§1666i Assertion by cardholder against card issuer of claims and defenses arising out of credit card transaction; prerequisites; limitation on amount of claims or defenses

Summary

A credit card company must accept most claims and defenses a cardholder has about a purchase paid with the card, as long as the claim is not for personal injury and these things are true: the cardholder tried in good faith to resolve the problem with the merchant, the purchase was more than $50, and the purchase happened in the same State as the cardholder’s mailing address or within 100 miles of that address. The $50 and location rules do not apply when the merchant is the card company or is closely connected to it (for example, the same company, controlled by it, a franchisee, or involved in a mail solicitation by the card company). The cardholder’s claim or defense can’t be for more than the credit balance on that transaction when the cardholder first notifies the card company or merchant. When figuring that balance, payments are applied first to late charges (by order posted), then to finance charges (by order posted), then to other charges (by order posted).