At one point or another, everyone has had problems with billing on an account. Maybe you bought a new dining room table for which your credit card company billed you twice. Or maybe you returned that new dress you bought that didn’t fit, but you still were billed for it. Sound familiar? If so, you can benefit from being aware of your rights under the Fair Credit Billing Act, or the FCBA, which gives you the power to resolve these types of disputes with the credit card company or bank in question.
The FCBA applies only to open end or revolving credit accounts, like major credit cards and department store credit accounts. Keep in mind that the FCBA does not apply to loans paid in installments, like car loans or mortgages.
The FCBA also applies only to billing errors. These types of disputes include charges on your account that you did not authorize, charges on the wrong date or for the wrong amount, mathematical errors in calculating accounts, problems with credits or refunds for returned items or items that you didn’t receive, and bills that are sent to a wrong address.
You also have to take certain actions within a certain timeframe in order to use the FCBA. For example, you have to contact the creditor within sixty days of the date that you first received notice of the billing error. You also have to contact the creditor in writing, at its address for “inquiries” rather than its payment address, and provide specific information including your name, address, account number, and description of the problem. If you comply with all of these rules, then the FCBA requires the creditor to acknowledge your dispute within 30 days, and to resolve your dispute about the billing error within two billing cycles, or not more than 90 days, of the date that the creditor received notice of the problem.
While your creditor is in the process of resolving your dispute, you don’t have to pay for the charges resulting from the billing error. However, you do have to pay any other charges that are unrelated to the dispute. Similarly, during this time period, the creditor can’t take legal action against you for the billing dispute, and can’t report negative information about you on your credit report related to the dispute.
If you are right, and there really is a billing error, then the creditor has to fix it, and explain to you in writing how the problem will be fixed. If you are wrong, though, and there is no billing error, then the creditor must tell you, in writing, how much you owe and why. You are also entitled to documentation of the amount that the creditor says you owe. If you still disagree, then you need to contact the creditor within 10 days to further dispute the billing error; however, keep in mind that the creditor can start to take collection actions against you at this point if you still don’t pay the bill.
Finally, if a creditor doesn’t follow the FCBA with respect to a claimed billing error, then the creditor can be penalized by not being able to collect the amount in dispute, up to $50.00. Therefore, it is important to know your rights under the FCBA in order to properly deal with billing disputes.