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- Frequently Asked Questions (FAQS);faqs.215
-
-
-
- That depends. Most hotels and motels (but not all) subscribe to the
- "Lodging Services Addendum" in their merchant agreement with Visa.
- If the hotel is one that participates, and they have no room for you
- when you arrive with a guaranteed reservation, their agreement with
- Visa requires them to:
-
- - Provide the cardholder with at least comparable accommodations for
- one night at another establishment.
-
- - Provide transportation for the cardholder to that establishment.
-
- - If requested, allow the cardholder to make a 3-minute local or
- long distance call.
-
- - If requested, forward all messages and calls for the cardholder to
- the alternate establishment.
-
- (source: Lodging Services Addendum to Visa agreement of First Bank
- System, as quoted in a Usenet posting)
-
- However, your unsupported word is not exactly proof that you had a
- reservation. Next time, write down the date and time you called,
- the rate you were quoted, which credit card you used for the
- guarantee, and the confirmation number. (You may have to ask for a
- confirmation number.) You need that info if there's a problem with
- your reservation, or if your plans change and you have to cancel.
-
- Some state laws may protect you when you have a guaranteed reserva-
- tion, whether you guaranteed it by a deposit or by credit card.
-
- Q408. I paid by check, and the merchant wrote my credit-card number on
- the back. If the check bounces, can the merchant charge my card?
-
- The answer to this one boils down to "There are two kinds of
- prevention, and an ounce of either is worth a pound of cure."
-
- First, in CA, DE, FL, GA, IA, IL, KS, MD, MN, ND, NJ, NV, NY, OH, VA,
- and WA it's illegal for merchants even to write your credit-card
- number on your check, so don't let them do it. (Note: In Illinois,
- they can request a look at your card, but can't write the number on
- your check. They CAN write the type of card and expiration date)
- Source: Bankcard Holders of America. (I understand some banks are
- tying check guarantees to their credit cards. I don't know whether
- that's legal in the above states, but it seems to be a bad idea. If my
- bank did that, I would question them closely about the potential for
- fraud in using the same number for my credit cards as for check
- guarantees. Giving someone your credit- card number with your name
- and address -- possibly even your phone number -- on a printed check is
- an open invitation to scam artists.)
-
- Second, In states other than those listed above, the merchant has
- the legal right to refuse the sale if you refuse to give the
- informa- tion. However, Visa, MasterCard, and American Express all
- forbid merchants to charge a credit-card account to cover a bounced
- check, or to use card numbers to locate a customer whose check
- bounces. Since the merchant can't do anything legitimate with the
- card number, and since providing it makes you a possible victim of
- fraud, you should politely decline. One possible compromise, if
- you're at an impasse, would be to show the card with your name on
- it, but to cover up all or part of the card number and to insist
- that no part of the number be written down. Source: Bankcard
- Holders of America. (The situation may be different if your credit
- card is also a check-guarantee card; see the preceding paragraph for
- cautions.)
-
- Nearly 90% of bounced checks are due to consumers' math errors in
- balancing their checkbooks. Despite this, the law in some states is
- that if you bounce a check it is assumed to be deliberate unless you
- can prove otherwise, and deliberately bouncing a check is a crime in
- every state.
-
- It's better never to get into this hassle than to deal with it after
- the fact. If you've got credit cards, why pay by check at all?
- (See "Is it better to pay by check?" earlier in this section.) If
- you do pay by check, don't give a credit-card number. And if you
- bounce a check, don't make the merchant come to you but go to the
- merchant immediately to make things right. Give the merchant a good
- check (probably a cashier's check) or cash for the amount of the
- purchase, and expect to pay a reasonable fee to the merchant in
- addition to your bank's fee.
-
- Q409. Can mail-order merchants charge my card before they ship?
