Chargeback Dispute Kit - Texas

CHARGEBACK DISPUTE KIT — TEXAS

Claim gate: A chargeback dispute is not automatically a DTPA action. Confirm statutory consumer status, a § 17.50(a) predicate, producing cause, recoverable damages, required reliance where applicable, state of mind, and notice before retaining a DTPA remedy.

PART A: FEDERAL LEGAL FRAMEWORK

Credit Card Disputes — Regulation Z / TILA

The Fair Credit Billing Act (FCBA), codified at 15 U.S.C. § 1666 and implemented by Regulation Z (12 C.F.R. § 1026.13), governs billing error disputes for credit card transactions.

Key Protections:

Billing Errors Under TILA:

☐ Unauthorized charge
☐ Goods/services not accepted or not delivered as agreed
☐ Failure to provide documentary evidence upon request
☐ Computational or accounting error
☐ Failure to credit payment or return
☐ Failure to deliver statement to last known address

Debit Card / EFT Disputes — Regulation E / EFTA

Consumer Liability Tiers:

Error Resolution Timeline:

Provisional Credit:

• If the investigation is not completed within the applicable 10-business-day period (20 business days for the specified new-account rule), the institution generally must provisionally credit the account to use the extended investigation period, subject to the written-confirmation and securities-account exceptions
• Consumer has full use of provisionally credited funds
• If the institution finds no error, it must give the written explanation and debit notice required by § 1005.11(d); it must honor specified third-party items and preauthorized transfers for five business days after notification under the rule's conditions
• In an action involving consumer liability for an unauthorized transfer, 15 U.S.C. § 1693g(b) places the authorization and liability-condition burden on the financial institution

PART B: TEXAS-SPECIFIC CONSUMER PROTECTIONS

Texas Deceptive Trade Practices — Consumer Protection Act (DTPA)

The Texas DTPA (Bus. & Com. Code § 17.41 et seq.) is one of the most powerful consumer protection statutes in the nation.

Prohibited Conduct (§ 17.46 — "Laundry List"):

The DTPA enumerates specific deceptive trade practices, many of which are relevant to chargeback disputes:

• (5) Misrepresenting the characteristics, uses, benefits, or quantities of goods or services
• (7) Representing that goods or services are of a particular standard, quality, or grade when they are not
• (9) Advertising goods or services with intent not to sell them as advertised
• (12) Representing that a consumer transaction involves rights, remedies, or obligations that it does not
• (13) Knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service
• (24) Failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose was intended to induce the consumer into a transaction the consumer would not have otherwise entered

Unconscionable Actions (§ 17.50(a)(3)):

• An act or practice that, to a consumer's detriment, takes advantage of the consumer's lack of knowledge, ability, experience, or capacity to a grossly unfair degree

Remedies (§ 17.50):

DTPA Definitions (§ 17.45):

• "Knowingly": Actual awareness of the falsity, deception, or unfairness of the act or practice, OR actual awareness of the act or practice constituting the breach of warranty. "Actual awareness" may be inferred from facts and circumstances.
• "Intentionally": Actual awareness of the falsity, deception, or unfairness combined with specific intent to cause injury

Pre-Suit Notice Requirement (§ 17.505):

• Before filing a DTPA lawsuit, the consumer must give the defendant 60 days' written notice of the specific complaint and the amount of actual damages, expenses, and attorney fees
• The defendant has 60 days to make a settlement offer
• This notice requirement is mandatory — failure to comply can result in abatement of the lawsuit

Statute of Limitations (§ 17.565):

• 2 years from the date of the deceptive act or practice, or from the date the consumer discovered or should have discovered the act

Practice Note: The DTPA applies to the consumer-merchant transaction underlying the chargeback (e.g., merchant's misrepresentation of goods). It may also apply to the financial institution's conduct if the institution engages in deceptive practices in handling the dispute. However, DTPA claims against banks are subject to certain exemptions and should be evaluated carefully.

