How to dispute bank charges: A step-by-step guide

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Have you ever glanced at your bank statement and spotted a charge you don't recognize? You're not alone. In this age of mobile banking, it's easy to overlook the occasional odd fee. But those unexpected charges are precisely why you should closely monitor your statements.

If you spot something fishy, it's time to initiate a bank dispute. This process involves challenging a charge or fee by asking your bank to take a second look.

Understanding bank fees

Before you can effectively dispute a charge, you need to know what you're up against. Here are some common fees you might encounter:

1. Overdraft fees: These kick in when your bank covers a transaction that exceeds your balance. They're often around $35, but the amount varies by bank.
2. Monthly maintenance fees: Some banks charge a monthly fee to keep your account open. However, they may waive these fees if you maintain a minimum balance or set up direct deposit.
3. ATM fees: Using an out-of-network ATM can result in double charges — one from the ATM operator and another from your bank. Banks apply these fees on a per-transaction basis, and they vary by institution.
4. Insufficient funds fees: If you don't have enough money to cover a transaction, the bank may decline it and charge you.
5. Wire transfer fees: Banks often charge for sending or receiving wire transfers, especially for international transactions.

"Overdraft fees are the most commonly disputed fees," says Ohan Kayikchyan, a certified financial planner and money coach. "Other fees people commonly dispute are their monthly maintenance fees. That's because, in some cases, the banker didn't explain the fees or the customer didn't understand how to maintain their account to waive the fee."

What to do before disputing a bank fee

Ryan Conte, chief revenue officer at Propell Credit Union, advises, "If you're seeing an unauthorized charge, you need to address it in a timely fashion and contact your financial institution." Before you pick up the phone, take these steps:

• Review your transactions line-by-line
• Make a note of any unusual fees
• Check your bank's policies on their website or in your account agreement
• Determine if the fee is legitimate or an error
• Gather supporting documents like receipts and past statements

The importance of documentation

Keeping good records is crucial when disputing bank charges. Here’s what you should document:

• Dates and amounts of disputed charges
• Copies of relevant receipts or invoices
• Screenshots of online transactions
• Any correspondence with merchants related to the disputed charges
• Notes from phone conversations with bank representatives, including names and employee IDs

Step-by-step guide to disputing a bank charge or fee

Now that you've done your homework, here are the steps to take to dispute a bank charge:

Step 1: Contact your bank

Reach out to your bank via their website chat or customer service number. Have your account number, the date and amount of the disputed charge, and any supporting information ready. Some tips for effective communication include:

• Choose a time when you have plenty of time to discuss the issue
• Write down key points you want to make before the call
• Be polite but firm in your communication

Step 2: Make your case

When you speak to a representative, be specific about why you believe the charge is incorrect or unfair. Reference any relevant parts of your account agreement. Be polite and concise, and ask about the dispute resolution process and timeline.

Step 3: Request a fee waiver (if applicable)

If you think a fee is unfair, you can request a one-time courtesy waiver. However, you need to be tactful when making the request. Try this approach: "Thank you for explaining the fee policy. Given my 10-year history as a loyal customer and the fact that this has never happened before, would it be possible to receive a one-time waiver of this charge?"

Remember, banks have the discretion to waive fees. A polite request can go a long way.

Step 4: Escalate if necessary

If they deny your initial request, you can escalate by politely asking to speak to a supervisor or manager. Restate your situation again and ask if you can receive a fee waiver.

The supervisor may reconsider your request and grant you the waiver. If the supervisor also denies your request, consider writing a formal letter to the bank's corporate office. Explain your dispute, detail your attempts to resolve it, and state your desired outcome. Send the letter by certified mail and keep a copy for your records.

Writing an effective dispute letter

Your letter should include:

• Your account number and personal information
• A clear, concise explanation of the dispute
• Copies of relevant documents (always keep the originals)
• A specific request for resolution

Step 5: Follow up

There's a famous saying that the money is in the follow-up, especially in banking disputes. Keep a log of all your interactions, including dates, times, names of the representatives you spoke with, and summaries of conversations.

If the bank gave you a timeline for resolution and it's passed, follow up. Reference your case number if you have one, and politely but firmly request an update.

What to do if your dispute is denied

If you've gone through the dispute process and the bank denied your claim, you may still have other avenues for a favorable response.

1. Appeal the decision: You can request a detailed explanation for the denial. You can strengthen your appeal by including any new supporting information.
2. File a complaint: If all else fails, you can file a complaint with the CFPB (more on that in a moment) or your state's banking regulator.
3. Switch banks: If you're consistently unhappy with your bank's practices, consider taking your business elsewhere.

Know your rights

As a banking customer, you have rights protected by federal law. The Consumer Financial Protection Bureau (CFPB) oversees banking regulations and ensures the fair treatment of customers. As of May 2024, they’ve provided over $20 billion in relief through various means.

Two key laws protect you:

1. The Electronic Fund Transfer Act (EFTA) outlines the steps for disputing errors and guarantees your right to dispute within 60 days of the statement containing the error.
2. The ​​Truth in Savings Act (TISA) requires banks to provide comprehensive information about interest rates, minimum balance requirements, and other account details.

How to file a complaint with the CFPB

If you believe your bank has violated your rights or your dispute remains unresolved, you can file a complaint with the CFPB:

• Visit www.consumerfinance.gov
• Click on "Submit a complaint"
• Choose the appropriate category for your complaint
• Provide details about your complaint
• Review and submit your complaint

The CFPB will forward your complaint to the company and work to get a response, typically within 15 days.

Tips for avoiding future disputes

To prevent future fees, take the following steps:

• Set up account alerts: Use your bank's app to create notifications for low balances or large transactions. You can also use a budgeting app to keep track of your transactions.
• Review your account policies: Familiarize yourself with your account's terms and conditions.
• Consider switching accounts: If you're unhappy with your bank's fees, you can shop around for a better deal.
• Watch out for recurring payments: Track your subscriptions and maintain a buffer for any you might have forgotten.
• Opt for overdraft protection: Many banks allow you to link your checking account to a savings account or other line of credit to cover potential overdrafts.

The bottom line

Staying vigilant with your bank accounts is key to avoiding unfair charges. Familiarize yourself with your bank's policies and credit card terms to remain compliant. Remember, banks can make mistakes, too. If you spot an unfair charge, address it promptly by contacting your bank's customer service.

By understanding your rights and following these steps, you'll be well-equipped to dispute unfair bank charges and potentially save yourself some hard-earned cash. Don't let those sneaky fees slip by — stay alert and informed, and don't be afraid to speak up when something doesn't look right.

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.