What Does the Fair Credit Billing Act Do for Me?

Published January 7, 2013 by

Have you ever heard of the Fair Credit Billing Act? It’s an amendment to the federal Truth in Lending Act. The Fair Credit Billing Act is a way to protect consumers with open-ended credit accounts, such as credit cards and department store charge cards, from being billed unfairly.

Providing Protection Against Billing Errors

Thanks to the Fair Credit Billing Act, consumers are able to dispute charges made in error on their bills. Some examples of errors that are disputable include the following:

  • Charges in the wrong amount
  • Unauthorized charges
  • Calculation errors
  • Charges for goods or account statements being mailed to the wrong address
  • Charges for goods that weren’t delivered on time
  • Charges for goods that were damaged during delivery
  • Inaccuracies to statements, reflecting credits or payments to the account

What The Fair Credit Billing Act Allows Consumers To Do

The Fair Credit Billing Act allows consumers to, in writing, contact the issuer of their credit/charge card and inquire about any issues they have with their account statements. If you have any disputes, you must send a letter via mail to the billing inquiries address that is listed on the statements. That address is different from where you would send your payment.

In the letter, you should make sure your address, telephone number and credit card account number are all clear, and you must detail the issue(s) you see with your statement. Be sure to include a photocopy of your statement with the issue(s) highlighted as enclosures to the letter. This must be done within 60 days.

After the creditor has received your letter of dispute, they have 30 days to acknowledge you and investigate the claim. After that, the creditor has 90 additional days to either make the adjustment to the account, if there is an adjustment to be made, or to send a letter back explaining why no adjustment is necessary. If the creditor finds there was no error in your account statement, you as the consumer have the right to request any documentation that the creditor used to support its findings. This, again, must be done in writing.

Other Regulations of the Fair Credit Billing Act

Besides allowing a consumer to question charges on their account statements, the Fair Credit Billing Act mandates the following things: 

  • Statements must be sent at least 14 days before the bill is due.
  • There must be a grace period before finance charges or penalties are put into place due to a late payment that was stuck in the mail.
  • If a creditor is going to report late payments to the credit bureaus, they must also report when there is a disputed charge.
  • There can be no discount for someone who pays by cash versus by check, or vice versa.

While the Fair Credit Billing Act is in place to protect consumers, it shouldn’t be abused. Remember that all inquiries under the act must be done in writing, and to be on the safe side, make copies of all correspondence to keep for your records.