-
- According to Janet Hug of Visa USA, "a merchant is not permitted to
- bill ahead of time" except in case of a deposit or down payment that
- the customer agrees to. (phone call from Visa USA, 12 May 1992)
-
- MasterCard said in a letter that a merchant can charge you before
- shipment only if s/he tells you and you agree to "the terms and
- conditions of the sale."
-
- American Express said the merchant can charge your card as soon as
- you give your account number; but if you receive the bill before the
- merchandise, call Amex customer service and you don't have to pay
- while they investigate. (phone call to Amex, 16 May 1992)
-
- Q410. Is there any official document that I can take with me to show
- merchants who violate the rules?
-
- Yes, the Bankcard Holders of America includes a wallet-sized
- Consumer Action Card with its pamphlet #14, "Consumer Rights at the
- Cash Register." For a copy, send $3 to BHA, 560 Herndon Parkway
- suite 120, Herndon VA 22070, or call (800) 553-8025 and ask for a
- catalog. The card gives you something to show the merchant who
- won't believe your unsupported word. The card has no legal force,
- but at least you don't look like you're making things up. The
- pamphlet does the same thing, but an 11"x17" piece of paper gets
- kind of bulky folded in your wallet!
-
- Also see the pamphlets mentioned at the beginning of this file,
- which are issued by the Federal Reserve. That should be official
- enough for any merchant.
-
- Q411. Where should I report merchants who break the rules?
-
- If merchants violate any of the above laws, you can report them to
- your state's or city's consumer protection office or attorney
- general. If they violate any rules of American Express, the company
- would like to know about it. Report violations of Visa or
- MasterCard rules to the bank that issued your card; if the sale was
- completed, and you can also send a letter with a copy of the charge
- slip to the Visa or MC address given earlier in this section.
-
- Q412. Does my payment have to reach the lender by the "due date" on the
- bill, or is it enough if I just mail it by the due date?
-
- That's a good question, and the answer varies. The Uniform Commer-
- cial Code says that a bill is considered paid on the postmark date
- of the payment, but many states have different laws. Even in states
- where the bill is considered legally paid on the postmark date, you
- may find that lenders will consider it paid on the date they process
- it.
-
- My personal practice is to avoid hassles by always mailing payment a
- reasonable time before the due date. Even if I could push it
- legally, I don't believe the couple extra days of "float" is worth
- the aggravation of fighting with the lender over this point.
-
- Q413. I have a checking or savings account at the same bank as my Visa
- or MasterCard. Can the bank freeze my account or take money from
- it if I miss a payment on my credit card bill?
-
- Probably yes. You should check your cardholder agreement. The
- typical agreement gives the bank the right to take the money in any
- of your accounts with them if you are delinquent on your bill. Even
- if there's not such a provision in your cardholder agreement, it's
- probably buried somewhere in the fine print that governs your
- deposit account.
-
- However, the Fair Credit Billing Act does not let them take any
- collection action at all if you have properly notified them of a
- dispute; see section 5, "Billing errors and overcharges."
-
-
- section 5. Billing errors and overcharges
- =========================================
-
- The U.S. Fair Credit Billing Act governs credit billing, and gives savvy
- consumers a lot of leverage when they are treated unfairly.
-
- Q501. What kind of problems am I protected against?
-
- The Fair Credit Billing Act protects you from honest errors and
- outright fraud by merchants when you make the purchase through a
- bank credit card. These include
-
- - billing errors
- - charges for goods ordered but never shipped
- - charges higher than agreed
- - charges for goods not shipped as ordered
- - charges for products that don't work as represented
- - charges for unsatisfactory services
-
- and similar kinds of problems.
-
- Q502. There's an error on my bill. What should I do?
-
- The instructions are printed on your bill, probably on the back.
- Just follow them. The rules are simple: if you report a problem in
- writing within 60 days of the billing date, the bank must
- investigate it and respond to you within 30 days. While they are
- investigating, you don't have to pay the disputed amount or any
- finance charges on it. If their investigation shows the item was
- correct, they can restore finance charges retroactively and you will
- have to pay them.
