Credit Card Protections for Consumers

Although some financial experts warn against using credit, credit cards are essential for many consumers. However, using credit can lead to complications such as fraudulent charges, billing errors, and identity theft.

Despite the possible pitfalls, you have legal protection when using credit. A substantial collection of consumer protection laws provides important consumer safeguards. Talk to a consumer protection lawyer if you’re having trouble with your credit card issuer.

Legal Protections for Credit Card Users

You have several legal protections as a credit card user, including the Fair Credit Billing Act, Fair Credit Reporting Act, Fair and Accurate Transactions Act, and the Credit Card Accountability Responsibility and Disclosure Act.

Fair Credit Billing Act

The Fair Credit Billing Act (FCBA) is enforced by the Federal Trade Commission (FTC). The FCBA is a federal law protecting cardholders from billing errors on open-end credit accounts. This includes credit cards and store charge accounts. It also provides a process for dealing with billing errors and disputes. For example, credit card issuers must start investigations promptly.

Billing errors include:

• Charges on your credit card bill that you didn’t make
• Failure to properly include credit card payments on your account
• Charges for goods or services you didn’t receive

The FCBA doesn’t apply to debit card transactions or disputes over the quality of goods or services.

Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) governs access to your credit report and the collection of your credit information by credit reporting agencies (CRAs). The major credit reporting agencies are Equifax, Experian, and TransUnion. Disputed information must be investigated, and negative information must be removed after seven years.

Fair and Accurate Transactions Act (FACTA)

The Fair and Accurate Transactions Act (FACTA) aims to prevent identity theft and credit-related fraud. Creditors and reporting agencies must protect consumers’ identifying information and take steps to guard against identity theft.

Credit Card Accountability Responsibility and Disclosure (CARD) Act

The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) is a federal law that protects you from unfair credit card practices. The CARD Act limits the fees charged for opening a credit card account. It also requires that credit card issuers provide disclosures in monthly statements, such as how long it will take to pay off the balance if only minimum payments are made. 

Dispute Resolution Processes

Credit card issuers are legally required to follow specific procedures when handling disputes. The FCBA limits your liability for unauthorized charges to $50. You have 60 days to dispute charges over $50.

• Monitor your credit card statement: Review your credit card statement carefully to spot errors.
• Notify the credit card issuer: If you see an error, contact your credit card company in writing within 60 days of receiving the statement that contains the transaction. Your letter should include your name, account number, the charge you’re disputing, and an explanation of the issue.
• Provide documentation: Gather and attach documents, such as receipts and emails, to your letter that support your complaint.
• Wait for the investigation process: Your credit card issuer must acknowledge your dispute within 30 days of receiving written notice and investigate the matter. The disputed charge wasn’t collected during the investigation, and interest and fees weren’t added.
• Receive a resolution: The issuer must resolve the dispute within two billing cycles of receiving your letter. If the issuer finds in your favor, the charge is corrected. You’ll receive a detailed explanation if the issuer decides the charge is valid.

If you are unsatisfied with the outcome, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).

Tips To Prevent Credit Card Fraud

If you suspect credit card fraud, you should contact your credit card provider as soon as possible.Credit card fraud involves the unauthorized use of your credit or credit card information to make purchases or open new credit card accounts.

Here are some tips on preventing credit card fraud:

• Review credit card and bank statements regularly: Report unknown charges to your card issuer immediately.
• Review your credit report regularly: You’re entitled to one free copy of your credit report every 12 months from each of the three nationwide credit bureaus. You can get a report from www.annualcreditreport.com. You can dispute inaccurate information.
• Request a credit freeze: This will prevent anyone from accessing your credit report without your permission.
• Shop from websites that use encryption: This is a form of data security. Look for a lock icon near the URL. Avoid making purchases or logging in to your credit card account while using public wi-fi.
• Create strong passwords: Try including random combinations of letters, numbers, and special characters. Change them frequently. Choose a unique password for each site.
• Watch out for phishing scams: Don’t click on links in unsolicited text messages, emails, or phone calls. You could inadvertently install software on your device that captures your passwords and account information. Don’t provide personal or financial information unless you know the request is legitimate. Call the financial institution directly or go directly to the website.
• Watch out for skimming scams: Card skimmers are devices secretly placed on or near a card reader. They’re often found at retailers, gas stations and ATMs. If you see something unusual around the card slot, don’t use the machine and alert an employee.
• Take advantage of two-factor authentication: This is only available if your credit card issuer offers it. Two-factor authentication means a code will be sent to your device to approve the charge.

The Role of Credit Card Issuers in Protecting Consumers

The major credit cards — American Express, Discover, Mastercard, and Visa — offer zero liability protection. You won’t be liable for unauthorized charges made with your credit card if you report them promptly. Credit card issuers take on much of the financial liability for credit card fraud. So, they have systems in place to monitor accounts for fraud and unusual activity.

Get Legal Help

Credit card fraud affects millions of Americans every year. If your bank account or credit card is compromised, speak with a consumer protection lawyer for legal advice and guidance.