The Fair Credit Billing Act establishes specific billing rules for creditors, specifies what constitutes a billing error, permits you to submit a dispute, and more.
Definition of the Fair Credit Billing Act
The Fair Credit Billing Act establishes specific billing rules for creditors, specifies what constitutes a billing error, permits you to submit a dispute, and more. You have the right to challenge any billing mistakes you notice on your account statements under the FCBA. The law also limits your liability for the disputed amount while an inquiry is ongoing and requires creditors to reply to your dispute immediately.
- Acronym: FCBA
How the Fair Credit Billing Act Works for Consumers
The Fair Credit Billing Act specifies a number of billing issues that consumers may contest. These may consist of:
Unauthorized charges are ones that you weren’t responsible for. They might happen as a result of credit card fraud. According to the FCBA, your maximum liability for unauthorized transactions is $50; however, many credit card companies offer zero liability protection on all fraudulent charges, so as long as you follow specific guidelines, you’re not responsible for any charges made by a thief.
- Inaccurate charges: Charges that are not accurate may contain dates or dollar amounts that are off. Your charge is incorrect, for instance, if you spent $10 at Starbucks but your statement shows that you charged $25.
- Payments made for goods and services you did not receive: Let’s imagine that you purchased a pair of boots online. You have a disagreement case if you were charged but never received them.
- Uncertain charges: If you see a charge and think it’s incorrect, you can request written documentation of your error or an explanation of the item’s nature and the circumstances surrounding its receipt.
By checking your monthly billing statements, you can determine if a billing error has been made. Additionally, you can keep an eye on your credit by going to a website like AnnualCreditReport.com. To check for mistakes or discrepancies, you can request free copies of your credit reports from Equifax, Experian, and TransUnion (the three main credit bureaus).
How the Fair Credit Billing Act Works for Creditors
The Fair Credit Billing Act sets specific criteria for creditors in addition to providing consumer rights. They must give you a written notice when you open an account. They must also mail your bill at least 14 days before your minimum payment deadline, at least 21 days before your payment is due, and at least before the end of any applicable grace period.
Creditors must credit any overpayments or issue cash, checks, or money orders as a refund if necessary. If your account has had a negative balance for more than six months, this is true. In addition, creditors must post payments to your account on the same day they are received.
Fair Credit Billing Act Example
Imagine yourself and your family being on a beach vacation. You had a terrific time, but when you got home, your credit card bill was loaded with charges from your trip. A $250 charge to a seafood restaurant that you didn’t visit is one of the charges.
The FCBA views this as a fee for services that you did not obtain. As a result, you are welcome to challenge it in writing to the creditor. You could not be liable for the $250 supper you never actually received if you do this within 60 days.
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