-
- The address to write to is on the bill. Look for a heading like "In
- case of error" or "Send inquiries to."
-
- Some banks try to resolve problems over the phone; others insist
- that you write a letter. If you decide to call before writing, make
- sure you note the date and time of the call, whom you talked to, and
- what s/he promised to do (if anything). Then send a letter to the
- "Send inquiries to" address mentioning this information. (Your
- letter should make clear that you are confirming a telephone
- conversation, so that the bank doesn't try twice to resolve the same
- problem.)
-
- If you resolve a problem by phone, but the bank doesn't follow
- through, the confirming letter that you sent will preserve your
- rights.
-
- Q503. I got ripped off by the merchant. What should I do?
-
- This is any situation listed at the beginning of this section,
- except billing errors. Fortunately, the U.S. Fair Credit Billing
- Act gives you strong protection if you used a credit card. Because
- this comes up so frequently, and people are understandably emotional
- when they think they've been cheated, I've divided up the answer
- into several pieces that follow.
-
- The legal language is on the back of your bill, under "Special rule
- for credit card purchases."
-
- Q504. Exactly which purchases qualify under the Fair Credit Billing Act?
-
- You are protected if all of the following are true:
-
- - The purchase was made with a credit card. (If it was a debit
- card, the money is already gone from your account and the bank
- won't get involved.)
-
- - The amount charged is more than $50. (The amount in dispute could
- be less, for example if you bought a $90 lamp but were billed
- $100. The amount in dispute is $10.)
-
- - You made the purchase somewhere in your home state, or within 100
- miles of your mailing address. (I am not an attorney, but my
- understanding is that if you are having goods shipped to you by
- mail or phone order, the place of purchase is the address you are
- having them shipped to.)
-
- If some of the above are not true, you are still protected if the
- credit-card company owns or operates the merchant, or the credit-
- card company mailed you the advertisement for what you bought. In
- that case your purchase is covered by the rules no matter where you
- bought or how much you paid.
-
- In addition, you MAY successfully protest charges outside of these
- parameters, but there is no legal requirement for the credit card
- company to do so.
-
- Q505. Will the bank get involved right away?
-
- No. Under the law, first you must try "in good faith" to resolve
- the problem directly with the seller.
-
- Q506. What does resolving a problem "in good faith" mean?
-
- "In good faith" is not defined in the law, but in practice it means
- that you act like a reasonable person and the merchant is expected
- to act reasonable too.
-
- At a minimum you should talk to the merchant's customer service
- department and send a follow-up letter. You have to allow the
- merchant a reasonable time to respond. What's reasonable? Depends
- on circumstances. Enough time for mail to go both ways, plus a
- couple of working days.
-
- "In good faith" also means that you act promptly. Don't wait three
- months after the charge shows up on your bill to complain that you
- never got what you ordered.
-
- Back orders are a frequent problem. If the merchant tells you the
- stuff is back ordered, you have the right to cancel the order. (If
- it's mail order, they're supposed to give you a postage-paid reply
- card for this.) Then you can tell the merchant you don't want to
- wait and ask for the charge to be cancelled. This may not happen
- the same day, but it should be reasonably prompt. Wait a few days
- and call the bank to see if the credit has come through yet.
-
- Q507. Any other hints for dealing with a problem merchant?
-
- Most important, remember that the person you are talking to is
- probably not the person who caused the problem. Don't yell. (In a
- letter, don't use lots of capital letters and don't run on at great
- length.) Don't sound crazy or make threats.
-
- Lots of good people work for bad companies. Lots work for good
- companies that make an occasional mistake. You may be lucky and
- deal with one of them. If your approach is "You dirty rotten
- so-and-so" you probably won't get anywhere. If your approach is
- "There's a problem here; can you help me?" you'll have a better
- chance.
