Consumer Rights for Recurring Billing Errors

Overview

Recurring billing errors include duplicate charges, continued billing after cancellation, wrong amounts, or charges for services you never authorized. These errors can appear on credit card statements, bank (ACH) statements, or debit card activity. Federal laws give different protections depending on the payment method: most credit-card disputes fall under the Fair Credit Billing Act (FCBA), while unauthorized or erroneous electronic transfers (including many ACH and debit card errors) are handled under the Electronic Fund Transfer Act (EFTA) and Regulation E. (See CFPB and FTC guidance.)

In my practice helping consumers recover mistaken recurring charges, the single best outcome always follows three things: early detection, good documentation, and prompt, written disputes to the correct party. Below I outline the steps, timelines, and escalation paths that consistently work.

Key laws and protections

• Fair Credit Billing Act (FCBA): Applies to credit card accounts and provides the right to dispute billing errors and withhold payment for disputed amounts while the issuer investigates. Consumers generally must notify the creditor in writing within 60 days of the date the creditor mailed the first statement showing the error (15 U.S.C. 1666). For practical guidance, see the Consumer Financial Protection Bureau (CFPB) on credit card disputes.

• Electronic Fund Transfer Act (EFTA) / Regulation E: Governs unauthorized or incorrect electronic transfers from consumer checking accounts, including many recurring ACH payments and debit-card transfers. Consumers normally must report errors within 60 days of the bank statement that shows the error to retain certain protections. Financial institutions must investigate promptly—typically providing provisional credit within 10 business days or completing a full investigation within 45 days for certain cases (CFPB: Your rights under Regulation E).

• Other consumer protections: State laws and contract terms sometimes add protections (for example, state consumer protection statutes against unfair business practices). The FTC offers guidance about recurring charges and how to cancel subscriptions.

Typical timeline and what to expect

1. Detect the error: Review statements monthly. Many recurring billing errors are simple oversights that become costly over time.

2. Contact the merchant first: Ask for an immediate refund and note the representative’s name, date, and response. Some merchants resolve billing glitches quickly.

3. Notify your card issuer or bank in writing if the merchant won’t fix it:

• Credit cards (FCBA): Send a written dispute to the credit card issuer within 60 days of the statement showing the error. The issuer must acknowledge the complaint and investigate.
• Debit/ACH (EFTA/Reg E): Notify your bank or card issuer of the error as soon as possible and no later than 60 days after the statement showing the error.

1. Investigation timeline: By law, institutions must investigate and respond. Typical steps:

• Acknowledge within a few business days.
• Provide provisional credit within 10 business days for many errors while investigating.
• Complete a full investigation within 45 days for some cases (e.g., new accounts, international transactions, POS or certain remittance transfers). If the bank finds no error, it must explain why and restore any provisional credit.

1. If the dispute succeeds: You get a correction, refund, and interest/fees corrected as appropriate. If it fails, you get a written explanation and next-step options.

Common dispute routes and tools

• Chargebacks (credit/debit cards): Ask your card issuer to file a chargeback if the merchant won’t refund. Card networks and issuers have their own rules and timelines; act quickly.

• ACH returns (bank accounts): Banks can return unauthorized ACH debits under EFTA rules; you’ll typically need to file a dispute with the bank.

• File complaints: If the issuer or merchant doesn’t resolve the issue, you can file complaints with the CFPB, your state attorney general, and the FTC. These agencies can help push resolution and track problematic merchants.

• Legal remedies: In persistent cases, consumer-protection statutes allow private suits or attorney involvement. Small claims court can be a practical option for modest amounts.

Step-by-step dispute checklist (practical)

1. Gather documentation: copies of statements, receipts, membership terms, emails proving cancellation, screenshots of subscription pages, and any merchant communication.

2. Record contact details: merchant name, phone number, representative name, dates, and reference numbers.

3. Send a written dispute to the issuer/bank (email may be accepted, but certified mail creates a stronger record). Include:

• Your name and account number
• Date and amount of the disputed charge
• Why the charge is wrong (e.g., canceled subscription, duplicate charge)
• Copies (do not send originals) of relevant documents
• A clear request (refund, reversal, provisional credit)

1. Keep copies and follow up if you don’t get a timely response.

2. If the creditor denies the claim, escalate to CFPB or state regulators and consider chargeback or small-claims action.

Below is a short dispute letter template you can adapt:

[Your name]
[Account number]
[Statement date showing error]

I am writing to dispute a recurring charge on my account in the amount of $[amount] on [date]. I cancelled this subscription on [date] and have attached confirmation (or: I did not authorize this charge). Please investigate and correct my account, including refunding any fees and interest related to this error. I am requesting a provisional credit while you investigate.

Sincerely,
[Your name]

Practical examples and pitfalls

• Cancellation but continued charges: If you cancelled a subscription but the merchant keeps billing, save the cancellation confirmation (email or chat transcript). Send that to the merchant and your bank. In my experience, a documented cancellation plus a timely dispute almost always produces a refund.

• Duplicate charges: Often resolved with a simple refund request; if the merchant delays, file a dispute with the card issuer and request provisional credit.

• Authorized recurring payments you later contest: If you agreed to a recurring charge but believe the amount or terms changed without notice, document when and how you were told about the change. The FCBA and EFTA focus on unauthorized or erroneous charges, but notice and contract terms matter in these disputes.

Common mistakes

• Waiting too long: Missing a 60-day window for written disputes under federal law can severely weaken your claim.
• Relying on a phone call only: Always follow up in writing and keep copies.
• Not checking statements regularly: Many recurring errors compound over months.

When to escalate and where to file complaints

• Consumer Financial Protection Bureau (CFPB): File at consumerfinance.gov/complaint for credit card and bank disputes (CFPB guidance page).
• Federal Trade Commission (FTC): Report recurring billing scams or deceptive subscription practices at ftc.gov/complaint.
• State Attorney General: Use your state AG’s consumer protection division for local enforcement.
• Better Business Bureau: For merchant-level pressure and dispute records, file at bbb.org.

When to hire an attorney

For large balances, repeated unlawful billing, or cases that affect your credit record, consult a consumer protection attorney. In smaller disputes, a demand letter from an attorney or small claims court is often effective.

Authoritative sources

• Consumer Financial Protection Bureau (CFPB), “Disputes and errors” and credit-card dispute guidance: https://www.consumerfinance.gov/ (search: credit card billing errors)
• Federal Trade Commission (FTC), guidance on recurring charges and cancellations: https://www.ftc.gov/
• Regulation E (EFTA) summaries and timelines: CFPB and bank disclosure pages on electronic transfers

Helpful internal resources

• For a hands-on walkthrough of the dispute process, see our step-by-step guide: How to Dispute a Billing Error: A Step-by-Step Guide.
• If you’re dealing with unauthorized bank charges, this practical article explains options and steps: How to Dispute Unauthorized Bank Charges Effectively.

Final tips (practical mindset)

Act quickly, document everything, and use the protections available under FCBA and EFTA. In my practice, the combination of a clear written dispute and a timely complaint to the bank or card issuer resolves most recurring billing errors without litigation. If you need help drafting a dispute or deciding whether to escalate, consult a qualified consumer law attorney or a reputable financial counselor.

Professional disclaimer: This article is educational only and does not replace personalized legal or financial advice. For specific cases, consult a licensed attorney or financial advisor.