Fair Credit Billing Act
Challenging a Charge on your Credit Card
As originally posted on the Massachusetts bankruptcy Blog, the process and procedures to dispute an inaccurate charge on a credit card is well documented and supported by Massachusetts & Federal Laws. Consumer laws have been protecting individuals from wrongful actions of creditors. There are certain steps an individual must take to take advantage of the law’s consumer protection: contacting the creditor, waiting for response, settling dispute.
The Fair Credit Billing Act was established to protect consumers from creditors. The settlement procedures apply to disputes of “billing error”. These may be unauthorized charges, charges with wrongful date or amount, charges for goods or services that were not accepted by you or never delivered, math errors, and failure to bill to current address. It is important to acknowledge the law applies to “open end” credit accounts. Credit accounts would include credit cards, revolving charge accounts or department store accounts.
An individual may find protection under the Fair Credit Billing Act against wrongful credit card fees. The individual must write to the creditor inquiring the information of the charges. The individuals name, address, account number and description of errors must be included in the letter. Additionally you must attach copies of documentation that supports your claim. The letter must be delivered within 30 days after the bill is recieved, containing the error. This is clearly stated in Section 166 of the FCBA. It is advantageous for you to send the letter by certified mail and return receipt request. This allows you to have proof the creditor received the letter within the time frame.
Within thirty day the creditor must acknowledge your complaint. The creditor must explain the error or inaccurate amount on bill through writing. If the creditor recognizes the mistakes the letter back will include a change to your bill. Also, the creditor must remove all finance charges, late fees or other charges obtained during or related to this issue. However, the creditor may pursue the balance of the disputed amount (Section 166(a).
If the creditor questions and pursues the disputed amount, it is necessary you keep the received letter from the creditor of the disputed amount. At this time the creditor will investigate the charges; information may be requested to prove the charges.
During the dispute, all other payments not in dispute must be paid. A legal or other action to collect the dispute amount is restricted during investigation. The closing of your account is also restricted to creditor. However, the disputed amount may be applied against your current credit card limit. The dispute must be resolved within ninety days or two billing cycles after receiving the letter.
Throughout the dispute process, under the Fair Credit Billing Act section 161(a), “a creditor or his agent may not directly or indirectly threaten to report to any person adversely on the obligor’s credit rating or credit standing because of the obligor’s failure to pay the amount indicated by the obligor”. This section protects an individual’s credit report allowing stability while the claims are in dispute.
It is important to realize the creditor’s investigation may result in the determination that the bill was correct. If this happens, the creditor must immediately send notification with a descriptive reasoning. The individual may request documentations proving the bill was correct. At this time, the individual will need to pay the owed amount and finance charges collected during disputation. There may be a minimum payment required because of the dispute (Fair Credit Billing)”.
If you disagree with the findings of the investigation, you can act within 10 days. The letter must state your refusal to pay the disputed amount because you do not feel you owe the funds. Collection procedures may begin at this time. What if the creditor fails to follow procedure? In the case the creditor does not follow procedure, the creditor will not be able to collect amount disputed or any related funds up to 50 dollars. The collector may not collect the funds if the investigation result is finding the billing was correct.
If a creditor has contacted a credit collections agency during the period of investigation, it is against the law. The creditor is breaking Section 166(a) of the FCBA and chapter 93 Section 49 regulation of trade. Under this section (d) the creditor communicates with alleged debtors through the use of forms or instruments that simulate the form and appearance of judicial process. This action would break the process and violate the judicial process. However, the letter of dispute must have been received by the creditor within 30 days of the incorrect bill. The creditor may pursue the individual for liable amounts if this was not fulfilled.
All in all, the procedures to dispute an incorrect fee are a timely mannered process. The federal and state laws established will help the individual fight the creditor. It is important to realize the creditor may result in correct billing. Also, it is important to remember the finance charges which can be established throughout the process that you will be liable if the creditor is correct.
