The Fair Credit Billing Act

The Fair Credit
Billing Act
(“FCBA”) is a federal law Stop -the -harrassmentdesigned to protect you from unfair
credit billing practices.  The FCBA applies to open ended
credit accounts, such as credit cards, department store cards and
revolving credit accounts-a line of credit where your balance and
monthly payment fluctuate.  This Act provides guidelines for
both consumers and creditors to manage disputes regarding billing
statements.  Specifically, the FCBA provides an outlet for
consumer regarding billing disputes for merchandise purchased and
for complaints about the quality of goods and
services.     

If you have a dispute under the FCBA, you must follow the
procedures outlined in the statute but only as it applies to
billing errors.  Examples of billing errors include charging
the wrong account or amount, charges for goods that were never
received, failing to post payments and/or credits to your account,
failure to send goods to a current address.   To exercise
your rights, you must write a letter to the creditor at the
designated “billing inquiries” address with your name as it appears
on your billing statement, address, account number and an
explanation of the billing error you are complaining about. 
The letter must be received by the creditor within 60 days of
receipt of the disputed billing statement.  Similar to
disputing an item on your credit
report
, this letter should be sent certified mail, so that you
have proof of when it was sent and received by the creditor. 
Under the law, the creditor must respond to your dispute within 30
days of receipt and must provide a resolution within two billing
cycles.

The FCBA permits you to withhold payment during the
investigation process, however any remaining portion of the bill
must be paid.  During the investigation, the creditor may not
initiate collection
efforts
or take legal action on the disputed amount but it may
use the balance against your credit limit.  Much like the
Fair Debt Collection Practices Act
(“FDCPA”) a creditor is
prohibited from
threatening to damage your credit
by reporting you as
delinquent because of the dispute and potential creditors cannot
refuse to extend you credit on the grounds that you have a bill
under dispute.

Under the FCBA, if the creditor discovers an inaccuracy on your
bill during the investigation process, it must provide you with a
written explanation of the corrections to be made to your account
including any finance charges and/or late fees that may have
accumulated during the dispute process.  However, if the
creditor determines you actually owe the disputed amount, it must
provide you with a written explanation and if requested, copies of
documents used to reach its decision.  Should you disagree
with the results, you must notify the creditor within 10 days and
while you may refuse to make payment, it is now that the creditor
may make efforts to collect either by hiring a collection agency or
filing suit.  The FCBA, a consumer minded statute, prohibits a
creditor from collecting a disputed amount if it fails to follow
the outlined procedures. 

Related issues are discussed in the following blogs: Taking
Steps to Repair Your Credit
and Disputed
Accounts Reported on Your Credit

If you feel your rights have been violated under the FCBA,
contact SmithMarco P.C. for a free case
review
.