Protect Yourself From Credit Card Billing Errors
By Robert D. Gifford
Fall 2007
It has been a long week and you drag yourself home from work looking forward to a relaxing weekend. As Murphy’s Law would have it, your mailbox is filled with bills and junk mail.
As you sort through the bills, you find that your credit card statement is filled with charges you know nothing about. Among these common errors are multiple charges for the same transaction and for merchandise that was returned to the seller and should have been credited. You call the credit card company but it is “after hours” and no one is available at the customer service number.
Don’t let it ruin your weekend. The Fair Credit Billing Act is a federal law designed to protect consumers from being billed for charges they do not owe. It helps you correct billing errors such as incorrect amounts, goods or services you did not receive or accept, and the failure to show credits for returns of merchandise to your credit account.
This law applies only to "open end" credit accounts, which normally includes credit cards and revolving charge accounts such as charge card or department store accounts. It does not apply to installment contracts, credit that is repaid on a fixed schedule, or installment contracts, often encountered when purchasing a vehicle, appliance, furniture or personal loan. It also does not apply to any dispute concerning the quality of purchased goods or services.
The Fair Credit Billing Act also places a $50 cap on your personal liability for any unauthorized charges on an account. If your credit card or account number is stolen and purchases are charged to your account, for example, you are not responsible for more than $50 of the cost of these unauthorized purchases.
If you find errors on your credit card bill, your first step should include sending written notification of the problem to your creditor. This notice should include your name, address, account number and a brief description of the billing error. It is also prudent to include all documentation that supports your claim. Remember to send this to the address provided for billing inquiries, which often differs from the address used for sending payments.
The creditor must receive the written notice of the dispute within 60 days after the error first appeared on your bill. It is also prudent to send your written notice by certified mail in the event that questions are raised about the timeliness of the request.
Once your request is received, the creditor is obligated to resolve the dispute within 90 days or two billing cycles, whichever occurs first. Payments for disputed amounts may be withheld only during the investigation period being conducted, and payments toward any undisputed amounts on the credit card statement still must be submitted.
If the creditor agrees that your bill contains an error, you should receive a written statement explaining the corrections made to your account, and any finance charges, late fees or other related charges arising from the error must be removed from the account.
If the credit card company insists that the bill is valid, you will receive a written statement containing the reason and amount due. The amount you owe will include the disputed amount and any finance charges that accrued since the dispute began.
Still not satisfied? If you still disagree with the creditor’s decision, the next step is to contact the creditor again in writing within 10 days to explain your refusal to pay the disputed amount. This action is significant because, although the credit card company may still attempt to collect the amount from you, it is not allowed to report you to a credit bureau as “delinquent” without also notating your position that you are not liable for the amount in dispute.
If you feel that the credit card company is refusing in bad faith to correct the error, you may want to file a complaint with the Federal Trade Commission (www.ftc.gov) and your state’s attorney general. You may also have a private cause of action, but consult with an attorney to discuss your specific situation.
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Maj. Robert D. Gifford is an Army Reserve Judge Advocate who serves as a professor of military law at the Judge Advocate General’s Learning Center and School in Charlottesville, VA. He is also an Assistant