The Federal Credit Billing Act (FCBA) lays out what a creditor must do when there is a dispute over a credit card bill. The FCBA also lays out the rights a consumer has when there is a credit card billing error. Some examples of the several errors covered by the Act include:

  • Failure of the creditor to send bills to your current address
  • Demands for explanation of certain charges or written proof of purchase
  • Unauthorized charges
  • Math errors

The FCBA is not automatic. In order for the consumer to take advantage of Act’s protections, the consumer must write the creditor at the address for billing inquiries within 60 days of receiving the first bill containing the error. The consumer must describe the billing error to the creditor so that the creditor will be informed of the situation and has a fair chance to resolve the dispute.

What Rights Do Consumers Have after Informing the Creditor of the Billing Error?

While the bill is in dispute, the creditor:

  • May withhold payment on the disputed part of the bill. However, they may only withhold the disputed part. Additionally, the disputed amount may be applied against the credit limit.
  • May not have their credit rating threatened or be reported as delinquent during the dispute.
  • Cannot be denied credit in the future based on challenging a credit card bill in good faith in the past.

What Happens after an Investigation into the Billing Error?

If There Is an Error: If the creditor finds that the there was a billing error, the creditor must explain to the consumer in writing what the error was and what corrections are being made. The creditor must also remove all charges related to the error.

If There Is Not an Error: If the creditor finds there was no billing error, the consumer must be informed in writing of how much is owed and why. If the consumer disagrees, they have 10 days to write the creditor. The creditor may report the consumer as delinquent, but has to noted that the consumer is refuting the charges and must tell the consumer who the reports are being sent to.

What Should I Do If My Creditor Does Not Comply with FCBA Procedures?

If your creditor does not follow the FCBA Procedures after you have informed them of a billing error, you may be able to take them to civil court. You may be entitled to damages, plus twice the amount of any finance charge, as long as that charge is between $100 and $1,000. You should consult a financial attorney to determine what action you should take to enforce your rights under the FCBA as a consumer.