Texas Finance Code — Debt Collection (Ch. 392)

If a fraudulent or disputed charge is sent to collections:

Prohibited Practices (§ 392.301-392.304):

• Threatening action that cannot legally be taken
• Using deceptive means to collect a debt
• Harassment or abuse
• Using unfair or unconscionable means

Relevance to Chargebacks:

• If a bank or merchant sends a disputed charge to collections during the dispute process, the collector may be violating both the federal FDCPA and Texas Fin. Code Ch. 392
• Consumers may bring private actions for actual damages, injunctive relief, and attorney fees (§ 392.403)

Texas Department of Banking

The Texas Department of Banking regulates state-chartered banks:

• Phone: (877) 276-5554
• Website: dob.texas.gov
• Accepts consumer complaints regarding state-chartered banking institutions

PART C: CHARGEBACK REASON CODES — COMMON CATEGORIES

Category 1: Fraud / Unauthorized Transaction

• Card not present fraud
• Counterfeit card
• Card stolen or lost
• Account takeover

Category 2: Goods or Services Not Received

• Merchandise never delivered
• Service never provided
• Merchant closed before delivery

Category 3: Goods or Services Not as Described

• Materially different from description
• Defective or damaged
• Counterfeit or misrepresented

Category 4: Duplicate Charge

Category 5: Incorrect Amount

Category 6: Credit Not Processed

Category 7: Subscription / Recurring Billing

• Canceled but still charged
• Unauthorized trial conversion
• Amount changed without notice

PART D: THREE-LETTER DISPUTE KIT

LETTER 1: INITIAL DISPUTE LETTER TO CARD ISSUER / BANK

[__/__/____]

VIA CERTIFIED MAIL — RETURN RECEIPT REQUESTED

[________________________________]
[Card Issuer/Bank Name]
[Billing Inquiries Department / Dispute Department]
[________________________________]
[________________________________]

Re: Billing Error Notice / Dispute of Unauthorized Transaction
Account Number ending in: [____]
Disputed Transaction Amount: $[________________________________]
Transaction Date: [__/__/____]
Merchant Name: [________________________________]

Dear Billing Inquiries Department:

I am writing pursuant to the Fair Credit Billing Act, 15 U.S.C. § 1666, and Regulation Z, 12 C.F.R. § 1026.13 [OR the Electronic Fund Transfer Act, 15 U.S.C. § 1693f, and Regulation E, 12 C.F.R. § 1005.11] to dispute the following transaction(s) on my statement dated [__/__/____]:

Reason for Dispute

(Select and complete the applicable section.)

☐ Unauthorized Transaction / Fraud
I did not authorize this transaction. My card was ☐ lost ☐ stolen ☐ never out of my possession. Discovered on [__/__/____]. Under 15 U.S.C. § 1643, my maximum liability is $50.

☐ Goods or Services Not Received
Ordered [________________________________] from [________________________________] on [__/__/____]. Expected delivery: [__/__/____]. Not received. Merchant contact: [________________________________]. The merchant's failure to deliver constitutes a violation of Tex. Bus. & Com. Code § 17.46(b)(5) and (9).

☐ Goods or Services Not as Described / Defective
Received [________________________________] on [__/__/____]. Materially different because: [________________________________]. Merchant contact: [________________________________]. The merchant's misrepresentation violates the DTPA (§ 17.46(b)(5), (7)).

☐ Duplicate Charge
Original: [__/__/____] for $[________________________________]. Duplicate: [__/__/____] for $[________________________________].

☐ Incorrect Amount
Correct: $[________________________________]. Charged: $[________________________________]. Overcharge: $[________________________________].

☐ Credit Not Processed
Returned/canceled on [__/__/____]. Promised credit: $[________________________________]. Not received. Tracking: [________________________________].

☐ Subscription / Recurring Charge Not Authorized
Canceled with [________________________________] on [__/__/____]. Confirmation: [________________________________]. Still charged $[________________________________] on [__/__/____].

