There are few things more frustrating than receiving your monthly credit card bill and not understanding all of the charges included. You undoubtedly recognize the vast majority of your purchases, such as your fuel expenses, groceries, and dining out. What about the charges that do not occur with regularity on your bill? Did you take a vacation this month and rack up some extra dining charges? What about a shopping trip to a local outlet mall?
From time to time, billing errors may occur on your statement. In some cases, the errors are the result of innocent mistakes. Other times, billing errors are purposeful incidents meant to charge you for products and services you never used. The Fair Credit Billing Act (FCBA) gives you the power to fight back against errors on your bill.
Overview of the Fair Credit Billing Act
The Fair Credit Billing Act was enacted in 1974 as a federal law designed to work as an amendment to the original Truth in Lending Act. The purpose of this act is to protect consumers from unfair billing practices, while also providing an avenue of recourse for consumers when billing errors occur. The FCBA applies to open-end credit lines, such as credit and debit card accounts.
In the FCBA, consumer and creditors are provided guidelines to manage disputes between both parties when it comes to billing statements. On top of that, the act stipulates that any interest accrued as the result of a billing error must be dropped in the event that your dispute is successful.
What Constitutes a Billing Error under the FCBA
A primary goal of the FCBA was the establishment of definitions and examples of billing errors that fall under the provisions of the act. According to the FCBA, the following errors are identified as disputable:
- Charges not actually made by you, the consumer. For example, if your card is stolen and charges made before you can cancel it, you can dispute those charges and avoid liability.
- Inaccurate charge amounts. For example, if a waiter at a restaurant inaccurately reports your total bill, you can dispute the charge so the accurate amount is reflected.
- Charges for goods or services not received.
- Charges for goods or services not delivered as agreed upon. For example, if you’ve paid for a new product that does not arrive in the promised condition, you have the right to dispute the total charge.
- Charges for goods that were damaged upon delivery.
- Failure to properly reflect payments or credits to an account. For example, if you return an item to a retail store and it is accidentally placed on your account as another charge, rather than a credit.
- Calculation errors.
- Charges you request proof of or request clarification of.
- Statements that are mailed to the incorrect address.
- Charges for products/goods that differ significantly from those described at the time of purchase.
Financial liability is at the heart of the FCBA. You should not be held responsible financially for charges that are incorrect, inaccurate, or altogether falsified. Not only should you not be held responsible for these charges, you deserve the right to fight back against a creditor that insists you pay the charges regardless of the circumstances.
Correction of Billing Errors under the FCBA
If you’ve noticed errors on your credit accounts, the Fair Credit Billing Act provides you with a mechanism to fight those charges. Your first step is to send a written notice to your creditor disputing any charges you deem inaccurate or incorrect. In order to grab the attention of your creditor, the FCBA states that your written request must be submitted via mail to the “billing inquiries” office/address of the creditor.
Inquiries via telephone are not recognized as valid under the terms of the FCBA. Online notification is acceptable under the FCBA, provided that the creditor has a mechanism available through its website to submit disputes.
Once your written dispute has been received by a creditor, the agency has 30 days to acknowledge the dispute, investigate the claim, and either make the appropriate corrections to your account or send you a letter explaining why the charges are believed to be accurate. Your creditor has 90 days to either make the corrections or stand by its evaluation of the charge.
It is important for you to note here that you have the right to further information. If the creditor follows proper protocol and investigates your claim, but still finds the charges valid, you have the right to request copies of the documentation the creditor used to support validity of the disputed charges.
Additional Regulations under the FCBA
In an effort to avoid the issue of billing errors, the FCBA also provides additional guidelines and regulations that try to prevent clashes between consumers and creditors. Among those regulations are the following:
- Creditors must provide billing statements at least 14 days before the payment is due, allowing for a grace period before adding finance charges to your payments.
- When banks report payments as delinquent to a credit bureau, they must also report when a charge is disputed.
- Credit card companies are prohibited from blocking merchant discounts to consumers who pay with cash or check instead of credit.
- Your bank may not use money in your checking or savings account to pay a delinquent credit account you have open with that same institution.
- Under the FCBA, you have the right to sue a credit company in a dispute about the quality of the goods or services received, but only to the extent of the dollar amount of the charges in question.
Who Enforces the FCBA?
As with so many other consumer credit and lending acts, the Federal Trade Commission has a hand in the enforcement of the FCBA. The FTC is listed as the “overall enforcing agency,” though the Federal Deposit Insurance Act provides enforcement as it applies to compliance by banks.
You also have the right to pursue private litigation in any state or federal court that has legitimate jurisdiction over the parties involved in the dispute. You can recover actual damages, statutory damages up to double the inaccurate finance charges, and the cost of attorney fees. In the event that the illegal billing practice is widespread within the institution, you can seek to file a class action lawsuit seeking up to $500,000 or 1 per centum of the net worth of the creditor, whichever value is lesser.
Seek Help with the FCBA
The Fair Credit Billing Act is a complex law, and unless you’re a legal expert, you may feel overwhelmed. If you have noticed billing errors on your credit accounts and aren’t sure what recourse to take, you can contact the lawyers at Vullings Law. It is our job to understand the FCBA from front to back, and we’re here to advise you on your options and represent you in court if necessary. Contact us today if you need to challenge billing errors by your creditor(s).