Descriptive Billing

What is Descriptive Billing

Descriptive Billing is a form of billing customers for credit card transactions that gives subtleties of each transaction. Commonly, a customer getting descriptive billing will receive information on the date of the transaction, merchant information, a description of the goods or services delivered and different subtleties.

BREAKING DOWN Descriptive Billing

Descriptive billing was developed to supplant country club billing during the 1970s, which had started to decline in notoriety both for consumers and credit card companies. Country club billing required the credit card company to send the actual credit card slips for every transaction to the customer, making the accounting system for reconciling statements more costly and work concentrated for all gatherings.

Of course, a few customers and supporters opposed the shift to descriptive billing, inclining toward the feeling that all is well with the world and point by point transaction information given by a paper trail, country club billing stayed generally secure just for face to face transactions. Credit transactions initiated via telephone or online, which have come to characterize many consumers' retail habits, evade any benefits of paper billing.

As descriptive billing turned into the standard for credit card billing, regulations started to be carried out and refined to oversee the manners in which cardholders would be charged. Specifically, Regulation Z, carried out in the Truth in Lending Act of 1968, requires that in the event that a credit card company does exclude transaction sneaks through their billing, as in country club billing, the creditor is required to supply the cardholder nitty gritty transaction information, including the date of the transaction, distinguishing information on the merchant which ran the transaction, and subtleties on the goods or services transacted.

Descriptive Billing and the Truth In Lending Act

The Truth In Lending Act (TILA) was passed into federal law by the U.S. Congress in 1968 and was enacted to safeguard consumers in their business with creditors and lenders. TILA was in this manner carried out by the Federal Reserve Board via a series of regulations.

Regulation Z presents rules against misdirecting practices by creditors and lenders, requiring all lending industry gatherings to reveal terms to their customers recorded as a hard copy and to give definite information on all transactions so customers are not deluded about critical billing subtleties, for example, interest rates, finance fees, and unauthorized charges. Rules for descriptive billing practices are explicitly tended to under Regulation Z.

While federal law administers the executions and understandings of TILA and its associated regulations, a few states and industries have carried out more grounded requirements and regulations in regards to information disclosure and transaction reporting, furnishing the two creditors and consumers with greater protections against wrong, unfair, or fraudulent practices.