Unfair Credit Billing Practices

Although technology continues to improve, companies undoubtedly continue to make billing errors. The Fair Credit Billing Act (FCBA), which applies to consumers’ use of open-ended accounts (i.e., credit cards), and the Electronic Fund Transfer Act (EFTA) establish procedures for consumers to dispute mistakes found on credit billing and transfer account statements. Under these laws, consumers may dispute math errors, unauthorized purchases, unapplied payments, etc.

The FCBA also requires companies that offer “open end” credit to:

• Present you with a written notice, which describes your right to dispute billing errors when you open the account;
• Provide a statement for each billing period in which you owe more than one dollar;
• Send your bill at least 21 days before a payment is due;
• Credit all payments to your account on the date they are received (unless no extra charges would result from a delay); and
• Promptly credit or refund overpayments and other amounts owed to your account.

Rebekah L. Bailey

Consumer Law Attorney
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The FCBA also provides certain safeguards relating to disputed charges and billing errors. If you dispute a charge in writing within 60 days after receiving a bill, the creditor must investigate the dispute and may not threaten your credit rating or report your account as delinquent while the charge is in dispute (the creditor may report, however, that you are challenging your bill). Upon receiving a dispute letter, the creditor then has 30 days to acknowledge the error and make any necessary account adjustments or to explain in writing why the bill was correct.