What is the Fair Credit Billing Act?

If you didn't buy it, why pay for it? Everyone knows mistakes happen, and people are only human after all. So when billing errors arise and charges show up on your account for merchandise and services you neither purchased nor received, exercise your consumer rights and dispute those charges!

Whether you are charged twice for the same item you only purchased once or charged for an item you never even ordered, you as a consumer receive protection against erroneous charges in your billing statements. The Fair Credit Billing Act, FCBA, supplies consumer protection from many types of disputes, including fraudulent purchases, unauthorized charges, mathematic errors, multiple charges for the same item, charges showing an incorrect date or amount and costs of products or services that you neither ordered nor received.

Additional billing disputes may arise from a creditor's failure to credit a return or a payment and failure to send bills to your current address (provided you supplied them with your correct address if you've moved). If a situation occurs where you desire a thorough explanation of the charge or proof of purchase, you may also want to issue a dispute.

With consumers' best interests in mind, the Fair Credit Billing Act provides that credit card companies must examine and rectify any mistakes within a consumer's bill, or provide an explanation of the accuracy of the bill. In order for a consumer to take advantage of the Fair Credit Billing Act if a situation should arise, he or she should complete the following steps:

Tips for best handling a credit dispute:

Tip 1: Immediately upon noticing a billing error, compose a letter to politely dispute the charges while including your name and mailing address, account number and a detailed report of the inaccuracy. Be sure to drop the letter in the mail so that it reaches the creditor within 60 days of your initial receipt of the erroneous bill. Remember, in most situations that involve legality or any type of dispute, it is always best to have everything in writing.

Tip 2: Address your letter to the "billing inquiries" department, not the normal address where you send your bills each month. Request a receipt and send your letter certified mail to confirm that your message reaches its destination.

Tip 3: Make copies of any receipts or invoices that support your case. Keep the originals for yourself and include copies with your letter. Keep a copy of your letter in your files.

Tip 4: Remember to pay the portion of your bill that is intact. Credit card agencies cannot impose a finance charge on the unpaid amount when a bill is under investigation for error; however, they may impose a charge on the portion of the bill that is not under investigation. Be sure to pay off the proper amount on time to prevent unnecessary charges. When a bill is under dispute, a consumer's credit remains free from negative impact provided all correct payments are submitted on time.

Active since 1974, the FCBA requires that creditors respond to a consumer's message and do whatever is necessary to resolve the situation before two billing cycles pass within a maximum of 90 days. Despite this guideline, credit card companies may not always be on the ball with their responses. Sometimes a little nudge can't hurt, so keep a phone number for the "billing inquiries" department handy!