Actions Already Taken

Request

1. Investigate and issue a chargeback for $[________________________________]
2. Credit my account
3. Remove related finance charges and fees
4. Block future recurring charges (if applicable)
5. Provide written confirmation

Compliance Reminders:

• Acknowledge within 30 days (Reg Z)
• Resolve within 2 billing cycles / 90 days (Reg Z) [or investigate within the applicable 10-business-day period or provisionally credit and use the 45/90-day Regulation E route]
• Do not report as delinquent during investigation

Enclosed Evidence

☐ Statement with disputed transaction(s) highlighted
☐ Receipts or order confirmations
☐ Merchant correspondence
☐ Product listing screenshots
☐ Delivery/return tracking
☐ Cancellation confirmation
☐ Photos/videos of defective goods
☐ Police report (if fraud)
☐ Other: [________________________________]

Sincerely,

Signature: ________________________________________

Printed Name: [________________________________]

Address: [________________________________]

Phone: [________________________________]

Account Number ending in: [____]

LETTER 2: FOLLOW-UP LETTER — DISPUTE DENIED OR UNSATISFACTORY

[__/__/____]

VIA CERTIFIED MAIL — RETURN RECEIPT REQUESTED

[________________________________]
[Card Issuer/Bank Name]
[Billing Inquiries Department / Dispute Department]
[________________________________]
[________________________________]

Re: Second Request — Dispute on Account ending in [____]
Original Dispute Date: [__/__/____]
Dispute Reference Number: [________________________________]
Disputed Amount: $[________________________________]

Dear Billing Inquiries Department:

I am writing to follow up on my billing error dispute submitted on [__/__/____]. Your response dated [__/__/____] indicated [________________________________].

Why the Resolution Is Inadequate

[________________________________]
[________________________________]

Additional Evidence

☐ [________________________________]
☐ [________________________________]

Legal Basis for Continued Dispute

Federal Law:

• Billing errors include charges for goods or services not accepted or not delivered as agreed (15 U.S.C. § 1666(b)(3))
• Must provide written explanation and documentary evidence upon request (12 C.F.R. § 1026.13(f))
• Section 1666(e) provides a forfeiture capped at $50 for specified FCBA noncompliance. Section 1693f(e) permits treble damages only when a court makes one of its specified bad-faith or knowing-and-willful findings

Texas Law — DTPA Protections:

1. Pre-Suit Notice: This letter also serves as notice under Tex. Bus. & Com. Code § 17.505(a) that I intend to pursue DTPA remedies against the merchant, [________________________________], for the following deceptive trade practice(s): [________________________________]. The specific amount of economic damages is $[________________________________]. The merchant has 60 days from receipt of this notice to make a settlement offer.

2. DTPA Remedies: Under § 17.50, I am entitled to recover:
   - Economic damages of $[________________________________]
   - Treble damages if the conduct was knowing or intentional
   - Mental anguish damages if the conduct was knowing
   - Attorney fees and court costs

3. Tex. Fin. Code Ch. 392: If the disputed charge has been or is sent to collections, any collection activity during the dispute period may violate Texas debt collection law.

Request

1. Reconsider and issue credit for $[________________________________]
2. Provide copies of all documents relied upon
3. Note applicable federal and Texas penalties for non-compliance
4. If you fail to resolve this matter, I will pursue remedies through the CFPB, Texas AG, and/or the courts

I reserve all rights under federal and Texas state law.

Sincerely,

Signature: ________________________________________

Printed Name: [________________________________]

Enclosures: Original dispute letter, bank's response, additional evidence

LETTER 3: REGULATORY COMPLAINT LETTER

[__/__/____]

VIA CERTIFIED MAIL — RETURN RECEIPT REQUESTED

Regulatory Agencies (select one or more):

☐ Consumer Financial Protection Bureau (CFPB)
P.O. Box 4503, Iowa City, IA 52244
Online: consumerfinance.gov/complaint

☐ Office of the Comptroller of the Currency (OCC) (national banks)

☐ Federal Reserve Board (state-chartered Fed member banks)

☐ FDIC (state-chartered non-Fed-member banks)

☐ NCUA (credit unions)

