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Billing & Credit Reporting Violation


Fair Credit Billing Act

The Fair Credit Billing Act (FCBA) was adopted in 1974 to protect consumers from unfair or prejudicial billing practices. This federal law allows credit cardholders a method to dispute incorrect credit card billings. If one follows the correct procedure, the cardholder can dispute the charges and temporarily withhold payments on the disputed amount without affecting one’s credit score. The FCBA also prescribes certain additional consumer rights and protects the cardholder from fraudulent charges.


What is the correct procedure to dispute a charge?

1. The cardholder has a very limited period of time for which to dispute a charge. Accordingly, the cardholder must be ever vigilant and scrutinize each monthly card statement. After the statement has been mailed, the cardholder only has 60 days within which to report a billing error.


2. If a billing error is found, one should file the dispute in writing with the credit card company. In fact, it would be a good practice to send the dispute letter via certified mail so that the date and the dispute can be documented. The appropriate address to send the dispute notice is to “billing inquiries” and not to the same address that you send your payments. Make certain the dispute is in written form since merely telephone calls have been found to be non-compliant with the FCBA. Further, one should make certain that the letter includes your name, your address, account number and the description of the disputed charge.


3. The credit card issuer has 30 days to acknowledge your written dispute. Thereafter, the card issuer has to complete its investigation within two (2) billing cycles. Through this investigative period, the card issuer is not allowed to report the disputed charge as a late payment. Furthermore, any attempt to collect the disputed charge during this investigative stage would be a violation of the FCBA.


4. The card issuer must provide you with a written explanation of its findings. If the investigative report by the card issuer finds that the charge is valid, one still can challenge the report findings. This challenge must be in writing, and one has only ten (10) days after receiving the report to challenge its findings. A challenge will not stop any further collection attempts, but it does force the credit card issuer to place a “dispute” notice on your credit report if you fail to make payment on the disputed charge.

It is time to act!


What are typical Credit Card billing errors?

The following are common errors that are often found pursuant to the FCBA:


1. Credit card statements mailed to an incorrect address.
2. Failure to properly set forth payments or charges on the account.
3. Charges for items that were never received.
4. Charges set forth on the statement in the wrong amount.
5. Charges reflecting the purchase of fraudulent services or defective goods.
6. Statements reflecting calculation errors for payments, interest or charges.


Does the FCBA provide consumers with any other rights?

A creditor that provides open ended credit must adhere to the following requirements:


1. If there is any amount due and owing, the creditor must provide a written statement for each billing period.
2. Whenever a consumer opens a new account, the creditor must provide written notice of the opening to the consumer.
3. The creditor must send the written billing to the consumer at least 14 days before the payment is due.
4. All consumer overpayments must be immediately credited.
5. All consumer payments must be credited to the consumer’s account on the day the payment has been received.


What are the remedies for a FCBA Violation?

If a creditor fails to precisely follow the FCBA procedure, the creditor will be precluded from collecting the amount in dispute. For example, if the creditor does not acknowledge the consumer’s complaint of the disputed charge within 30 days, the creditor will not be able to collect the disputed amount. Further, any violation of the FCBA authorizes the wronged consumer to file an independent action against the creditor for damages. If successful, the consumer can be awarded damages, twice the amount of interest charged, and attorney fees and cost.


The FCBA provides consumers with a very powerful shield to protect against inappropriate billing practices by credit card companies. However, as with all legal remedies, one must remain vigilant when raising these defenses. Unless the consumer has adequate knowledge with the workings of the FCBA, the best approach would be to immediately contact a competent law firm that has experience in such matters to ensure that your rights are well protected.

It is time to act!