In 1974, The Fair Credit Billing Act was set in motion with the intent to protect consumers from errors made on credit card billing statements. Credit card holders have the right to dispute charges – and withhold payment for said charge – without experiencing a hit to their credit should the error be found to be inaccurate. As part of the Truth in Lending Act, cardholders are protected from liability from fraudulent charges if their information was stolen or otherwise used as part of a breach of the credit card company or by an individual thief. Here’s what you need to know about the Fair Credit Billing Act and your rights under the law.
Disputing Inaccurate Charges
The most significant aspect of the Fair Credit Billing Act gives consumers the power to dispute inaccurate charges or other billing errors found in a credit card statement. Card holders have 60 days from the date the bill in question was mailed or received to dispute an incorrect charge, and the information must be submitted to the credit card company in writing. Although calling to discuss billing mistakes may seem like the easier option, the law only protects erroneous charges when the complaint is made via mail. The letter indicating the error should include the following information:
- Your name
- Your account number
- Dollar amount of the dispute
- Date of the dispute
- Detailed reason as to why the charge is incorrect
Include any documentation that pertains to the error to prove your case, and make sure to send the complaint certified so you can track when it is received by the credit card company.
Creditor Investigations
Once the credit card company has received your complaint about an incorrect charge, it has 30 days to acknowledge that it has received notice. That does not mean the issue will be resolved or deemed accurate in a single month, however. Credit card companies have up to two complete billing cycles to resolve the issue and notify you of its decision in writing. If you believe the final decision is still inaccurate, you do have the right to challenge the credit card company within 10 days of receiving its explanation. The card issuer is then required to add a note to your credit report that explains the charge is still being disputed, which will help should the item end up in the hands of a debt collection agency.
Withholding Payment
As you go through the dispute process, you have the right under the Fair Credit Billing Act to withhold payment for the amount in question. If you opt to act on that provision of the law, your credit card company is not allowed to report the amount late on your credit report for as long as it remains unresolved. However, you are still required to make payments due on other outstanding charges to remain in good standing with the credit card company. The provision to withhold payment extends to purchases made on your credit card for which you are dissatisfied. You must first contact the merchant, however, so that they can work with you to find a solution before you withhold payment with your credit card company. Also, only purchases that are over $50 and bought in your home state are protected under this specific provision. Whether it is a disputed charge or a faulty purchase, be sure to maintain records of correspondence and any additional information that may help prove your case.
In Summary
The Fair Credit Billing Act works to the benefit of consumers disputing fraudulent or incorrect credit card charges, or those who are unhappy with a purchase made with the card. To take advantage of the protections available under the Act, it is necessary for consumers to understand what responsibilities they have in providing details of the dispute and the time-frame in which the dispute must be made.
