The Fair Credit Billing Act: Dispute Incorrect Charges

One of the benefits of using credit and charge cards is that they come with built-in consumer protection. A federal law called the Fair Credit Billing Act gives people who use “open end” credit accounts the right to dispute fraudulent and unfair credit charges. This law does not apply to installment contracts (loans) or debit cards.

How the Fair Credit Billing Act protects you
The Fair Credit Billing Act (FCBA) offers quite a bit of consumer protection for credit and charge card users, including:

  • Your financial responsibility is limited to $50 if someone has used your credit account to make purchases without your permission.
  • You do not have to pay for goods and services that you didn't accept, were not delivered as agreed, or were not as promised.
  • The creditor must credit you for merchandise that you returned.
  • The creditor must send bills to your current address.

How to dispute a billing error
To dispute a charge, make sure you follow the process as outlined in the FCBA:

  • Write a letter to the creditor and describe the billing error. Include your full name, account number, and receipts or documents you may have that support your position.
  • Make and keep copies of everything, and send your letter certified mail, return receipt requested, making sure it reaches the creditor within 60 days after the first bill with the error was mailed to you.
  • The creditor must acknowledge your complaint in writing within 30 days after receiving your letter. They are required to resolve the dispute within two billing cycles after receiving your letter.
  • Continue paying for any parts of the bill that are not in dispute to avoid being assessed penalties and charged interest.

During the investigation

  • The creditor may report that you are challenging your bill.
  • The creditor cannot take legal or collection action against you, threaten your credit rating, or report you as delinquent.
  • If you apply for credit, a creditor can’t deny you because they see you are disputing a charge.

If the investigation finds that your bill does contain an error, the creditor will write you a letter explaining which corrections they will make to your account, and credit you with any finance charges, late fees or other error-related charges.

However, if the creditor finds the bill to be correct, you will be responsible for the disputed amount plus any accumulated finance charges, as well as the minimum amount you missed paying because of the dispute.

If you want to contest the results, write to the creditor within ten days of receiving the letter. Explain that you wish to continue disputing the charge. If you still see no results, and want to continue to fight the decision, you may file an appeal with the Federal Trade Commission at www.ftccomplaintassistant.gov or the Office of the Comptroller of the Currency at www.occ.treas.gov/customer.htm.

Revised January 2016.

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