Anyone attempting to establish credit should be aware of the Fair Credit Billing Act (FCBA), which works to safeguard common consumers from dishonest or illegal billing activities. Understanding the fundamentals of the act will help you better grasp your rights when it comes to submitting complaints or dealing with other billing-related difficulties.
Fair Credit Billing Act knowledge
The FCBA was created in 1974, but it remains relevant today and provides consumers with the same level of protection as it did back then.
The FCBA created stringent rules that creditors must adhere to when handling payments and disagreements. These laws aid in safeguarding customers from dubious business activities. This includes being subjected to credit damage or being kept hostage while a billing issue is being handled.
Two of the key safeguards provided by the FCBA are the prompt response of creditors to any complaints you make and the delay in payment of the disputed amount while an inquiry is ongoing.
Investigating Your Rights
The FCBA safeguards a consumer’s rights to contest a charge, defer paying the disputed amount while an inquiry is conducted, and get a refund for an overcharge — all without affecting their credit.
Objecting to Billing Mistakes
While the FCBA protects those who challenge billing errors, in order to be protected while doing so, you must abide by the FCBA’s guidelines. The following billing mistakes may be contested:
- unlawful charges
- Doubling of fees
- Charges stated with the wrong amount
- Charges posted with the wrong date
- Other blunders in math
You must send a letter describing the error and disputing the charge to the creditor’s billing address, along with your name, address, account number, and other necessary information. Include copies of any supporting documentation you have that demonstrates the validity of the dispute and supports your position to make the procedure as seamless as feasible. This may, for instance, include a statement, receipt, or invoice that lists a different sum than what your credit indicates.
It is crucial to periodically review your billing bills for any problems since the letter must be sent to your creditor within 60 days of receiving the billing statement that contains the error.
The creditor has 30 days from the time they receive the disagreement to confirm receipt unless they resolve the matter earlier. After receiving your letter, the disagreement must be entirely addressed within two billing cycles.
You are not required to pay for the disputed transaction while the dispute is ongoing. All other purchases are still your responsibility, and you are still obligated to pay for them. Your credit cannot be harmed by the creditor either during or after the dispute. They could record that you filed the dispute on your credit report, but this won’t have an impact on your credit score.
You may also contest the investigation’s findings if you get the findings but still believe the decision was unjust. When you receive the findings, you have ten days to contest them. You may even state that you won’t pay the disputed amount until the issue is satisfactorily handled.
Though they must also state that you are actively contesting the payment, bear in mind that the creditor might start classifying your payment as late and seeking to collect the amount owing at this time.
Even if the bill is accurate and the error is on your end, any creditor who does not adhere to the FCBA’s deadlines will be unable to collect the disputed amount.
Withholding Payments Due To Conflicts With Merchants
If you have a dispute with a merchant about products or services you paid for with a credit card, the FCBA can help. The issue isn’t a billing mistake; rather, it’s a real issue with the products or services you’ve bought with a credit card. The FCBA gives you the right to pursue the same legal action in these situations against the merchant or card issuer.
The only purchases that are covered by this insurance are those that cost more than $50, are made within 100 miles of your current billing address, and are made in your home state. Prior to taking legal action against your card issuer, you must have made an effort to work out a solution with the business.
Other Safeguards
The FCBA provides consumers with additional safeguards against deceptive business practices. For instance, you are permitted to ask for a refund if you overspend on an account. However, even if you don’t ask for a refund, the creditor is still required to credit your account with the extra money.
Additionally, creditors are required to quickly publish payments they receive to your account. This helps shield you from paying excessive interest or fees on sums before payments are processed.
Last Thoughts
Although the Fair Credit Billing Act provides several consumer safeguards, it is crucial to comprehend how it operates and when it does not. To maintain your legal protection under the act while contesting any transactions, you must adhere to the rules and procedures established by the FCBA.
Furthermore, as the FCBA has not been updated since the advent of the internet, you must still physically send in your grievances to be properly protected. To ensure the creditor receives the dispute, you might want to think about sending it by certified mail.
The Fair Credit Billing Act safeguards customers who need to challenge charges made on their credit or a credit card, without fear of retaliation from financial institutions, when used appropriately.