Does your credit card bill contain a billing error? Did someone use your card fraudulently to rack up unauthorized charges? Have you tried and failed to resolve a credit card dispute with a vendor, such as a defective item that the vendor will not refund? These are situations where the Fair Credit Billing Act (FCBA) can offer you protection and a potential path to resolution.
The FCBA, enacted in 1974, allows you to dispute charges under the above circumstances and potentially withhold payment on a temporary basis without any harm to your credit score.
Under the FCBA, credit card issuers are obligated to investigate disputed charges and resolve them if they are incorrect. However, it's important to understand how the FCBA applies and to know the proper way to register your complaint.
Billing errors under the FCBA have a fairly broad definition. Examples include failure to post payments or returns, sending bills to the wrong address (assuming you did not move and fail to promptly give your forwarding address), charges that list the wrong amount, or math errors within your bill.
To dispute a billing error, you should put your complaint in writing to the card issuer. Make sure to send your dispute to the address for billing inquiries (which is not necessarily the address you use to send in your payments). Keep a copy of your letter. Send copies of any supporting information such as receipts along with your letter – do not send the originals.
If letters aren't your strong suit, don't worry. The Federal Trade Commission (FTC) offers a sample letter that you can use as a template.
You must act quickly. You have sixty days after the mailing date of an erroneous bill to dispute a charge and maintain your protections under FCBA. Creditors may decide to honor disputes beyond that point, but there are no legal guarantees.
The card issuer must respond to your dispute within thirty days to verify receipt of the complaint, and then must resolve the dispute within the next two billing cycles. Whether the result is for you or against you, the creditor must notify you of the result in writing. You can withhold payment on the disputed portion until the situation is resolved without any effect on your credit report – but you must still pay any undisputed charges on the bill within the normal billing cycle.
In the case of fraudulent use of your card, your responsibility is limited to $50, although credit card issuers may waive the $50 charge under the circumstances. Time is of the essence when thieves have your card information, so call the creditor to take immediate action — but follow up with a letter as you would with billing errors. Jot down notes to cover the content of your call as well. If you would like to monitor your credit to prevent identity theft and see your credit reports and scores, check out our credit monitoring service.
To resolve a credit-based dispute with vendors that pertains to the quality of goods and services, you must first make a good-faith effort to resolve the situation with the vendor. Unless there is a direct relationship between the card issuer and the seller, this protection is limited to purchases of $50 or more within your home state or within 100 miles of your billing address.
Be careful when withholding payment on Internet purchases. State law takes precedence in that case.
Of course, you can't dispute a credit card charge if you don't realize that the errors exist. We suggest taking the advice of Matt Schulz, Senior Industry Analyst at CreditCards.com: "It's about checking your credit card statement as often as possible...checking your credit report...all that stuff really matters." Be diligent in searching for errors, and let the FCBA help you be dogged in correcting them.
If you believe there is a mistake on your credit report, you can resolve it with a single click using our credit correction service.