The Fair Credit Billing Act protects US consumers from unfair billing practices by creditors on open-end accounts like credit cards. Consumers have the right to dispute billing errors and are not liable for unauthorized charges or charges for goods or services never received. Creditors must investigate disputes and resolve them within two billing cycles. Consumers can take legal action if the creditor does not follow guidelines.
The Fair Credit Billing Act (FCBA) is a United States federal law that was created to protect American consumers from unfair billing practices imposed by creditors. It applies specifically to “open end” accounts, such as credit card and revolving debit accounts versus installment agreements or fixed-rate payment plans associated with certain types of loans. In addition, the law provides a forum for consumer dispute resolution. Because the FCBA is a modification of the American Lending Truth, specific consumer rights and dispute resolution procedures are outlined and governed by Title 15 of the United States Code, Section 1601.
Under the Fair Credit Billing Act, there are numerous billing errors that are subject to redress by the law. This includes errors related to incorrect charge amounts, purchase dates, or failure to apply payments or other credits to your account during the same billing period. There are also several safeguards in place. For example, the consumer may only be liable for unauthorized charges up to the first $50 United States Dollars (USD) initially, and not at all if the charges turn out to be illegal. Furthermore, the consumer cannot be held responsible for charges for goods or services never received or refused due to failure to meet expectations. Finally, charges cannot be applied for items for which the consumer has submitted a written request for verification or proof of purchase.
To initiate a billing dispute under the Fair Credit Billing Act, the consumer must first notify the creditor in writing of the details of the dispute within 60 days of the date we sent the invoice on which the error occurred. The letter must be sent by Certified Mail, Confirmed Delivery, or other method that produces a delivery receipt or acceptance. It should also be accompanied by copies of any relevant documentation supporting the claim, such as a receipt for payment or returned goods. While the consumer is responsible for paying any part of the invoice that is unaffected by the error, there is no obligation to pay any disputed charges.
In response to a billing dispute, the creditor must conduct an investigation and acknowledge receipt of the notice of dispute in writing within 30 days. Subsequently, the creditor must resolve the matter within two consecutive billing cycles or no later than 90 days after receipt of the consumer’s dispute letter. If the creditor does not follow these guidelines or imposes or threatens to impose collection procedures during the investigation period, the consumer has the right to bring a civil action against the creditor. Under the Fair Credit Billing Act, the consumer can be awarded double the amount of the imposed finance charges, as well as monetary damages and attorneys’ fees.
Protect your devices with Threat Protection by NordVPN
