Consumer rights under the Fair Credit Billing Act

Consumer rights under the Fair Credit Billing Act

Once you receive your credit card statement, you may assume that all the charges listed are correct. But at times, this may not be the case. Consumers can end up frustrated when they are billed for returned goods, charged twice for the same goods and services or when a payment is not credited to their account. Luckily, it is possible to correct these errors. You only need to notify the credit card company immediately you spot any error or unauthorized charges in your statement. But apart from being patient, you also should know the procedures that have to be followed to resolve the dispute. These procedures are usually provided by the Fair Credit Billing Act, FCBA and must be followed when settling the dispute. To be eligible for a dispute, the charges should be more than $50. You can also dispute charges for undelivered goods or services.

What you need to know about the Fair Credit Billing Act

Before the Fair Credit Billing law was passed, most consumers had problems with their credit rating due to late payment or nonpayment that were a result of inaccurate charges. Today, there are several protections that consumers enjoy when they make purchases using their credit cards. With these protections, you are able to receive compensation for any unauthorized charges. Inaccurate figures can also be removed from your billing statement and payment can be withheld when an error is made regarding your purchase.

When are you entitled for a dispute?

Disputes are requests, usually made in writing to your card issuing bank indicating that there is an inaccurate charge that should be removed from your billing statement. Consumers can request a dispute:

  • If the finance charges are a result of theft or fraud
  • When there is an inaccurate amount in your statement
  • If you are charged for goods that were damaged on delivery or were never received
  • When you need proof for a particular charge
  • If the bill was not sent to your current address when you had already informed the credit card company in writing about your change in address 20 days before the bill was sent

When requesting a dispute, there are several steps that should be followed. These steps depend on the circumstances that led to the issue. Consumers can file a dispute:

  • If a mistake was made by their credit card provider
  • If your card was used for fraudulent charges
  • When there were calculation errors in your statement
  • If the merchant failed to provide the purchased products or services

Here are the things you need to know when filing a dispute:

Consumers have a period of 60 days to dispute any incorrect charge

Once you spot an error in your billing statement, it is possible to dispute the charge, but this can only work when you act quickly. Once the card issuer mails your bill, you are given only 60 days to report any inaccurate charges. If you fail to dispute the charge within this time period, your request may still be honored, but your dispute will not be legally protected.

The dispute should be made through a certified mail

When a consumer notices a billing error and wants to dispute the charge, the dispute has to be mailed. This is because disputing in writing is more formal compared to phone calls. You also should ensure that your name, account number and the amount you are disputing are included in the letter. If you have any documentation, you can also include it in the letter.

It takes time for the investigation to be complete

Once the dispute is received, it takes 30 days for the card issuer to acknowledge that the billing error notice was received. They will then inform you that the complaint is being investigated. The dispute is usually resolved within two complete billing cycles. While under investigation, the undisputed charge is not reported to the credit bureaus as a late payment. The issuer is also not allowed to collect payment on the portion of the bill that is disputed. But as much as you don’t have to pay for part of the bill under dispute, the remaining amount has to be paid.

If you do not agree with the findings, you can challenge the investigation

Once your dispute is investigated and an error is found in your billing, the error must be corrected and you will be issued with a correction notice. Other financial charges relating to the dispute are also erased from your statement. If the investigation rules that you were correctly charged, you have to pay the debt, but you will still be provided with a copy of the investigation. If you do not agree with the findings, you can challenge it within 10 days of getting a written explanation.  

Does the fair credit billing act cover other consumer complaints?

There are also other issues that may not be a result of billing errors. This includes complaints about the quality of goods or services that you receive. With such complaints, you do not have to follow the dispute procedures. But if you bought the goods or services using a charge card or credit card, you are allowed to take the same legal action against the merchant in order to receive a refund.

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