From streaming platforms to meal delivery services, subscriptions provide a convenient way to access various products and services. However, with the average American subscriber having 4.5 subscriptions^[1], it's easy to forget about one of them and overlook recurring charges. So, what happens if you fail to cancel a subscription on time and get charged for it? Can you dispute a subscription charge?

In this guide, you'll learn about the different issues with subscription charges and find out whether it's possible to dispute them and get a chargeback. We'll also discuss virtual cards and the reasons that they're a long-term solution against unauthorized charges and payment disputes.

Can You Dispute a Charge if You Forgot To Cancel a Subscription?

Forgetting to cancel a subscription is not a valid reason to dispute a charge. When you sign up for a subscription, you agree to the service’s terms and conditions, which include cancellation policies. If you no longer want to use the service, you should cancel the subscription before the next billing cycle to avoid being charged.

Still, you can contact the company and explain your situation. They may be willing to offer a refund or partial credit as a gesture of goodwill, but they usually aren’t obligated to do so.

When Can You Dispute a Subscription Charge?

While forgetting to cancel a subscription isn’t a valid reason to dispute a charge, there are instances where you may have grounds for disputing, such as:

1. Fraudulent charges
2. Post-cancellation charges
3. Double charges
4. Unannounced price increases

Fraudulent Charges

If the charge in question is for a subscription you never signed up for, your credit card information may have been stolen and used fraudulently. However, before you dispute the transaction, check that it wasn't made by someone in your household or an authorized user on the account. If the charge is indeed fraudulent, you should:

• Contact one of the three credit bureaus (Experian, TransUnion, or Equifax) to place a fraud alert on your credit report
• Notify your credit card issuer about the fraudulent charge and request a new card number
• File a complaint with the Federal Trade Commission (FTC) to document the fraudulent charge

Post-Cancellation Charges

You may cancel a subscription but still receive charges on your debit or credit card for different reasons, including:

• Failure to cancel properly—Some companies have specific steps for canceling a subscription that might not be clearly stated in their policies. If you miss a step, your cancellation may not go through, and you could still be charged.
• Technical issues—Sometimes, a system bug, error, or glitch may prevent your cancellation request from being processed correctly.

Double Charges

Double charges occur when the merchant charges you twice in one billing cycle. Often, they’re a result of system glitches or human error. If you notice you've been charged twice, contact customer support immediately and request a refund for one of the charges. Note that the refund may take a few business days to reflect in your account.

Unannounced Price Increases

Services may raise their subscription prices but are generally required to notify you beforehand. If you weren’t given proper notice of the increase and were charged more than you expected, you might have a valid reason to dispute the charge.

How To Dispute a Subscription Charge

The fastest way to resolve an unwelcome subscription charge is to contact the merchant directly. You should explain the situation and provide the necessary evidence, such as a cancellation confirmation email, incorrect charge amount, or billing errors. The merchant may issue a refund, credit your account, or offer an alternative resolution.

Still, if the merchant is unresponsive or unwilling to resolve the issue, you can dispute the charge with your card issuer. The dispute process involves three main steps:

1. Dispute initiation
2. Investigation
3. Final decision

Dispute Initiation

To initiate a dispute, contact your credit card issuer within 60 days of receiving the bank statement with the charge you want to dispute and inform them about the incorrect charge^[2]. You can do this via phone, by filling out an online form, or through physical mail. 

If you initiate the dispute via phone or online, the FTC advises you to follow up with a written letter to the address listed for billing disputes or errors. It's highly recommended to use certified mail with a return receipt requested to have proof of your claim. The issuer has 30 days to acknowledge that they received your dispute in writing^[2].

To make the investigation more efficient and increase your chances of winning the dispute, include the following in your letter:

• Your name, address, and account number
• Date of the charge you’re disputing
• Amount charged
• A description of the error or reason for the dispute
• Any supporting documents, such as cancellation confirmations, receipts, or billing statements

Remember to keep a copy of your letter for future reference.