☐ Texas Attorney General — Consumer Protection Division
P.O. Box 12548
Austin, TX 78711
Phone: (800) 621-0508
Online: texasattorneygeneral.gov

☐ Texas Department of Banking
2601 North Lamar Boulevard, Suite 300
Austin, TX 78705
Phone: (877) 276-5554

☐ Texas Office of Consumer Credit Commissioner
2601 North Lamar Boulevard
Austin, TX 78705
Phone: (800) 538-1579

Re: Complaint Against [________________________________] for Violation of Federal and Texas Consumer Protection Laws
Account Number ending in: [____]
Original Dispute Date: [__/__/____]

Dear Sir or Madam:

I am filing this complaint because [________________________________] has failed to comply with error resolution requirements under federal law and Texas state law.

Summary of Dispute

On [__/__/____], I submitted a written billing error notice regarding a $[________________________________] transaction with [________________________________]. (Summarize.)

Federal Regulatory Violations

☐ Failed to acknowledge dispute within 30 days
☐ Failed to resolve within 2 billing cycles / 90 days
☐ Reported disputed amount as delinquent
☐ Failed to provide provisional credit within 10 business days
☐ Failed to complete investigation within 45/90 days
☐ Failed to provide written explanation
☐ Restricted or closed account in retaliation
☐ Other: [________________________________]

Texas State Law Violations

☐ DTPA (Bus. & Com. Code § 17.46): The merchant engaged in deceptive trade practices including [________________________________]
☐ DTPA (§ 17.50): The merchant's conduct was ☐ knowing ☐ intentional, supporting a request for any additional damages the trier may award under the applicable statutory ceiling
☐ Tex. Fin. Code Ch. 392: Collection activity on the disputed charge violated Texas debt collection law
☐ Other: [________________________________]

Practice Note for Texas AG: The Texas Attorney General's Consumer Protection Division has authority to bring actions under the DTPA (§ 17.47) for injunctive relief, civil penalties of up to $10,000 per violation (or $250,000 per violation if the victim is an elderly or disabled person), and restitution. Consumer complaints assist the AG in identifying patterns of deceptive conduct.

Resolution Requested

1. Investigation of the financial institution and/or merchant
2. Order requiring compliance with error resolution procedures
3. Credit of $[________________________________]
4. Removal of adverse credit reporting
5. Enforcement action as appropriate under Texas and federal law

Enclosed Documents

☐ Original and follow-up dispute letters with certified mail receipts
☐ Bank's response(s)
☐ Account statements
☐ Supporting evidence
☐ DTPA pre-suit notice (if applicable)
☐ Timeline of events

Sincerely,

Signature: ________________________________________

Printed Name: [________________________________]

Address: [________________________________]

Phone: [________________________________]

Email: [________________________________]

PART E: TIMELINE CHART — ALL CRITICAL DEADLINES

Credit Card (Reg Z)

DAY 0: Statement date showing billing error
|--- DAY 60: DEADLINE — Written dispute received by creditor
|--- After receipt: 30 days → acknowledgment required
|--- 2 billing cycles (max 90 days) → resolution required
|--- During investigation: No delinquency reporting, no account restriction

Debit Card (Reg E)

DAY 0: Learn of loss/theft → 2 BUSINESS DAYS to limit liability to $50
DAY 0: Statement date → 60 DAYS to report error
After notice: applicable 10 business days → determination OR provisional credit
20 business days replaces 10 only for the specified new-account transfer rule
45 days (90 for POS debit, foreign, or new-account transfers) → final investigation deadline
If provisional credit is reversed → written debit notice plus five-business-day item protection under § 1005.11(d)(2)

Texas DTPA Pre-Suit Notice

DAY 0: Consumer sends 60-day notice under § 17.505
|--- DAY 60: Defendant's deadline to make settlement offer
|--- After DAY 60: Consumer may file DTPA lawsuit
|--- Statute of Limitations: 2 years from act/discovery

PART F: EVIDENCE ORGANIZATION CHECKLIST

Transaction Records

☐ Account statement(s) — highlighted
☐ Receipt or order confirmation
☐ Authorization/reference number

