When reviewing your credit card bill, spotting an unfamiliar or incorrect charge can be alarming. The Fair Credit Billing Act (FCBA) ensures you have legal protections in such cases, providing a clear process to dispute errors and avoid paying for charges you believe are incorrect.
How the FCBA Protects Consumers
The FCBA applies to “open-end” credit accounts like credit cards and home equity lines of credit (HELOCs). It covers billing errors such as unauthorized charges, incorrect amounts, math mistakes, charges for goods or services not received, and failure to credit payments properly.
Steps to Dispute a Billing Error Under the FCBA
- Write a Dispute Letter: Within 60 days of the statement date with the error, send a detailed written dispute to the creditor, including your name, account number, the specific charge in question, and an explanation of why you believe it’s wrong.
- Use the Correct Address: Send your letter to the “billing inquiries” address provided on your credit card statement, not the usual payment address.
- Keep Proof of Delivery: Sending your dispute via certified mail is recommended to have confirmation of receipt.
Creditor’s Responsibilities
Upon receiving your dispute, the creditor must acknowledge it in writing within 30 days and resolve the issue within two billing cycles (not exceeding 90 days). During this time, you are not required to pay the disputed amount, nor will interest be charged on it. The creditor cannot report late payment on the disputed amount to credit reporting agencies during the investigation.
What the FCBA Does and Does Not Cover
The FCBA deals specifically with billing errors, not dissatisfaction with products or services. Examples of covered errors include fraudulent charges and incorrect billing amounts. It does not cover issues like disputes over the quality of purchased goods or services (except under limited conditions), debit card transactions, or installment loans.
Real-life Example
If you find a charge larger than expected, like Maria’s $530 chair charge instead of $350, writing a dispute letter referencing your receipt can lead the creditor to investigate and credit your account if the error is confirmed.
Tips for Using Your FCBA Rights Effectively
- Always submit disputes in writing to create a paper trail.
- Use certified mail for proof of delivery.
- Keep copies of all correspondence and supporting documents.
- Continue paying undisputed portions of your bill on time to avoid penalties.
Related Resources
For further details on dispute rights and credit protections, explore related topics such as the Consumer Financial Protection Bureau (CFPB), which enforces the FCBA, and understand your protections against unauthorized credit inquiries with our Credit Inquiry Letter article.
Authoritative References
- Federal Trade Commission: Fair Credit Billing Act overview (https://www.ftc.gov/legal-library/browse/statutes/fair-credit-billing-act)
- Consumer Financial Protection Bureau guidance on disputing credit card errors (https://www.consumerfinance.gov/ask-cfpb/how-do-i-dispute-an-error-on-my-credit-card-bill-en-1255/)
Understanding the FCBA empowers you to manage your credit accounts responsibly and protect yourself from improper charges effectively.