Investigation and Resolution

After receiving your letter, the issuer should investigate and resolve your claim within two billing cycles, which can extend up to 90 days^[2]. During this time, they'll contact the merchant, who can accept the dispute or decide to contest it. Sometimes, you may be given temporary credit while the investigation and resolution process is ongoing.

Final Decision

At the end of the investigation, your credit card issuer will inform you of their final decision in writing. If they determine you were charged incorrectly or fraudulently, they'll reverse the charge and credit your account or let you keep the temporary credit.

However, if they find the charge was valid, the temporary credit will be overturned, and you'll be responsible for paying the disputed amount. At this point, you can appeal the decision with additional evidence.

If the outcome is again unfavorable, you can file a complaint with the Consumer Financial Protection Bureau (CFPB)^[2] or seek legal advice.

How Successful Are Payment Disputes?

A study by LendingTree involving about 2,000 participants found that half of American credit card holders have disputed a charge before—and for 96%, the dispute had been resolved in their favor^[3].

The dispute process can still be challenging due to the limited timeframe, evidence requirements, and lengthy investigations. There’s also no guarantee that your claim will be resolved in your favor.

To avoid some of the reasons you might need to dispute a charge, including subscription-related issues, billing errors, and unauthorized charges, consider using virtual cards for your online payments. These cards protect your actual payment card information with random numbers at checkout, keeping it safe in case the merchant falls victim to a data breach.

While some card issuers and banks, such as American Express^® and Capital One^®, offer virtual cards, choosing an independent provider like Privacy gives you access to advanced card customization options for greater financial control.

Avoid Fraudulent or Excessive Charges With Privacy Virtual Cards

After linking your debit card or bank account with it, Privacy allows you to generate three types of virtual cards: 

• Single-Use Cards—These cards close shortly after the first transaction and decline all further attempts to use them, helping protect you from fraud in case of card number theft. You can use these cards for one-off purchases with unfamiliar vendors.
• Merchant-Locked Cards—These cards can be used for multiple transactions, but only with the first merchant you use them with—any attempts to use them elsewhere will be declined. They’re ideal for subscriptions and other recurring payments.
• Category-Locked Cards—These cards can be used for multiple transactions with multiple merchants that belong to the same merchant category, such as groceries or education. You can use Category-Locked Cards to budget and manage spending on specific products and services.

You can pause or close your Privacy Virtual Cards, and Privacy will decline all further charges to your virtual card. This feature can help you avoid unwanted charges, such as those that might occur while you’re in the process of canceling a subscription. 

Privacy also lets you set a spending limit to control how much a merchant can charge you. It will decline all charges above the limit, helping protect you from hidden fees, duplicate charges, and other overcharges.

If you still encounter a charge you believe you should dispute, you can notify Privacy. It will investigate and file a chargeback against the merchant if there are grounds for it.

Privacy Convenience Features

With Privacy, you get additional features to make your online payments more convenient and card management seamless:

Privacy also offers a Shared Card feature that allows you to securely share your virtual cards with trusted friends and family for budget sharing. To help keep your spending organized for easy tracking, you can add custom card notes on your cards, such as merchant names and billing cycle information.

How To Get Started With Privacy

To join Privacy, all you have to do is:

1. Visit the signup page
2. Provide the required details to verify your identity
3. Link a funding source—your bank account or debit card
4. Request and generate a virtual card

You can use Privacy Cards at most vendors that accept U.S.-issued Visa^® and Mastercard^® cards, allowing you to shop locally and globally while keeping your payment card information secure.

Privacy offers four monthly plans:

1. Personal
2. Plus
3. Pro
4. Premium

The table below breaks down each plan’s features:

References

^[1]Bango. https://bango.com/super-bundling-awakens-new-us-data-from-bango-reveals-true-extent-of-subscription-boom/, sourced January 14, 2025

^[2]FTC. https://consumer.ftc.gov/articles/using-credit-cards-and-disputing-charges, sourced January 14, 2025

^[3LendingTree. https://www.lendingtree.com/credit-cards/study/disputes/#:~:text=Of%20those%20who've%20disputed,21%25%20challenged%20a%20subscription%20charge., sourced January 14, 2025

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