The Fair Credit Billing Act

Correction of Billing Errors and Other Rregulations of the Fair Credit Billing Act

This important piece of legislation is designed to give consumers a method of dealing with the errors in — or disputes about — billing that are almost certain to occur from time to time in credit card accounts. The difficulties can arise for any number of reasons. The company may fail to credit you for a payment you have made. It may charge you for an item bought on someone else’s card. It may fail to credit you for an item you returned. Sometimes, such errors can be corrected informally, through a phone call to the credit card company. But a phone call will not trigger the safeguards that the law provides, and for this reason wise consumers stick scrupulously to the procedures the legislation outlines.

First, the law permits you to withhold payment for any item while it is the subject of a dispute, and also to withhold payment of any minimum fees or finance charge that may be associated with it. But you are required to pay all other charges, and should. Then, the law requires you to write a letter to the company that issued the card, directing it to the office listed on your bill as the one authorized to deal with inquiries and complaints. The letter — which should be sent separately from your payment — should include your name, account number and date and should clearly and specifically describe the problem about which you are complaining, indicating the item you question, the amount of money involved and why you believe the company is in error in making the charge.

The law requires that the company receive this letter no later than 60 days after your bill was mailed to you; if you delay sending the message until nearly the end of that 60-day period, it might be advisable to send it by certified mail, requesting a return receipt. The company cannot threaten your credit rating or dispute your account because you question a bill, and it must acknowledge your letter in writing within 30 days and inform you of its decision no later than 60 days thereafter. If the decision is in your favor, your account must be corrected to reflect this fact. The charge — and any fees you may have paid in connection with it — must be removed or the credit entered. If the decision is not in your favor, the company must send you a letter providing you with proof– a copy of the sales receipt, for example — that the company is correct, together with a statement of what you owe, which may include any finance charges that have accumulated and any minimum payments you did not make during the period of the dispute.

If you find the company’s decision unacceptable, the law gives you at least 10 days to write again. But it also gives the company the right to report you as a delinquent and to take action to collect. Even then, however, you have the right to disagree in writing, to obtain from the company the name and address of every firm to which your delinquent status has been reported and to enter your side of the story in your credit record. When the matter is finally settled, the company must report the outcome to every organization that has received information about it.

If the error concerns a charge for goods not yet delivered, the credit card company cannot conclude that there is no mistake in the billing until the goods have actually arrived. If you fail to reach a satisfactory solution, contact your state banking commission if the card was issued by a bank in your state. Otherwise, write to your state attorney general’s office.