Fair Credit Billing Act Regulations
The Fair Credit Billing Act affects companies providing "open-ended credit" such as credit cards and store cards. It allows customers to dispute billing errors and have the relevant payments put on hold until the card company has investigated the dispute. Cardholders cannot have their credit records harmed as a result of filing such a dispute.
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Scope
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The FCBA allows consumers to dispute a range of billing errors. These include errors with the charge itself, such as the wrong amount being applied, a calculation error, problems with credits incorrectly applied to an account, or simply a listed charge that the consumer did not make. These also include charges for goods that were not delivered or arrived in a damaged condition (and were rejected by the cardholder).
The FCBA does not cover the quality of goods (beyond damage in transit), though the act does give cardholders the right to sue the card provider under state law in the same way as the retailer. This right is not exercised through the FCBA, but rather in state courts.
Dispute
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Under the FCBA, a cardholder has the right to file a dispute about a billing error. To do this, the cardholder must write to the billing inquiries department of the card company within 60 days of the relevant bill being mailed. The card company must then acknowledge the complaint within 30 days of receiving it. The company must resolve the dispute within two billing cycles of receiving the complaint, or within 90 days, whichever comes first.
While the dispute is open, the cardholder does not have to pay the disputed amount or associated fees such as interest or late fees. The amount can be counted against the cardholder's credit limit during this time.
If the card company concludes the consumer was correct, the disputed amount and associated fees are removed from the account. If the card company concludes the original bill was correct, the cardholder becomes responsible for paying the disputed amount and associated fees.
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Credit Rating and Legal Action
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While a dispute is open, the card company cannot take legal action to collect the money, or threaten the customer's credit rating. It may report that the bill is in dispute. If the card company rejects the disputed claim, the cardholder can write within 10 days to contend this decision and refuse to pay the amount -- though this does not prevent the card company taking action to recover the money, they cannot report the non-payment to a credit bureau without also noting the dispute.
Other Rights
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Under the FCBA, a card company must provide a statement in each billing period in which the cardholder owes, or is owed, more than a dollar. Bills must be sent at least 14 days before payment is due. Both payments and credits must be applied to accounts promptly, usually on the same day.
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