Fair Credit Billing Act: Dispute Billing Errors
Directly with the Creditor
by rebuildcreditscores.com
Directly with the Creditor
by rebuildcreditscores.com
| Copyright RebuildCreditScores 2010 All Rights Reserved |
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Basics of the Fair Billing Act
Types of disputes covered
Consumers must do the following to take advantage of the Fair
Billing Act:
Types of disputes covered
- Billing Errors.
- Unauthorized Charges (federal law limits your responsibility for
unauthorized charges to $50). - Charges that list the wrong date or amount.
- Charges for goods and services you didn't accept or weren't
delivered as agreed. - Math errors.
- Failure to post payments and other credits, such as returns.
- Failure to send bills to your current address - provided the
creditor receives your change of address, in writing, at least 20
days before the billing period ends. - Charges for which you ask for an explanation or written proof of
purchase along with a claimed error or request for clarification.
Consumers must do the following to take advantage of the Fair
Billing Act:
- Write to the creditor at the address given for "billing inquiries,"
not the address for sending your payments. - Include your name, address, account number and a description
of the billing error. - Send your letter so that it reaches the creditor within 60 days
after the first bill containing the error was mailed to you. - Send your letter by certified mail, return receipt requested, so
you have proof of what the creditor received. - Send supporting documentation such as copies (not originals) of
sales slips or other documents that support your position. Keep
a copy of your dispute letter.
Responsibility of the creditor
What you can do while the dispute is under investigation
What creditors can and cannot do while the dispute is under investigation
If your disputed bill does contain errors and the bill is incorrect
If your disputed bill does not contain errors and the bill is correct
What if the creditor fails to follow the procedure
What to do if the creditor violates the FCBA
To review the full Fair Credit Billing Act visit:
http://www.ftc.gov/os/statutes/fcb/fcb.pdf
Sample Fair Credit Billing Act Letter
- The creditor must acknowledge your complaint in writing within thirty (30) days after receiving
it, unless the problem has been resolved. - The creditor must resolve the dispute within two billing cycles (but not more than 90 days)
after receiving your letter.
What you can do while the dispute is under investigation
- You may withhold payment on the disputed amount (and related charges), during the
investigation. - You must pay any part of the bill not in question, including finance charges on the
undisputed amount.
What creditors can and cannot do while the dispute is under investigation
- The creditor may not take any legal or other action to collect the disputed amount and
related charges (including finance charges) during the investigation. - While your account cannot be closed or restricted, the disputed amount may be applied
against your credit limit. - The creditor may not threaten your credit rating or report you as delinquent while your bill is
in dispute. - The creditor may report that you are challenging your bill.
- The Equal Credit Opportunity Act prohibits creditors from discriminating against credit
applicants who exercise their rights. You cannot you cannot be denied credit because you've
disputed a bill.
If your disputed bill does contain errors and the bill is incorrect
- The creditor must explain to you, in writing, the corrections that will be made to your account.
- The creditor must credit your account.
- The creditor must remove all finance charges, late fees or other charges related to the error.
- If the creditor determines that you owe a portion of the disputed amount, you must get a
written explanation. You may request copies of documents proving you owe the money.
If your disputed bill does not contain errors and the bill is correct
- You must be told promptly and in writing how much you owe and why.
- You may ask for copies of relevant documents. At this point, you'll owe the disputed amount,
plus any finance charges that accumulated while the amount was in dispute. - You also may have to pay the minimum amount you missed paying because of the dispute.
- If you disagree with the results of the investigation, you may write to the creditor, but you
must act within ten (10) days after receiving the explanation. - You may indicate that you refuse to pay the disputed amount. At this point, the creditor may
begin collection procedures. However, if the creditor reports you to a credit bureau as
delinquent, the report also must state that you don't think you owe the money. The creditor
must tell you who gets these reports.
What if the creditor fails to follow the procedure
- If a creditor fails to follow the settlement procedure they cannot collect the amount in dispute,
or any related finance charges, up to $50, even if the bill turns out to be correct.
- For example: If a creditor acknowledges your complaint in 45 days which is 15 days too late
or takes more than two billing cycles to resolve a dispute, the penalty applies. The penalty
also applies if a creditor threatens to report to the credit bureaus or improperly reports to the
credit bureaus your failure to pay to anyone during the dispute period.
- Creditors must give you a written notice when you open a new account, and at other times,
that describes your right to dispute billing errors. - Creditors must provide a statement for each billing period in which you owe or they owe you,
more than one dollar. - Creditors must send your bill at least fourteen (14) days before the payment is due if you
have a period within which to pay the bill without incurring additional charges. - Creditors must credit all payments to your account on the date they are received, unless no
extra charges would result if they failed to do so. Creditors are permitted to set some
reasonable rules for making payments, say setting a reasonable deadline for payment to be
received to be credited on the same date. - Creditors must promptly credit or refund overpayments and other amounts owed to your
account. This applies to instances where your account is owed more than one dollar. Your
account must be credited promptly with the amount owed. If you prefer a refund, it must be
sent within seven business days after the creditor receives your written request. The creditor
must also make a good faith effort to refund a credit balance that has remained on your
account for more than six months.
What to do if the creditor violates the FCBA
- You can sue a creditor who violates the Fair Credit Billing Act (FCBA). If you win, you may be
awarded damages, plus twice the amount of any finance charge as long as it's between $100
and $1,000. The court also may order the creditor to pay your attorney's fees and costs. - Report the Creditors to the Federal Trade Commission (FTC). The FTC works for the
consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace
and to provide information to help consumers spot, stop, and avoid them. Visit the FTC at
www.ftc.gov.
To review the full Fair Credit Billing Act visit:
http://www.ftc.gov/os/statutes/fcb/fcb.pdf
Sample Fair Credit Billing Act Letter
The Fair Credit Billing Act (FCBA) provides for the prompt correction of errors on open-end credit
accounts such as department store credit cards and protects consumers' credit ratings while they
are settling disputes. Under this law, if a consumer is disputing a charge, creditors cannot report
the consumer's account as delinquent.
This law applies to open-end credit instruments, such as credit cards, revolving charge accounts,
and overdraft checking. Consumers who question an item are responsible for notifying the creditor
in writing within 60 days of receiving the bill. The creditor must acknowledge the notice within 30
days and may not do anything to damage the consumer's credit rating while the item is in dispute.
accounts such as department store credit cards and protects consumers' credit ratings while they
are settling disputes. Under this law, if a consumer is disputing a charge, creditors cannot report
the consumer's account as delinquent.
This law applies to open-end credit instruments, such as credit cards, revolving charge accounts,
and overdraft checking. Consumers who question an item are responsible for notifying the creditor
in writing within 60 days of receiving the bill. The creditor must acknowledge the notice within 30
days and may not do anything to damage the consumer's credit rating while the item is in dispute.
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