Fair Credit Billing Act (FCBA)

What is the Fair Credit Billing Act?

The Fair Credit Billing Act of 1974 is a federal law intended to prevent unfair credit-billing practices. It frames rules that apply to the two lenders and consumers for taking care of disputes about errors on billing statements. These errors incorporate statements mailed to some unacceptable address, calculation errors, unauthorized endlessly charges posted for goods that consumers purchased however didn't receive.

Questioning a billing mistake

Under the Fair Credit Billing Act, creditors and borrowers have specific obligations during billing disputes. The law applies just to accounts associated with credit cards and revolving charge store cards. It doesn't make a difference to installment loans like those used to purchase furniture or vehicles.
The dispute interaction begins when a borrower notices a blunder on a billing statement. The borrower must tell the credit card company recorded as a hard copy in the span of 60 days after the creditor mailed the principal statement with the blunder. The notice (which ought to incorporate your name, address, account data, a summary of the disputed mistake, and sales receipts or different reports) ought to be shipped off the card issuer's address for "billing requests" and not the address to which you send your payments. You ought to send it by means of certified mail for proof of delivery. If not, your claim might not have legal standing.
During the dispute investigation period, it's OK for a customer to not pay any disputed amount or related charges. In any case, you ought to pay other undisputed charges due on the credit card.
The creditor must answer you in something like 30 days of getting the notice of dispute and make sense of how it plans to address the issue. The law requires the creditor to determine the dispute inside the next two billing cycles. Toward the finish of its investigation, the creditor must keep in touch with you and make sense of its discoveries. In the event that you must pay the disputed charges, the creditor needs to state the amount you owe and why. In the event that a customer doesn't bear responsibility for the disputed charges, the creditor needs to detail how it will address the mistake.

Other creditor obligations

The Fair Credit Billing Act records different obligations of the creditor, including when and where to send billing statements, when to credit payments, and how to handle a dispute. The creditor must:

• Give a billing statement to customers who owe or are owed more than $1.
• Send bills to the customer's current address no less than 20 days before the billing cycle closes.
• Give a written notice about the right to dispute errors to customers who open new accounts.
• Credit payments that very day received.
• Instantly refund overpayments.
• Drop accrued interest charged to accounts in the event that it concludes the customer isn't obligated for the disputed charges.
• Not take steps to hurt a customer's credit or close an account during a dispute.

Creditors that abuse the Fair Credit Billing Act procedures don't have the legal right to collect the disputed debt, and up to $50 in finance charges, even assuming the evidence obviously shows the customer is to blame. The customer likewise has the option to file a lawsuit against a creditor for disregarding the FCBA. In the event that you are fruitful, you would collect the disputed amount and up to two times the amount of the finance charge.

Fair Credit Billing Act model

One illustration of how the Fair Credit Billing Act functions happens when a customer finds that a credit card company didn't credit his account for a payment made during the billing cycle and charged him a penalty for the missing payment. As indicated by the law, the customer has the option to ask the credit card company to address the blunder and eliminate the penalty and accrued interest.

Features

• A few instances of billing errors covered by the law incorporate unauthorized charges, charges with an inaccurate date or amount, and calculation errors.
• The purpose of the Fair Credit Billing Act is to furnish consumers with protection from unfair billing practices, covering "open-end" credit accounts, for example, credit cards or charge accounts.
• Consumers have 60 days from the time they receive their credit card bill to dispute a charge with a card issuer.
• The FCBA safeguards consumers from unfair billing practices, while the FCRA shields consumers from unfair practices with respect to their personal data.
• A chargeback is the return of money to a customer following the effective dispute of a specific transaction.