Like death and taxes, credit card disputes are inevitable. The good news is, whenever there is a credit card dispute that results from a billing error, the credit card company often takes the side of the cardholder until getting a counter argument from the merchant.
The better news is that all this is laid out in the Fair Credit Billing Act that went into effect in 1975. The law applies to “open end” credit accounts, like credit cards, and revolving charge accounts, like department store accounts.
The FCBA settlement procedures apply only to disputes about “billing errors.” For example:
- Unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50;
- charges that list the wrong date or amount;
- charges for goods and services you didn’t accept or that weren’t delivered as agreed;
- math errors;
- failure to post payments and other credits, like returns;
- failure to send bills to your current address—assuming the creditor has your change of address, in writing, at least 20 days before the billing period ends; and
- charges for which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification.
Nine out of 10 times, you should be able to pick up the phone or send an email to resolve any of the billing errors above and get everything squared away. However, some merchants recognize that the longer they dodge you and the more they avoid you, the more likely you are to give up. But hey, that’s your money! To take advantage of the law’s consumer protections, you must:
- Write to the creditor at the address given for “billing inquiries,” not the address for sending your payments, and include your name, address, account number and a description of the billing error.
- Send your letter so that it reaches the creditor within 60 days after the first bill with the error was mailed to you. It’s a good idea to send your letter by certified mail; ask for a return receipt so you have proof of what the creditor received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter until you are satisfied with the resolution.
The creditor must acknowledge your complaint, in writing, within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after getting your letter. Now, if things don’t work out the way you planned, there are lots more option to consider here. But if things begin to become very difficult, BillGuard can help you manage your dispute – for free!
The Federal Trade Commission (FTC) enforces the FCBA for most creditors except banks. If you think a creditor has violated the FCBA, file a complaint with the FTC.
Reduce billing error disputes:
- Always reconcile your bills diligently and on a timely basis.
- Refute billing errors immediately—within one to two billing cycles.
- Use a credit card instead of a debit card, as credit cards offer more consumer protection.
- Be patient. And be nice when talking to customer support.
- Use BillGuard to watch your back and help you resolve billing errors and unwanted charges.
Robert Siciliano is a personal security expert & advisor to BillGuard and is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen. See him knock’em dead in this identity theft prevention video. Disclosures.