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Acronym: FCBA
How the Fair Credit Billing Act Works for Consumers
There are several types of billing errors you may dispute as a consumer, according to the Fair Credit Billing Act. These can include:
Unauthorized charges: These are charges you never made. They may occur because someone stole your credit card. Under the FCBA, your total liability for unauthorized charges is limited to $50; however, many credit card issuers offer zero liability protection on all fraudulent charges, which means you’re not on the hook for any charges made by a thief, as long as you follow certain procedures. Inaccurate charges: Inaccurate charges may have the wrong dates or amounts. If you spent $10 at Starbucks but your statement says you charged $25, for example, your charge is inaccurate. Charges for products and services you didn’t receive: Let’s say you ordered a pair of boots from an online retailer. If you were charged but never received them, you have a dispute case. Questionable charges: If you notice a charge and believe it’s an error, you can ask for written proof that you’ve made it or an explanation as to what the charge is and why you received it.
You will know if you’ve received a billing error by reviewing your billing statements on a monthly basis. You can also monitor your credit by visiting a site like AnnualCreditReport.com. You’ll be able to pull free copies of your reports from Equifax, Experian, and TransUnion (the three major credit bureaus) to look for errors or inaccuracies.
How the Fair Credit Billing Act Works for Creditors
In addition to consumer protections, the Fair Credit Billing Act imposes certain requirements on creditors. When you open an account, they must provide you with a written notice. They must also send your bill at least 21 days before your payment is due and before the expiration of an applicable grace period, and at least 14 days before your minimum payment due date. If you have an overpayment, creditors need to credit it or give you a refund via cash, check, or money order. This holds true if your account has a negative balance for more than six months. In addition, creditors are required to apply a payment to your account the day on which it was received.
Fair Credit Billing Act Example
Imagine you were on a beach vacation with your family. You had a great time and return home to a credit card statement full of charges you made on your trip. One of the charges is $250 to a seafood restaurant you didn’t go to. The FCBA considers this a charge for something you didn’t receive. Therefore, you may write a letter to the creditor to dispute it. As long as you do this within 60 days, you may not be responsible for the $250 dinner you never actually received.
