Credit card dispute mishandled - do I have to pay it back?

I filed credit card disputes for two related charges, 6 months after the charges were made, based on services not providing the benefits promised, after spending 2 months trying to contact the merchant to obtain a refund. The credit card company posted temporary credits to my account for both disputes. Within a month, three adjustments were made to my account for the $995 disputed amount, showing a negative â??adjustment to your account,â? positive â??reversal of temporary creditâ? and positive â??repost of disputed transactionâ?, with the effect of denying the dispute. The other amount, $2,500, showed only two adjustments, a negative â??adjustment to your accountâ? and a positive â??reversal of temporary credit.â? I received no other information on the resolution of the disputes.

On the advice of an attorney, I sent a letter to the credit card company within 10 days requesting the status of all disputes filed by me in the last six months and appealing the $995 that was re-posted.

The credit card company responded by adding the third entry for the $2,500 dispute amount, a positive â??repost of disputed transaction,â? more than a month after the original adjustments were posted, and sent me letters stating that the charges appeared to be correct. I believe now that the credit card company may have simply been negligent in not reposting the $2,500 when the other entries were posted to my account, but at the time, I assumed that the lack of re-posting meant that I had won the dispute in the absence of any other communications from the credit card company.

They also sent me a letter which I received March 9 that said that they had processed a temporary charge to my account for the $995, and were "negotiating" with the merchant; they are usually successful, but might not be. This letter was dated the same date as the letter stating that the charge appeared to be correct, which I received on March 5. There has been no credit to my account for the $995, so I really don't know where I stand with this one.

After receiving the statement showing the total credit balance for the account, I had asked for and received a refund of the credit balance, and used it to pay off the loan used to pay off the credit card company for the original charge (it was a much lower interest rate). I pay the entire balance each month, to avoid paying interest, and continued paying the monthly charges each month even when the disputed amounts were credited to my account.

The $2,500 reposted amount is due April 5, 2007.

Is it legal for me to refuse to re-pay the $2,500 reposted transaction, which I also appealed within 10 days? I have already stopped using the card, which was my main credit card, and do not intend to use it again.

Will not paying the disputed amount affect my credit score (around 760)?

If I do not pay the $2,500, can other credit card companies, with which I have 0% interest rates, but which have clauses in their terms allowing them to raise the rate astronomically if I do not pay any other credit card as agreed, raise their interest rates?

Is there some way for me to continue disputing these charges?

Does the credit card company accepting and working the dispute outside the legal time limit require them to follow the law, or are they just being "nice" and are not required to follow the law's time frames and procedures?

Thanks for any help you can give me!

 

Still worried

The credit card company that mishandled the dispute was Discover. Today, I got a letter from them saying that based on the evidence I sent in the appeal letter they are not re-opening the dispute, but are reporting my account to the credit bureaus as disputed. However, they don't say whether they are talking about the $995 or $2,500. Discover used to be the only card I used, but probably not anymore! I could have accepted it if they'd just denied the dispute (not happily, though), but they've sent me conflicting information more than once.

The credit card I'm worried about raising rates is Chase, and I know that when I opened the account last summer they had the clause where they could raise your rate to 30+% if you defaulted on ANY other "obligation", which I expect they would consider this to be. I took my home equity line of credit for about $6,000 and put it on one Chase card at 0% until October 2007 (good move at the time, as I saved about 9% interest), and charged another $2,499 of the disputed transaction to a 0% purchase Chase card (who haven't replied to my dispute on the $2,499 yet, but it was out of the legal time limit, and they DID reply to the one that was slightly outside the legal time limit, and I won that one - or I'll find out in about another 5 weeks if I really won it). I'm worried that Chase will raise the rates on both cards to an astronomical rate because I don't pay the Discover re-charge, because I can barely make the current payments.

Also, I was planning to accept a solicitation for another 0% interest rate card before October, so I could keep the HELOC money at 0% until it's paid off, but will not paying the disputed amount keep credit card companies from sending me those solicitations, or approving me when I apply?

Also, is there any place where you can complain about a credit card company not following the dispute procedure?

 

More info

I had the bright idea that I could ask Discover to lower my interest rate to 0%, and then worry about whether I would pay the $2,500 after the due date of April 5, 2007, since paying the amount due over and above the $2,500 would cover the minimum payment, in the hopes I could get in to see an attorney with the required knowledge soon. I've been trying to get advice from an attorney through Pre-paid Legal for over 2 weeks now (the main Oklahoma firm who gave me the bad advice suddenly had a conflict of interest after I told them their advice lost me $2,500, although they didn't tell me THAT for a week after I first told them about the re-charge of the $2,500, and the first referral attorney was a criminal defense attorney who knows nothing about credit card disputes, who was busy last week and couldn't even look at my information to see that he couldn't help me until last Friday afternoon).

Discover said that my interest rate was 18.24%, and the best they could offer me for the current balance was 17.994% - or 3.9% on new purchases, but who cares about new purchases? I'm worried about the $2,500 balance. When I asked if 17.994% was the best they could do, and mentioned the 0%/12 month introductory rate I had just found on the Internet for the exact card I have, he offered to send me a letter which I could fill out and return to ask for a lower rate. I guess they don't want my continued business - I've had the card since 1992, and used it as my main card for at least 10 years.

So I called Chase, to boldly ask them what would happen if I didn't pay the disputed amount. The representative confirmed that they review information from credit bureaus periodically (but couldn't tell me when), and will raise the rate if a past due amount is reported. However, if the account is reported as disputed, AND I have a customer statement in the credit bureau's files about the dispute, they will not raise the rate. She said that the rate could be raised to anywhere between 8.99% fixed (where it would normally go after the 0% rate expires) and 29.99% variable. She didn't say that they would evaluate my customer statement, just that I needed to have one, but I'm guessing there's at least some evaluation, unless they just want to know that you are serious enough about it to contact the credit bureaus and submit your statement.

The letter from Discover telling me they were reporting it as disputed to the credit bureaus did say which credit bureaus, and gave me phone numbers for them, so I guess I can call them to find out how to file the customer statements.

 

More run-around: can't get terms and conditions timely

After consulting two attorneys, it looks like my ability to not pay the $2,500 AND not get sued for the $2,500 plus 18.24% interest and attorney fees, etc. in the future may depend on the terms and conditions of the contract with Discover, not the federal law. It is hard to find an attorney who knows the consumer protection law!

So I looked on Discover's web site for the terms and conditions and couldn't find them. I sent an email to their customer support asking the location of the terms and conditions on the web site. They said they would mail them to me, and I should receive them within 7-10 days. When I replied that I needed the information to decide whether to pay a disputed item or not, and the payment needed to be made by April 9, 2007, I was offered the chance to send the dispute information again. After two rounds, I was informed that they cannot e-mail or fax the terms and conditions to me, nor are they available on the Internet. I will have to wait for them to come by snail mail, which probably will not arrive soon enough for me to read them and decide what I want to do before the due date. My last suggestion to them was to re-post the disputes, thus reducing the balance of the account by the disputed amounts, so I wouldn't have to decide what to do until I get the current terms, which I'm sure have changed since my account was opened in 1992.

I'll look into complaining to the FDIC - if I could get someone to actually look at the problem, I'd be thrilled, especially if they got in trouble for giving out such conflicting information. It seems like the complaint form for the FDC is merely for statistical purposes - they won't actually help me - so why bother?