|The Commission is headed by five Commissioners, nominated by the President and
confirmed by the Senate, each serving a seven-year term. The President chooses
one Commissioner to act as Chairman. No more than three Commissioners can be of
the same political party.
Have you ever been billed for
merchandise you returned or never received? Has your credit card
company ever charged you twice for the same item or failed to credit
a payment to your account? While frustrating, these errors can be
corrected. It takes a little patience and knowledge of the dispute
settlement procedures provided by the Fair Credit Billing Act (FCBA).
The law applies to "open
end" credit accounts, such as credit cards, revolving charge
accounts - such as department store accounts - and overdraft
checking accounts. It does not cover installment contracts - loans
or extensions of credit you repay on a fixed schedule. Consumers
often buy cars, furniture and major appliances on an installment
basis, and repay personal loans in installments as well.
What types of disputes are covered?
The FCBA settlement procedures apply only to disputes about
"billing errors." For example:
||Unauthorized charges. Federal law
limits your responsibility for unauthorized charges to $50.
that list the wrong date or amount.
||Charges for goods and services
you didn't accept or weren't delivered as agreed.
||Failure to post payments and other credits, such as
to send bills to your current address - provided you supply a change
of address at least 20 days before the billing period ends.
charges for which you ask for an explanation, or written proof of
purchase along with a claimed error or request for clarification.
take advantage of the law's consumer protections, you must:
||Write to the creditor at the address
given for "billing inquiries," not the address for sending
your payments, and include your name, address, account number and a
description of the billing error.
||Send your letter so that it
reaches the creditor within 60 days after the first bill containing
the error was mailed to you.
Send your letter by certified mail,
return receipt requested, so you have proof of what the creditor
received. Include copies (not originals) of sales slips or other
documents that support your position. Keep a copy of your dispute
City, State, Zip Code
Your Account Number
Name of Creditor
City, State, Zip Code
Dear Sir or Madam:
I am writing to
dispute a billing error in the amount of $______on my account.
amount is inaccurate because (describe the problem). I am requesting
that the error be corrected, that any finance and other charges
related to the disputed amount be credited as well, and that I
receive an accurate statement.
Enclosed are copies of (use this
sentence to describe any enclosed information, such as sales slips,
payment records) supporting my position.
Please investigate this
matter and correct the billing error as soon as possible.
Your name Enclosures: (List what you
The creditor must acknowledge your
complaint in writing within 30 days after receiving it, unless the
problem has been resolved. The creditor must resolve the dispute
within two billing cycles (but not more than 90 days) after
receiving your letter.
What happens while my bill is in
You may withhold payment on the disputed amount (and
related charges), during the investigation. You must pay any part of
the bill not in question, including finance charges on the
The creditor may not take any legal
or other action to collect the disputed amount and related charges
(including finance charges) during the investigation. While your
account cannot be closed or restricted, the disputed amount may be
applied against your credit limit.
Will my credit rating be affected?
The creditor may not threaten your credit rating or report you as
delinquent while your bill is in dispute. However, the creditor may
report that you are challenging your bill. In addition, the Equal
Credit Opportunity Act prohibits creditors from discriminating
against credit applicants who exercise their rights, in good faith,
under the FCBA. Simply put, you cannot be denied credit simply
because you've disputed a bill.
...the bill is incorrect? If your
bill contains an error, the creditor must explain to you - in
writing - the corrections that will be made to your account. In
addition to crediting your account, the creditor must remove all
finance charges, late fees or other charges related to the error.
If the creditor determines that you
owe a portion of the disputed amount, you must get a written
explanation. You may request copies of documents proving you owe the
...the bill is correct? If the
creditor's investigation determines the bill is correct, you must be
told promptly and in writing how much you owe and why. You may ask
for copies of relevant documents. At this point, you'll owe the
disputed amount, plus any finance charges that accumulated while the
amount was in dispute. You also may have to pay the minimum amount
you missed paying because of the dispute.
If you disagree with the results of
the investigation, you may write to the creditor, but you must act
within 10 days after receiving the explanation, and you may indicate
that you refuse to pay the disputed amount. At this point, the
creditor may begin collection procedures. However, if the creditor
reports you to a credit bureau as delinquent, the report also must
state that you don't think you owe the money. The creditor must tell
you who gets these reports.
If the creditor fails to follow the
procedure... Any creditor who fails to follow the settlement
procedure may not collect the amount in dispute, or any related
finance charges, up to $50, even if the bill turns out to be
correct. For example, if a creditor acknowledges your complaint in
45 days - 15 days too late - or takes more than two billing cycles
to resolve a dispute, the penalty applies. The penalty also applies
if a creditor threatens to report - or improperly reports - your
failure to pay to anyone during the dispute period.
An important caveat: Disputes about
the quality of goods and services are not "billing
errors," so the dispute procedure does not apply. However, if
you buy unsatisfactory goods or services with a credit or charge
card, you can take the same legal actions against the card issuer as
you can take under state law against the seller.
To take advantage of this protection
regarding the quality of goods or services, you must:
||Have made the purchase (it must be
for more than $50) in your home state or within 100 miles of your
current billing address.
||Make a good faith effort to resolve the
dispute with the seller first.
The dollar and distance limitations
don't apply if the seller also is the card issuer - or if a special
business relationship exists between the seller and the card issuer.
Other billing rights
offer "open end" credit also must:
||Give you a written notice when you
open a new account - and at certain other times - that describes
your right to dispute billing errors
||Provide a statement for each
billing period in which you owe - or they owe you - more than one
||Send your bill at least 14 days before the payment is due -
if you have a period within which to pay the bill without incurring
||Credit all payments to your account on the date
they're received, unless no extra charges would result if they
failed to do so. Creditors are permitted to set some reasonable
rules for making payments, say setting a reasonable deadline for
payment to be received to be credited on the same date
credit or refund overpayments and other amounts owed to your
account. This applies to instances where your account is owed more
than one dollar. Your account must be credited promptly with the
amount owed. If you prefer a refund, it must be sent within seven
business days after the creditor receives your written request. The
creditor must also make a good faith effort to refund a credit
balance that has remained on your account for more than six months.
Suing the creditor
You can sue a creditor who violates the FCBA. If
you win, you may be awarded damages, plus twice the amount of any
finance charge - as long as it's between $100 and $1,000. The court
also may order the creditor to pay your attorney's fees and costs.
If possible, hire a lawyer who is
willing to accept the amount awarded to you by the court as the
entire fee for representing you. Some lawyers may not take your case
unless you agree to pay their fee - win or lose - or add to the
court-awarded amount if they think it's too low.
Reporting FCBA violations: The Federal
Trade Commission (FTC) enforces the FCBA for most creditors except
|The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop
and avoid them. To file a complaint, or to get free information on
any of 150 consumer topics, call toll-free, 1-877-FTC-HELP
(1-877-382-4357), or use the online complaint form. The FTC enters
Internet, telemarketing, identity theft and other fraud-related
complaints into Consumer Sentinel, a secure, online database
available to hundreds of civil and criminal law enforcement agencies
U.S. and abroad.