Credit Card Bill Disputes Act

by Bill on July 19, 2011

If you receive your statement from a credit provider that has incorrect charges or information you have the right to dispute the charges or information. The Fair Credit Billing Act, more commonly known as the Credit Card Bill Disputes Act, provides guidelines for someone to do just that.

The Fair Credit Billing Act is part of a group of legislation packaged as the Truth in Lending Act to promote fair credit and lending practices in the 1970s, and then updated in 1986.

The Fair Credit Billing Act covers customer disputes concerning perceived billing errors by credit companies. The act covers unauthorized charges, charges for goods or services not delivered, math errors, failure to post payments or credits, failure to send bills to the current address of the customer, or when the customer requests clarification or further information concerning a charge on his account.

You must notify the credit provider about the disputed charge within 60 days after receiving the statement with the initial error. The creditor then has within 30 days after receipt to acknowledge the complaint in writing. A settlement of the dispute must happen within two billing cycles or 90 days whichever is shorter.

Creditors in dispute cannot take legal action against the consumer during the dispute or because of the dispute. The action cannot affect your credit rating unless the judgment is in the creditor favor and you become delinquent because of the ruling.

The legislation states that when there is an error, your creditor must explain all corrections made to the account in writing to you. The account must also be credited to reflect the correction. Finance charges and fees related to the error are also removed. If the judgement finds you at fault, the creditor must inform you of this, as well as the amount owed.

Should the creditor fail to follow guidelines set in the FCBA (Fair Credit Billing Act), they cannot collect the disputed amount from you or any related finance charges up to $50. Failures include acknowledging your dispute after the deadline and taking too long to resolve the dispute according to the law.

While you are in dispute with the creditor, you are allowed to withhold the amount in dispute until the judgement is handed down. Be aware though that should judgement come down in the creditor’s favor, you may be paying the minimum payment and any finance charges accumulated while the claim was active. Any money owed that you are not disputing is still owed by the original due date.

Creditors cannot cancel or close your account while the account is in dispute or because of the dispute. They can deduct the disputed amount from your available credit line. Should the creditor threaten to report, or incorrectly report your failure to pay during the dispute, there are penalties against them for that as well.

Should you disagree with the judgement once it comes down, you have 10 days to file a written grievance. Be aware again that the creditor at this point can begin collections against the account since they have a judgement in their favor.

Reference

Federal Trade Commission : Statutes – Fair Credit Billing [http://www.ftc.gov/os/statutes/fcb/fcb.pdf]
Federal Trade Commission : Publications – Fair Credit Billing Act FAQ Page [http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre16.shtm]

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