Credit Card Glossary
Fair Credit Billing
Fair Credit Billing is a set of laws created to address such problems as being billed for merchandise you never received, being charged for the same item twice or a credit card company failing to record a payment to your account.
Sometimes to resolve these types of problems. It takes a little patience and knowledge of the dispute settlement procedures provided by the Fair Credit Billing Act (FCBA).
The Fair Credit Billing act applies to “open end” credit accounts, such as credit cards, and revolving charge accounts - such as department store accounts. It does not cover installment contracts - loans or extensions of credit you repay on a fixed schedule. Consumers often buy cars, furniture and major appliances on an installment basis, and repay personal loans in installments as well.
The FCBA settlement procedures apply only to disputes about “billing errors.”
For example:
• 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.
To take advantage of the law’s consumer protections, you must:
Write to the creditor at the address given for “billing inquiries,” not the address for sending your payments, and 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. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.
The creditor must acknowledge your complaint in writing within 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.
Here is an example of a letter that you would send to a credit card company regarding an error on your credit card bill.
Date
Your Name
Your Address
Your City, State, Zip Code
Your Account Number
Name of Creditor
Billing Inquiries
Address
City, State, Zip Code
Dear Sir or Madam:
I am writing to dispute a billing error in the amount of $______on my account. The amount is incorrect because (describe the problem). I am requesting that the error be corrected, that any finance and other charges related to the disputed amount be credited back to my account. I also expect to receive an accurate credit card statement that reflects these changes.
Please find enclosed copies of (use this sentence to describe any enclosed information, such as sales slips, payment records) supporting my complaint. Please investigate this matter and correct the billing error as soon as possible.
Sincerely,
Your name
Enclosures: (List what you are enclosing.)
Aside from giving you the right to dispute errors on your report the Fair Credit Billing Act also gives you other billing rights such as
Businesses that offer “open end” credit also must:
Confirm with a written notice when you open a new account
• provide a statement for each billing period in which you owe - or they owe you - more than one dollar.
• send your bill at least 14 days before the payment is due - if you have a period within which to pay the bill without incurring additional charges;
• credit all payments to your account on the date they’re received, unless no extra charges would result if they failed to do so.
• 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 the effort to refund a credit balance that has remained on your account for more than six months.
It is possible to sue a creditor who violates the laws of the 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 other court costs.