How to Understand the Fair Credit Billing Act

The Fair Credit Billing Act was passed in 1975 to offer an avenue of resolution for consumer disputes with credit card companies. The law also caps consumer liability in cases where there has been unauthorized credit card use. Here's how it works.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Computer with Internet access

1. Know the law. The Fair Credit Billing Act addresses unauthorized charges, charges that reflect the wrong date or amount and charges for products that weren't accepted by you or weren't delivered. It also covers math errors, failure to post credits and payments, and failure on the part of creditors to send bills to the correct address.

2. Know your rights. While the bill remains in dispute, you may withhold payment of the portion under contention, along with all related interest charges.

3. Understand that disputing a bill does not hurt your credit rating. By law, the creditor may not report you as delinquent while the bill is in dispute.

4. Protect your rights. If you feel you've been treated unfairly by a creditor who is unwilling to make amends, file a complaint with the Federal Trade Commission (see Resources below). You also may sue the creditor with the help of an attorney experienced in consumer law.

Tips & Warnings

• Understand the scope of the Fair Credit Billing Act. The Act covers open end credit accounts such as credit cards. The law also covers revolving charge accounts such as department store accounts. Installment contracts are not covered. These are extensions of credit or loans in which a fixed schedule of repayment is required. Car loans and loans taken to purchase furniture or major appliances are installment contracts.
• If you feel that you have been the victim of a billing error, contact the creditor, but do not send your complaint to the address to which your payments are sent. Send the complaint to the address listed on your statement under "billing inquiries." Make sure that you've included your name, address, account number and a description of the billing error in your correspondence. Your letter must be sent so that the creditor receives it within 60 days of the erroneous billing.

Who Can Help Sponsored

• A Bad Credit Score is 598 or Below. Checking your own Credit Report won't affect your score! See instantly for $0 by Experian® www.FreeCreditReport.com