The Fair Credit Billing Act (continued)
What if the bill is correct?
If the creditor'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 also 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 creditor, but you must act within 10 days after receiving the explanation, and you may indicate that you refuse to pay the disputed amount. At this point, the creditor may begin collection procedures. However, if the creditor reports you to a credit bureau as delinquent, the report also must state that you don't think you owe the money. The creditor must tell you who gets these reports.
What if the creditor fails to follow the procedure?
Any creditor who fails to follow the settlement procedure may not collect the amount in dispute, or any related finance charges, up to $50, even if the bill turns out to be correct. For example, if a creditor acknowledges your complaint in 45 days - 15 days too late - or takes more than two billing cycles to resolve a dispute, the penalty applies. The penalty also applies if a creditor threatens to report - or improperly reports - your failure to pay to anyone during the dispute period.
Creditors, particularly credit card companies, have been known to ignore or deny billing disputes altogether. To protect yourself, notify them by certified mail of the dispute as quickly as possible. Do not simply telephone them. Follow-up with a second and third certified letter if they fail to respond to the first one.
Other billing rights
Businesses that offer "open end" credit also must: (1) give you a written notice when you open a new account - and at certain other times - that describes your right to dispute billing errors; (2) provide a statement for each billing period in which you owe - or they owe you - more than one dollar; (3) send your bill at least 14 days before the payment is due - if you have a period within which to pay the bill without incurring additional charges; (4) credit all payments to your account on the date they're received, unless no extra charges would result if they failed to do so. Creditors are permitted to set some reasonable rules for making payments, say setting a reasonable deadline for payment to be received to be credited on the same date; and (5) promptly credit or refund overpayments and other amounts owed to your account. This applies to instances where your account is owed more than one dollar. Your account must be credited promptly with the amount owed. If you prefer a refund, it must be sent within seven business days after the creditor receives your written request. The creditor must also make a good faith effort to refund a credit balance that has remained on your account for more than six months.
Suing the creditor
You can sue a creditor who violates the FCBA. If you win, you may be awarded damages, plus twice the amount of any finance charge - as long as it's between $100 and $1,000. The court also may order the creditor to pay your attorney's fees and costs. If possible, hire a lawyer who is willing to accept the amount awarded to you by the court as the entire fee for representing you. Some lawyers may not take your case unless you agree to pay their fee - win or lose - or add to the court-awarded amount if they think it's too low.
Reporting FCBA violations
The Federal Trade Commission (FTC) enforces the FCBA for most creditors except banks. You can file a complaint online at www.ftc.gov. You can also report the violation to your state attorney general's office and the attorney general's office in the state where the creditor is based. You will get better results complaining to your state AG office.
Note
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 or charge card, you can take the same legal actions against the card issuer as you can take under state law against the seller.
Credit Cards
The Fair Credit Billing Act (Summary)
