Consumer Protection Laws
The Fair Credit Billing Act (FCBA)
In 1975, the Fair Credit Billing Act was passed through Congress. The purpose of the legislation was to create guidelines for resolution of disputes that resulted from consumers disagreeing with information that was reflected on their credit card statement. On the reverse side of a credit card statement, an address is provided to which the consumer can write and dispute information on their statement that they feel is incorrect. The cardholder must submit a letter within 60 days of receiving the billing statement that they believe to be incorrect.
The following information must be included in the letter:
- The name of the cardholder.
- The cardholder’s address.
- The cardholder’s account number.
- A summary of the reason for the dispute with information specific to the date and the amount of the transaction being disputed.
The credit issuer has 30 days in which to acknowledge receipt of the dispute letter. The consumer does not have to pay the portion of the bill that is in dispute while it is being investigated. During the investigation, the credit issuer may not report derogatory information to credit agencies concerning information that is relative to the disputed item. After investigating the dispute, if the credit card issuer determines that the information, as originally reflected on the statement is correct, they must send a letter to the cardholder explaining that they found no error in the information as it was recorded on the statement. If requested by the cardholder, the creditor must provide copies of information that they used to support that the information as originally reported was correct. The credit issuer must advise the cardholder of the amount due on their account and the due date by which they need to remit payment. If the cardholder does not pay by the due date, information may be reported to the credit bureau. If the credit card issuer determines that information, as found on the original statement, was reported in error, they must correct the error by crediting the account. In addition, they must provide a letter that confirms their error and summarizes the corrections that will be made to repair it.