April 22, 2009


Several posts during the past couple of months have focused on consumer protection issues: Fair Debt Collection, Fair Credit Reporting, and Truth in Lending. Today I want to share some basic information about another important piece of consumer legislation -- The Fair Credit Billing Act.

This act is designed to protect consumer rights regarding billing errors on “open ended” credit accounts (such as credit cards).

Summary of FCBA provisions:
* Consumer is given 60 days after statement delivery to report a billing
error in writing
. Common types of billing errors include: Unauthorized charges; charges listing wrong date or amount; charges for goods/ services that weren’t received or were defective; merchants failing to properly credit returned merchandise; charges being posted multiple times for a single purchase; mathematical errors; failure to post payment; or failure to send bill to correct address.

* If your bill contains an error, the creditor must explain (in writing) the corrections that will be made to your account and must remove any late fees, finance charges, or other charges related to the error.

* Consumer may withhold payment on disputed amount during the investigation (it can [and likely will] count against your credit limit). [Be certain to pay the portion of balance (if any) that is not being disputed].

* Consumer must be provided a statement each billing period in which more than $1 is owed.

* Consumer must be provided written notice when a new account is open detailing the right to dispute billing errors.

* Creditor must resolve a dispute within two billing cycles (not more than 90 days) after receiving your letter.

* Creditor cannot threaten your credit rating or report you as delinquent during a dispute.

* Creditor must send bill at least 14 days before payment due date.

** Although the quality of goods is obviously not a “billing error,” if you use your credit or charge card to make the purchase, you can go through the same dispute process with the card as long as the purchase was at least $50, was in your home state, within 100 miles of your current billing address, and you had made a “good faith” effort to resolve the dispute with the seller first.

** Any violations of your FCBA rights can be filed online via the Federal Trade Commission Complaint Assistant Form.

Consumer credit is such a vital thing for most consumers – the ability to have protections in place to help consumers protect the credit they work so hard to build and develop is critical. They are only helpful, however, if you are aware of them!