Understanding Your Consumer Rights

Credit card billing errors can be stressful. The concern is that you’ll be required to pay for goods or services that you didn’t authorize, or were made properly aware of. The good news is there are federal protections that allow you to dispute a credit card charge without the fear of any adverse action from your credit issuer during the investigation phase.

It can be a rude awakening. You get an alert, or a credit card statement, that shows a charge that you never agreed to. Perhaps, the charge stems from an item you’d returned, or never received in the first place. Maybe you notice multiple charges for one item, also known as double billing. Regardless of what caused the disputed charge, you’ll want to understand the Fair Credit Billing Act (FCBA), a federal law that was put into place almost 50 years ago, back in 1974.

What is the Fair Credit Billing Act?

The Act is an amendment to the Truth in Lending Act, which came into law in 1968 as a means of providing consumer protection against creditors and lenders.

FCBA was designed to prompt creditors to provide written acknowledgment of a consumer billing complaint and ensure the matter is investigated in a timely manner. The law also forbids creditors from taking any adverse action against a consumer’s credit standing until the investigation has been completed. The amendment also requires that creditors post payments made to the consumer’s account swiftly, and issue refunds or credits for any overpayments that were made.

What Types of Credit Card Charges Can You Dispute Under the FCBA?

Unauthorized Charges: If someone steals your card and uses it, the FCBA limits your responsibility to no more than $50. Most credit issuers provide zero-liability protection when it comes to fraudulent and unauthorized charges.

Charges for Products Not Delivered as Promised: If you didn’t receive an item you ordered, and it was delivered to the wrong address, or not delivered at all, you could open a dispute.

Bills Sent to an Incorrect Address: You will have to have provided your current address at least 20 days before the end of a billing period for this to be a valid reason for the dispute.

Charges with Incorrect Dates and Amounts: If the purchase displays an incorrect date or amount, it can be disputed. This doesn’t mean the charge is immediately invalidated, rather, it simply means that a dispute can be requested.

Other Questionable Charges: If you believe a charge is erroneous or questionable, you have the right to ask for written proof of the charge or an explanation of it, and the creditor is obligated to validate the charge.

Disputing a Credit Card Billing Error

It is highly recommended that if you decide to dispute a billing error and use the FCBA as the basis for your dispute, you send written correspondence to the credits that detail your concerns and use certified mail that provides a receipt upon delivery.

Make sure that your correspondence is sent as soon as possible. The FCBA requires dispute letters to be received by the creditor within 60 days from when they sent the original bill that includes the disputed charge.

Note: This doesn’t mean they need to receive it within 60 days from when you received the statement, it’s 60 days from when they sent it. The rule of thumb is to act as quickly as possible to avoid any invalidation of the FCBA protections.

Once the credit card company is delivered your dispute letter, they have a maximum of 90 days, or two billing cycles, to resolve your concerns. You aren’t obligated to pay the disputed amount while it is investigated. Once the investigation is over, you may not have to pay, or just a portion of the disputed amount.

If you don’t receive the resolution you’re looking for, keep in mind that the creditor’s word isn’t final. You have the right to sue if you believe the credit card issuer isn’t following the FCBA rules. If the court sides with you, under the FCBA rules, the creditor would be responsible for attorney’s fees and any damage deemed appropriate based upon your claim.

Disputing Other Credit Card Charges

If, for instance, you discover fraudulent activity, you may want to deal with the issue immediately by closing your account. The quickest way to handle this, and to alert your credit card company of the fraudulent activity, would be to call them by phone. This could expedite a resolution; however, it is important that if you want to rely on the protections afforded to you by the FCBA, you must also mail your dispute to the appropriate address, within the same time frame as if you were filing a billing error dispute, which is sending it within 60 days of the bill being sent to you.

You are only liable for up to $50 under FCBA protections, though most major issuers offer zero-liability protection for their cardholders.

Disputing Quality of Goods or Services Rendered

If you receive what you deem to be damaged or poor-quality goods or services from a merchant, you may be entitled to request your credit issuer to withhold charges and have them investigate on your behalf.

Note: You must exhaust a good-faith effort to resolve your dispute directly with the merchant first. Only then, you may request your creditor to investigate the charge, as long as it meets two specific items of criteria, with limited exceptions.

• The purchase amount is required to be $50 or more

• You must have made the purchase within your home state or within 100 miles of your residence

If you meet the above criteria you will need to notify your creditor immediately that you wish to stop or withhold any payments due to your dissatisfaction with the goods or services you purchased, and that you’ve already attempted to resolve with the merchant. You’ll need to provide any evidence to support your claim.

Potential Credit Card Dispute Outcomes

The good news is that federal laws provide protection for consumers to dispute billing errors and fraudulent credit card charges.

Having federal protections in place doesn’t mean that you won’t have to ultimately pay it. Rather, the protections are in place to ensure that you are afforded a swift resolution to your concerns and that you can pursue legal recourse should you not receive the results you pursued.

Also, some credit issuers have expanded consumer protections. It’s important, that when you seek and open new lines of credit, you review the terms carefully and decide if they are right for you.

Mistakes happen. You’ll want to stay vigilant by reviewing your statements and purchases in a timely manner. If something looks out of place, be sure to voice your concerns and follow the protocols set forth by the FCBA in order to improve your chances of a favorable resolution.