-
- Be prepared with specific information before you call. Have all the
- paper work in hand. Make sure you can give the date ordered, what
- you ordered (item number and price), when you were promised the
- items, your credit card number, how much you were charged. Be clear
- about exactly what you want. A refund? a replacement? shipment by
- a certain date? repairs? Most people (not all) respond best if you
- tell them clearly and calmly what you want and if you sound
- reasonable.
-
- Q508. I tried in good faith, but the merchant won't budge. Can the bank
- help?
-
- Yes, and in fact the law says the bank _must_ help. (The banks all
- know this, and most will be very helpful. Don't expect a fight.)
-
- Write to the credit-card issuer and ask for a credit. (This is
- called a chargeback, but you don't need to use the word.) Use the
- same address as for billing errors--see "There's an error in my
- bill," earlier in this section. Make sure you give these important
- facts in the letter:
-
- - date you are writing the letter
-
- - your name and address, as they appear on the bill
-
- - your account number, and the statement date on the bill
-
- - Start with "I am writing about a problem with (company name).
- The transaction date was (mm/dd), the posting date was (mm/dd),
- and the transaction amount was $(amount)."
-
- - Then explain, clearly and briefly, what's wrong.
-
- - Next, state that you tried in good faith to resolve the problem
- directly with the merchant, but did not succeed. List dates you
- made phone calls and what was said by the merchant; enclose
- photocopies of your letters to the merchant and its response.
- (Don't overload the bank with this. You're showing that you acted
- in good faith; don't write a novel.)
-
- Q509. What does the bank do when I ask for a chargeback?
-
- The bank will credit your account and charge the amount back to the
- merchant. This must happen within one billing cycle, if you have
- done everything you were supposed to. If the merchant doesn't
- respond, the amount is gone from your bill forever.
-
- If the merchant disputes the chargeback, the bank has to decide who
- is telling the truth. If you don't like the decision, you can go to
- court or pursue other remedies that are beyond the scope of these
- FAQs.
-
- Q510. What happens to finance charges on the disputed amount?
-
- You don't have to pay them while the bank is investigating.
-
- When the bank credits your account, they are also supposed to credit
- your account with any finance charges that were assessed on the
- disputed amount before you wrote to them. They may or may not do
- this without further prompting from you.
-
- Again, if the disputed charge is later found to be correct, you will
- have to pay finance charges on it.
-
- Q511. What if I paid my bill in full before I noticed a problem?
-
- Strictly speaking, the Fair Credit Billing Act says you may not have
- to pay "the remaining amount due." However, I and some other
- consumers have found that our banks aren't quite so picky.
-
- My advice (and remember I am not a lawyer) is to follow the standard
- procedures for disputing a charge and simply not to bring up the
- issue of whether you've already paid part or all of it. Odds are,
- your bank won't raise that issue either.
-
- However... It's best to examine bills carefully before you pay
- them. If you question a charge on the 58th day, a month or more
- after you've already paid it, the bank is entitled to wonder if
- you're really acting "in good faith" as the law requires.
-
- Q512. How do I avoid problems with unauthorized charges?
-
- From the Wall Street Journal, Friday, July 17, page C1
-
- "If you find that someone else has used your credit card number,
- write to the card issuer and specify that an "unauthorized charge"
- was made. If you don't use those words, the issuer will most likely
- treat the incident as a "billing error," says Ms. Butler of Bankcard
- Holders.
-
- There's a big difference. While a billing error must be reported
- within 60 days, there are no time limits for reporting unauthorized
- charges. Most people don't get this straight: in fact, a brochure
- prepared by the Federal Trade Commission and a pamphlet prepared by
- American Express incorrectly say that cardholders should report
- unauthorized transactions as billing errors--and that they have only
- 60 days to do so. A spokeswoman for American Express says its
- information came from the FTC; a lawyer for the FTC says the agency
- is now aware of the mistake.
