By Elliot Raphaelson

When you buy a product or pay for a service but end up dissatisfied with the quality or the fairness of the transaction, often the best way to resolve the problem is to complain politely to management. A wise company will do what it takes to make you happy. But in cases where they do not, there is a federal law that may protect you: the Fair Credit Billing Act. I have taken advantage of it several times, and so can you.

The law only applies under certain conditions:

-- The transaction must cost at least $50.

-- The service provider/seller must be located in your home state or within 100 miles of your mailing address.

-- The customer must use a credit card, not a debit card, not cash and not a check.

-- If the customer is dissatisfied, he must first complain in writing to the provider or the seller of the product in writing. If the customer isn't satisfied with the response, he must then write to the credit card company, documenting the problem.

-- No part of the disputed charge should be paid to the credit card company. (For example, if your total credit card bill that month is $1,000, and the disputed charge is $500, you should pay only $500, documenting why you are withholding payment.)

After the credit card company receives the customer complaint, the credit card company notifies the service provider regarding the dispute. The provider has 30 days to respond. If he does not respond within 30 days, the credit card company will reverse the charge. If the provider does respond, the credit card company will then determine how much, if any, of the disputed amount is justified.

Consider these examples of how the process works. A few years ago my son, Mark, was having car problems in Orlando, Fla. He brought his car to a dealer, who told him he had transmission problems. He accepted the dealer's diagnosis and had the car fixed for $1,200. He charged the bill with VISA. But after the repair, the problem persisted, so Mark returned the car to the dealer, who then told him it was a different problem and that it would cost several hundred dollars more to fix. Mark then took the car to a different mechanic, who told him that the initial diagnosis was incorrect. Mark had the car fixed by the new mechanic for substantially less than the new estimate he had received from the original dealer. He returned to the original dealer, with documentation, and asked for a refund. He received no satisfaction, so he notified VISA following the guidelines of the Fair Billing Act. The dealer was notified by VISA of the complaint, but did not respond within 30 days. VISA reversed the $1,200 charge.

A few years ago, my wife and I took a cruise from Florida. I paid by credit card. I overheard cruise personnel discussing the fact that the cruise was overbooked. As a result of the overbooking, there were interminable lines, insufficient seating and insufficient food. I complained in writing to the cruise line, indicating that, because of the overbooking, there was poor service. I received no response from the cruise line. Accordingly, I documented my dispute to VISA, indicating that I thought I should pay no more than 50 percent of the advertised cost of the cruise. VISA forwarded my dispute to the cruise line. The cruise line did respond to VISA within 30 days, but VISA did not accept its explanation. VISA accepted my argument, and I was only charged 50 percent of the initial price. A few months later, the cruise line tried to charge my credit card for the 50 percent it hadn't received. I notified VISA, and VISA promptly deleted that charge from my account.

Here's the bottom line: When you enter into a transaction that involves a significant amount of money, protect yourself. Always use a credit card. If you have any complaints, document them in writing to the provider/seller. If you do not receive satisfaction, send all your documentation to your credit card company. Do not pay any of the amount in dispute to the credit card company until the company has adjudicated your dispute.

You have nothing to lose, and much to gain.

Available at Amazon.com:

Lifecycle Investing: A New, Safe, and Audacious Way to Improve the Performance of Your Retirement Portfolio

Worry-Free Investing: A Safe Approach to Achieving Your Lifetime Financial Goals

Spend 'Til the End: The Revolutionary Guide to Raising Your Living Standard--Today and When You Retire

The Hard Times Guide to Retirement Security: Practical Strategies for Money, Work, and Living

Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back

Happy at Work, Happy at Home: The Girl's Guide to Being a Working Mom

 

Personal Finance - Consumer-Protection Law Steps in Where Responsible Merchants Do Not

© ELLIOT RAPHAELSON. DISTRIBUTED BY TRIBUNE MEDIA SERVICES, INC.