What to do to straighten out errors in your card charges

It's bad enough getting bills for Christmas gifts you actually did charge; you don't need bills for things you never bought. But a lot of people are getting these surprises in their bills anyway. Now, they will have to go through the trouble of straightening out what the industry calls ``billing errors,'' a term that can cover charges made by someone other than you or a person authorized to use your credit card; a charge you did not make at all; a charge you did make but not in the amount shown on the statement; a charge you did make, but which was for an item that was damaged or did not arrive by a specified promised date, such as Christmas; errors in arithmetic; and previous payments of yours that were not recorded.

``Problems like this happen all through the year,'' says Marla Kaplan, associate director of BankCard Holders of America, a Washington consumer group. But because more purchases -- both legitimate and not -- tend to be made in the weeks before Christmas, the bills for those purchases are landing in mailboxes about now.

Many credit card bills contain a list of charges that were made in the previous month, as well as any outstanding balance left over from previous months. To maintain a good credit rating, Ms. Kaplan says, it is important to keep up payments on that part of the bill you are not disputing. ``Don't withhold payment on the entire bill,'' she said.

``You should pay the portion of the bill that's not in dispute,'' agrees Geri Schanz, spokeswoman for TRW Information Services, one of two major firms that keep a detailed credit history on millions of Americans. If you apply for a loan or a credit card, chances are pretty good TRW will be contacted and asked for a copy of your credit history.

That credit history will not be affected, Ms. Schanz says, if you are pursuing a dispute through the normal procedures.

Those procedures are not terribly complicated, but they need to be followed carefully, or you could be left paying someone else's charges.

The most important thing to remember, Kaplan says, is the calendar. You have 60 days after the bill was mailed -- not 60 days after you received it -- to notify the bank or store that issued your card that there is a billing error. This notification must be made in writing, and because you have just 60 days, you should not delay looking the bill over. And to make sure the bank receives it on time, you should cut the deadline for your mailing to 45 days.

``Open the bill as soon as it comes in the mail, even if you don't plan to pay it for a while,'' Kaplan recommends. Look at all the items on the bill and compare them with the copies of charge slips you have kept since the purchases were made.

If you do find an error and notify the card issuer within 60 days, the latter has 30 days to tell you it received your letter and 90 days to provide a written explanation or correction. During this period, the bank or store cannot report any withheld payment as late or delinquent. But again, you should be keeping current on all payments for nondisputed charges.

Now, if the bank tells you the charge is correct and you still say it is not, what do you do? Pay it, Kaplan recommends, even though avenues of dispute are still open. If you do not, you may find you now have a bad report with a credit reporting firm like TRW, which will mean settling things at some point to maintain your credit rating.

If continued negotiation or letter-writing does not resolve the dispute in your favor, you have a legal option. You can sue for damages if the amount in dispute is between $100 and $1,000. At this point you will probably have to resign yourself to forfeiting the first $50 that the card agreement says you are automatically liable for, but you can go after the rest.

The steps involved in settling credit card disputes do not necessarily argue for taking a credit card only from a bank that's in your hometown, Kaplan says. Because all communication has to be done in writing anyway, you might as well look for a bank with the lowest interest charges, or the special services you may want, even if the bank is halfway across the country.

In selecting a bank, though, it might pay to find one that has a toll-free telephone number, so you can find out quickly exactly whom to write to if there is a problem, or to make a fast call to report lost or stolen credit cards.

For a pamphlet giving more details on fighting off an erroneous credit card bill, send 50 cents to Billing Errors, BankCard Holders of America, 333 Pennsylvania Avenue, Washington, D.C. 20003. Taxes on mutual fund switch

My mutual fund company does not charge me for moving money from one fund in the group to another. But if I do switch, don't I have to pay taxes?-- B. L.

Yes. Switching funds is nothing more than selling shares in one fund and using the proceeds from the sale to buy shares in another fund. Even if you move part of the assets in the first fund, you still must pay capital gains taxes on any profits. If you do sell just a portion of the first fund, however, you will have to segregate these shares from the ones remaining to determine their purchase price. Your broker or tax accountant can help with the formula for doing this.

If you would like a question considered for publication in this column, please send it to Moneywise, The Christian Science Monitor, One Norway Street, Boston, Mass. 02115. No personal replies can be given by mail or phone. References to investments are not an endorsement or recommendation by this newspaper.

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