-
- The most a cardholder will be liable for if someone used their card
- is $50, the FTC lawyer says; if the card is not used in the
- transaction, the cardholder won't have to pay any of it."
-
-
- I believe that last bit, about "if the card is not used," refers
- to people who find your number somewhere and place orders over the
- phone, where they give the number but don't have the actual card.]
-
- The article also has a useful sidebar (is that the word?) called
- "Preventing Crooks from Getting Your Numbers":
-
- "When traveling:
- "-- Ask for carbons of car rental agreement, and destroy. Don't
- leave rental agreement in car where thieves can get it.
- "-- Shred travel itineraries and ticket receipts issued by
- airlines and travel agents.
- "When at shops and restaurants:
- "-- Refuse to write address and phone number on credit slips, or
- credit card account numbers on checks.
- "-- Don't let clerk write your driver's license number on your
- check if it's the same as your Social Security number.
- "When using a calling card:
- "-- Don't use a personal identification number, or PIN, that's
- obvious, such as a birth date, work extension, or consecutive
- numbers.
- "-- Cover the phone with your body to prevent anyone from seeing
- what you dial; if you must tell an operator your account
- number, assume people are eavesdropping.
- "When at home:
- "-- Destroy all pre-approved credit card applications; when
- cleaning files, shred old statements, pay stubs, and checks.
- "-- Don't give card numbers to callers who say you've won a prize.
- "-- If monthly statement doesn't arrive on time, call the issuer
- immediately."
-
-
- section 6. Miscellaneous credit-card stuff
- ==========================================
-
- Q601. What do the digits in my credit-card number mean?
-
- ANSI Standard X4.13-1983 answers this question for most national
- systems. (Phone, gas, and department-store cards have their own
- numbering schemes.) I have not read ANSI X4.13, but a correspondent
- was kind enough to provide excerpts, which follow.
-
- The first digit is the system: 3=T&E cards, 4=Visa, 5=MasterCard.
- (I have a Discover, and *my* card begins with a 6. I do not know if
- this is uniformly true.) The structure of the card number varies by
- system.
-
- - American Express starts with 37; Carte Blanche and Diners Club
- with 38. For Amex, digits 3-4 are type and currency, digits 5-11
- are account number, digits 12-14 are card number within account,
- and digit 15 is a check digit.
-
- - Visa: digits 2-6 are the bank number; digits 7-12 or 7-15 are the
- account number, and digit 13 or 16 is a check digit.
-
- - MasterCard: digits 2-3, 2-4, 2-5, or 2-6 are the bank number,
- depending on whether digit 2 is a 1, 2, 3, or something else. The
- digits after the bank number up through digit 15 are the account
- number, and digit 16 is a check digit.
-
- Q602. I lost my credit card, or it was stolen. What should I do?
-
- Call the issuer right away. Somewhere in the papers that came with
- the card is an 800 number to call. If you can't find those papers,
- look on a current bill and call the "inquiries" number there. If
- you can't find a current bill, look up the bank's number in the
- phone book (or call Information) and they'll direct you how to make
- a report.
-
- The important thing is to move fast. Once you have reported the
- card lost or stolen, you are not liable for any further charges on
- the account.
-
- Q603. What is the 800 number for customer service?
-
- For Discover, it's (800) 347-2683, a/k/a 800-DISCOVEr.
-
- For American Express, it's (800) 528-4800 for green card, or for
- gold card (800) 327-2177.
-
- For Visa and MasterCard, each issuing bank handles service of its
- own customers. First check the obvious: the number may be printed
- somewhere in your bill, or on a page in the packet of stuff the card
- company sent you when you enrolled. Or, if it's a local bank, check
- the white pages of your phone book. If the bank is not local, try
- (800) 555-1212 (it's free) to find if the bank maintains an 800
- number; many do. Alternatively, larger public libraries have
- banking directories and can probably give you the information at the
- reference desk or by phone.
