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Timing is Key under the Fair Credit Billing Act

You've probably heard of someone disputing a charge on their credit card.  But do you know why the law lets you do that?  The Fair Credit Billing Act provides consumers an opportunity to contest billing errors, including unauthorized charges, that appear on their credit card statements.  The FCBA is part of the Truth in Lending Act, but to take advantage of it, you have to act quickly.

Why is timing important?

The FCBA permits you to dispute a billing error on your credit card statement within 60 days of the creditor sending you the statement.  This is key: it's not within 60 days of you receiving the statement.  It's within 60 days of the creditor transmitting the statement to you.  If you wait too long, you may not be able to pursue your remedies under the FCBA.

But, what constitutes a billing error?

  • An item on a statement showing the creditor provided credit to the consumer when no such credit was provided or, if provided, reflected the wrong amount;
  • An item on a statement for which the consumer requests additional clarification including documentary evidence;
  • An item on a statement for goods or services the obligor did not accept or that were never delivered to the consumer in accordance with the agreement made when ordering the goods or services;
  • A statement that does not show a payment made by the consumer or a credit issued to the consumer;
  • A statement that contains a mathematical or accounting error;
  • The creditor's failure to send a statement to the consumer's last known address, unless the consumer provided a new less than 20 days before the end of the billing cycle; and
  • Any other error designated by the Consumer Financial Protection Bureau.

What should you do when you discover an error on your statement?

Look at your statement for an address creditor designates for billing inquiries (also may be listed as an address for billing errors or billing disputes).  15 U.S.C. 1637(b)(10).  Send a letter to that address that provides:

  • Your name;
  • The account number;
  • The date of the billing statement, or period it covers;
  • The fact that you believe there is a billing error;
  • The amount of the billing error; and
  • The reason you believe there is a billing error.  15 U.S.C. 1666(a).

Pay to track everything you mail, and request a signature at delivery.  Sending a letter via certified mail, return receipt requested (the green card), is currently $6.57.  Don’t skip this step.  Copy the letter you’re mailing.  Copy the envelope.  Copy the green card with the tracking number.  Copy your receipt.  Put all of the copies in a binder, or a folder, or an envelope, and save them.  The old saying is, “if it’s not in writing, it didn’t happen.”

Do not email the creditor.  Do not fill out a form on the creditor's website.  Do not call the phone number listed for billing.  Mail the letter.  These other methods are easier, but you may not be protected under the FCBA if you use them.

What will my card issuer do?

Your card issuer will first send you a letter acknowledging it received your dispute letter.  It will then have to investigate your dispute and determine whether there was actually a billing error.  If it finds there was an error, it must to correct it.  If it believes the statement was correct and there was no error, it needs to explain why.  You can request the documents it used to determine there was no error.  In the case where you notify the creditor the goods you ordered were not delivered as initially agreed, the creditor must determine the goods were actually delivered, mailed, or otherwise sent to you and explicitly state that in its response.

What if the creditor doesn't follow these steps?

Hire an attorney.  If the creditor determines you owe the money, it will expect you to pay.  And you should probably continue to pay until the matter is resolved.  Why?  Because if you don't, the creditor may close your account (turn off the tap) while it tries to collect the money it believes you owe.  This can affect your credit and lead to a whole host of other problems.

You have rights – use them!  If you have an issue with a credit card statement, contact us to see if we can help.

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