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 and revolving charge accounts (ex. department store accounts).  It does not cover installment contracts - loans or extensions of credit that you repay on a fixed schedule (ex. cars loans, furniture and major appliance purchases).

What types of disputes are covered?

The FCBA settlement procedures apply only to disputes about "billing errors." For example:

  •  unauthorized charges

  •  charges for goods and services you didn't accept or weren't delivered as agreed

  •  math errors

  •  failure to post payments and other credits, such as returns

  •  failure to send bills to your current address

To take advantage of the law's protections, you must:

  •  write to the credit card company 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 credit card company 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 credit card company received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.  Click here for a Sample Credit Card Billing Dispute Letter.

The credit card company must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The credit card company 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 dispute?

You may withhold payment on the disputed amount during the investigation. You must pay any part of the bill not in question, including finance charges on the undisputed amount.

The credit card company 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 credit card company may report you as delinquent while your bill is in dispute. However, the credit card company may report that you are challenging your bill.

What if the bill is incorrect?

If your bill contains an error, the credit card company must explain to you - in writing - the corrections that will be made to your account. In addition to crediting your account, the credit card company must remove all late fees or other charges related to the error.  If the credit card company 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 money.

What if the bill is correct?

If the credit card company'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 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 credit card company, but you must act within 10 days after receiving the explanation. The credit card company may begin collection procedures.

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 card, you can take the same legal actions against the credit card company 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 for more than $50 in your home state or within 100 miles of your current billing address and you must make a good faith effort to resolve the dispute with the seller first.

 If you are experiencing a problem with your credit card company, please contact our office.