Merchant Communications

☐ Emails, chat logs, letters
☐ Phone call records
☐ Social media messages

Delivery / Service Evidence

☐ Tracking information
☐ Photos/videos of defective goods
☐ Service documentation

Return / Cancellation Evidence

☐ Return tracking and confirmation
☐ RMA documentation
☐ Cancellation confirmation

Fraud-Specific Evidence

☐ Police report
☐ FTC Identity Theft Report

DTPA-Specific Evidence (for Texas Claims)

☐ Original product listing, advertisement, or description showing misrepresentation
☐ Comparison photos showing actual vs. advertised product
☐ Written terms, warranties, or guarantees that were breached
☐ Evidence of merchant's knowledge of the deception
☐ Records of other consumers with similar complaints (if available)
☐ DTPA 60-day pre-suit notice (copy with certified mail receipt)

PART G: PRACTICE TIPS FOR TEXAS CHARGEBACK DISPUTES

Leverage Texas DTPA Protections

1. DTPA treble damages create real leverage. The prospect of treble damages plus attorney fees often motivates merchants and financial institutions to resolve disputes quickly. Even a $500 charge becomes a potential $1,500+ liability for the merchant.

2. Send the DTPA 60-day notice early. The mandatory pre-suit notice under § 17.505 can be sent simultaneously with or shortly after the initial dispute letter. This puts the merchant on notice and starts the settlement clock.

3. "Knowing" vs. "intentional" matters. Knowing conduct triggers treble damages on economic damages plus mental anguish. Intentional conduct triggers treble damages on all damages including mental anguish. Carefully evaluate the evidence to determine the appropriate characterization.

4. DTPA applies to the merchant, not always the bank. The DTPA claim typically runs against the merchant whose deceptive practices caused the underlying dispute. Claims against banks for dispute handling are more complex and may be subject to exemptions.

5. Texas AG civil penalties. If the victim is elderly (65+) or disabled, the AG can seek up to $250,000 per violation — a powerful tool for advocacy.

General Best Practices

6. Act within 60 days. The federal periods run from transmission of the first statement reflecting the error, not merely from a user-entered “statement date.”
7. Use certified mail. Proof of delivery is essential.
8. Document everything. Texas courts take consumer protection seriously; thorough documentation strengthens your case.
9. File CFPB complaint. The CFPB forwards complaints to the institution.
10. Consider multiple regulatory filings. File with CFPB, Texas AG, and Texas Department of Banking for maximum leverage.
11. Small claims court. Texas Justice Courts handle matters up to $20,000 and provide an accessible forum for unresolved disputes.

SOURCES AND REFERENCES

• Fair Credit Billing Act, 15 U.S.C. § 1666: https://www.law.cornell.edu/uscode/text/15/1666
• Electronic Fund Transfer Act, 15 U.S.C. § 1693f: https://www.law.cornell.edu/uscode/text/15/1693f
• Regulation Z, 12 C.F.R. § 1026.13: https://www.consumerfinance.gov/rules-policy/regulations/1026/13/
• Regulation E, 12 C.F.R. § 1005.11: https://www.consumerfinance.gov/rules-policy/regulations/1005/11/
• Texas DTPA, Bus. & Com. Code § 17.41 et seq.: https://statutes.capitol.texas.gov/Docs/BC/htm/BC.17.htm
• Texas Finance Code Ch. 392 (Debt Collection): https://statutes.capitol.texas.gov/Docs/FI/htm/FI.392.htm
• Texas Attorney General — Consumer Protection: https://www.texasattorneygeneral.gov
• Texas Department of Banking: https://www.dob.texas.gov
• Texas Office of Consumer Credit Commissioner: https://occc.texas.gov
• CFPB — File a Complaint: https://www.consumerfinance.gov/complaint/

This template is provided for informational purposes only and does not constitute legal advice. Texas provides powerful consumer protections through the DTPA that significantly enhance federal chargeback rights. Consult a qualified attorney licensed in Texas for advice specific to your situation.