What Is the Fair Credit Billing Act?

You are not responsible if your credit card bill has fraudulent charges. The Fair Credit Billing Act allows you to legally dispute billing errors and mistakes. Credit card companies have to investigate disputes and notify you of their findings.

Learn more about the FCBA dispute process and your credit card rights. For more information about your rights under the FCBA, talk to a consumer protection lawyer.

What Does the Fair Credit Billing Act Protect?

The Fair Credit Billing Act (FCBA) is a federal law that protects consumers using credit cards and other types of credit accounts. Credit card companies must investigate billing complaints and give cardholders certain protections in billing disputes. They also must post payments in a timely manner and refund overpayments or credit the account.

The FCBA followed the Truth in Lending Act (TILA), which requires mandatory disclosures of consumer credit terms. Together with the Fair Credit Reporting Act (FCRA), these consumer finance laws help protect consumers from unfair practices by credit bureaus and credit card issuers.

Can I Dispute a Credit Billing Charge?

You have the right to dispute charge mistakes or billing errors on your credit card bill. The most common reason for disputing your billing statement is unauthorized charges. Thieves can use a stolen card or your credit card information online to make unauthorized charges.

You aren’t responsible for unauthorized charges after you report theft or unauthorized use. Under the FCBA, you can only be liable for up to $50 in charges before reporting the theft. However, most major credit cards won’t allow you to pay anything for unauthorized use. Check your credit card company policy to ensure you understand what is covered and what is not.

If you don’t recognize a charge on your credit card, you can request proof of the charge from the creditor. You can dispute the charge if there’s no proof of purchase or a reasonable explanation for the charge.

How Does the Credit Dispute Process Work?

Before reporting an FCBA violation by your credit card provider, you must give the creditor a chance to resolve the dispute. Send a dispute letter to the credit card company using their billing inquiries address. Send it by certified mail to make sure it gets there. Also, bring proof of receipt.

You have to report the dispute within 60 days of getting the credit card statement with the error. The creditor must acknowledge the dispute within 30 days. Your creditor must investigate the dispute within 90 days, correct the mistake, or explain why it’s not an error.

Does the FCBA Apply to All Credit Accounts?

The FCBA applies to open-end credit accounts. An open-end account is an account you can continue to borrow from and repay. Credit cards are an open-end account that most people are familiar with. You can charge purchases on your credit card up to the credit limit. Of course, you have to pay back the amount borrowed. Types of open-end accounts where the FCBA applies include:

• Credit cards
• Charge cards
• Home equity lines of credit
• Personal line of credit

The FCBA doesn’t apply to debit accounts. Debit accounts are not open-ended because the money comes from your account savings. The FCBA also doesn’t apply to installment accounts, like auto loans or mortgage accounts.

What Are My Rights Under the Fair Credit Billing Act?

Under the FCBA, you can dispute billing errors, and the credit card company has to investigate. You won’t be responsible for credit card fraud after reporting fraud or identity theft. You can also dispute credit transactions for the wrong amount or a service never provided.

Chargebacks are another way the FCBA protects consumers. You can dispute a charge for buying a damaged product, not as advertised, or never delivered. If you initiate a chargeback, the credit card company can withdraw payment from the vendor. There is generally a time limit for chargebacks. It may take two or more billing cycles to investigate the disputed amount.

How Can I Report FCBA Violations?

A creditor that doesn’t offer you a chance to dispute a charge violates the FCBA. Your creditor also has to follow the FCBA dispute settlement procedures and timelines. If the creditor doesn’t follow the rules, they can’t collect the total charge, even if it is correct.

The Federal Trade Commission (FTC) enforces the Fair Credit Billing Act. To file a complaint against your creditor for FCBA violations, report your issues at ReportFraud.ftc.gov.

You can file a lawsuit against the creditor for FCBA violations. You can recover actual damages and up to double the finance charges. You can also ask the court to make the creditor pay your legal and attorney fees.

Can a Lawyer Help With Fair Credit Billing Violations?

Many borrowers think they can’t take on the credit card companies. However, the FCBA gives you legal rights to hold credit card companies accountable for unfair billing practices. You can even file a claim against your credit card company in small claims court. For more information about your legal rights under the FCBA, talk to a consumer protection lawyer. A lawyer can review your case and explain your legal options. Your lawyer can negotiate with the credit card company to settle the dispute and help you recover your money. They can also take the creditor to court. Contact a consumer protection attorney to protect your legal rights.