) , and the merchandise was not

delivered. (In addition, when I ordered the

merchandise, the merchant did not tell me

that it would charge before shipping.)

I am requesting that the error be corrected,

that any finance and other charges related to

the disputed amount be credited to my account, and that I receive an accurate statement.

Enclosed are copies of (use this sentence to

describe any enclosed information, such as

sales slips, payment records, documentation

of shipment or delivery dates) supporting my

position and experience. Please correct the

billing error promptly.

Sincerely,

Your name

Enclosures: (List what you are enclosing.)

THE MAIL OR TELEPHONE ORDER

MERCHANDISE RULE

This rule covers merchandise you order by

mail, telephone, computer and fax. It requires
January 2002

F C EDERAL RADE OMMISSION T FTC OR HE ONSUMER

1-877-FTC-HELP www.ftc.gov

Facts for Consumers

telephone and give you a new shipping date or

cancel your order and give you a refund.

ï The order will be canceled and a refund

issued promptly unless you indicate by the

revised shipping date that you are willing to

wait.

ï If you do not respond at all to the second

notice, itís assumed that you are not willing

to wait, and a full refund must be issued

promptly.

REFUNDS

ï If you authorized a charge to your credit

card account, the merchant must credit the

account within one billing cycle ó not give

credit toward another purchase. If you pay

by cash, check or money order, the merchant must mail you a refund within seven

working days.

TIPS FOR SHOPPING BY PHONE, MAIL

OR ONLINE

ï Consider your experience with the company or its general reputation before you

order. If youíve never heard of the seller,

check on its physical location and reputation

with the local Better Business Bureau or the

state Attorney Generalís office.

ï Ask about the companyís refund and

return policies, the productís availability

and the total cost of your order before you

place your order.

ï Get a shipment date.

ï Keep records of your order, such as the

ad or catalog from which you ordered; the

companyís name, address and phone number; any shipment representation the company made to you and when it made it; the

date of your order; a copy of the order form

you sent to the company or, if youíre

ordering by phone, a list of the items and

their stock codes and the order confirmation

code; your canceled check or the charge or

debit statement showing the charge for your

order; and any communications to or from

the company.

ï Track your purchases. When you order

online, keep printouts of the web pages

with the details of the transaction, including

the merchantís return policies, in case

youíre not satisfied.

CONTACTS FOR RESOLVING PROBLEMS

If you have other problems with your purchase,

try to resolve your dispute with the company. If

that doesnít work, the following resources may

be helpful:

ï State and local consumer protection offices.

Contact the offices in your home state and

where the company is located.

ï The Direct Marketing Association (DMA).

Write:

DMA Mail Order Action Line

1111 19th Street, N.W., Suite 1100

Washington, D.C. 20036-3603

ï Postal Inspectors. Call your local post

office and ask for the Inspector-in-Charge.

Remember to file your complaint with the

Federal Trade Commission (FTC). The FTC

works for the consumer to prevent fraudulent,

deceptive and unfair business practices in the

marketplace and to provide information to help

consumers spot, stop and avoid them. To file a

complaint or to get free information on consumer issues, visit www.ftc.gov or call tollfree, 1-877-FTC-HELP (1-877-382-4357);

TTY: 1-866-653-4261. The FTC enters

Internet, telemarketing, identity theft and other

fraud-related complaints into Consumer Sentinel, a secure, online database available to

hundreds of civil and criminal law enforcement

agencies in the U.S. and abroad.