Credit Card Disputes

The Fair Credit Billing Act, 15 U.S.C. § 1666, provides consumers with a procedure to correct billing errors on their credit card accounts and protects consumers’ credit ratings while they are disputing items on their account.


Under the Fair Credit Billing Act, a “billing error” is defined as:

→a computation error or similar error of an accounting nature of the creditor on a statement.

→ Failure to transmit the statement required under section 1637(b) of the Act to the last address of the obligor which has been disclosed to the creditor, unless that address was furnished less than twenty days before the end of the billing cycle for which the statement is required.

→ Any other error described in the the regulations.

 

→ A reflection on a statement of an extension of credit which was not made to the obligor or, if made, was not in the amount reflected on such statement.

→ A reflection on a statement of an extension of credit for which the obligor requests additional clarification including documentary evidence thereof.

→ A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of the transaction.

→ The creditor’s failure to reflect properly on a statement a payment made by the obligor or a credit issued to the obligor.

If you see a billing error on your account, you must dispute the error IN WRITING within 60 days of the date of the credit card statement in which the disputed amount first appears.

To dispute the bill, you must send the creditor a written notification that:

→ Sets out details of your name and account, and date of statement being disputed.

→ Indicate your belief that the statement contains a billing error and the amount of the alleged billing error.

→ States your reasons for believing that there has been a billing error

Once it receives your dispute, the law requires the creditor to:

→ Within 30 days, send you a written acknowledgement that it has received the notice;

→ Within 90 days or two complete billing cycles, whichever is shorter, the creditor must investigate the matter and either:

1. Make appropriate corrections to your account, or

2. Send you a written explanation of its belief that there was no error in the credit card statement being disputed.

While your credit card dispute is pending, the creditor MUST notify you that you need not pay the amount in dispute until the matter is resolved.

While the dispute is pending, the creditor CANNOT:

→ Report, attempt to report, or threaten to report adversely on your credit prior to sending a written explanation for denying your dispute. However, if you continue to dispute the bill in a timely fashion, the creditor may report the delinquency only if it also reports that it is in dispute, and the creditor tells you who it released that information to.

→ Attempt to collect the amount in dispute,

→ Restrict or close your account due to the failure to pay the disputed amount until the creditor sends a written explanation for denying your dispute, and