-
- Q604. Why was I turned down for a credit card?
-
- See sections 7, 8, and 9 in part 3 of this list, which deal with
- your credit history, credit reports, and credit bureaus.
-
- Q605. Should I give my credit-card number over the phone?
-
- One big question is: did you call them or did they call you? You
- should never give your credit-card number to anyone who calls you.
- Such a call is almost certainly a scam. This is true even if
- (especially if) the caller claims to be from your card issuer.
- Anyone from the issuer who legitimately has your phone number also
- has the rest of your records, including your card number.
-
- If you're making a call in response to a postcard from some company
- you never heard of, be very wary. There have been a lot of frauds
- reported where the victim gave a credit-card number and found lots
- of unauthorized charges on the next month's bill. I'm sure that
- some of these "you've won a free trip, just give us your card number
- for the $149 processing fee" offers are legitimate: but how can you
- tell over the phone?
-
- Of course, if you're calling an established mail-order company,
- giving them your card number is as safe as anything is these days!
-
- Q606. What may creditors do? Fair Debt Collection Act.
-
- Credit-card debt, like any other debt, does not give your creditors
- license to harass you. There is a Federal law, the Fair Debt
- Collection Practices Act; your state may afford you additional legal
- protections. The U.S. Fair Debt Collection Practices Act forbids
- these collection actions, among others:
-
-
- o The use or threat of use of violence or other criminal means to
- harm the physical person, reputation or property of any person.
-
- o The use of obscene or profane language or language the natural
- consequence of which is to abuse the hearer or reader.
-
- o Causing a telephone to ring or engaging any person in telephone
- conversation repeatedly or continuously with intent to annoy,
- abuse, or harass any person at the called number.
-
- o The false representation or implication that the debt collector
- is vouched for, bonded by, or affiliated with the United States
- or any State, including the use of any badge, uniform, or
- facsimile thereof.
-
- o The false representation or implication that any individual is
- an attorney or that any communication is from an attorney.
-
- o The representation or implication that nonpayment of any debt
- will result in the arrest or imprisonment of any person or the
- seizure, garnishment, attachment or sale of any property or
- wages of any person, when such action is unlawful or the debt
- collector does not intend to take such action.
-
- o The false representation or implication that the consumer
- committed any crime or other personal conduct, in order to
- disgrace the consumer.
-
- o Communicating or threatening to communicate to any person credit
- information which is known or which should be known to be false,
- including the failure to communicate that a disputed debt is
- disputed.
-
- o The use or distribution of any written communication which
- simulates or is falsely represented to be a document authorized,
- issued, or approved by any court, official, or agency of the
- United States or any State, or which creates a false impression
- as to its source, authorization, or approval.
-
- o The false representation or implication that accounts have been
- turned over to innocent purchasers for value.
-
- o The false representation or implication that documents are legal
- process.
-
- o The false representation or implication that documents are *not*
- legal process forms or do not require action by the consumer.
-
- o Communication with debtor at unusual or known-inconvient time or
- place.
-
- o Communication with third parties without debtor consent.
-
- o False or Misleading Representations including
-
- + The threat to take any action that cannot legally be taken
- or that is not intended to be taken.
-
- + Communication or threatening to communicate to any person credit
- information which is known or which should be known to be false,
- including the failure to communicate that a disputed debt is
- disputed.
-
- + The use or distribution of any written communication which
- simulates or is falsesly represented to be a document
- authorized, issued, or approved by any court, official, or
- agency of the United States or any State, or which creates
- a false impression as to its source, authorization, or
- approval.
-
- The FRB puts out a free pamphlet titled {The Fair Debt Collection
- Practices Act}. For a copy, call (215) 574-6115 or write to Federal
- Reserve Bank of Philadelphia, Public Information/Publications, P O
- Box 66, Philadelphia PA 19105-0066. See part 1 of this FAQ list to
- obtain a catalog of FRB publications.
-