The Fair Credit Billing Act (FCBA) is a

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

federal law Federal law is the body of law created by the federal government of a country. A federal government is formed when a group of political units, such as states or provinces join in a federation, delegating their individual sovereignty and many po ...

enacted in 1974 as an amendment to the

Truth in Lending Act The Truth in Lending Act (TILA) of 1968 is a United States federal law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing ...

(codified at et seq.). Its purpose is to protect consumers from unfair billing practices and to provide a mechanism for addressing billing errors in "open end" credit accounts, such as

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...

charge card A charge card is a type of credit card that enables the cardholder to make purchases which are paid for by the card issuer, to whom the cardholder becomes indebted. The cardholder is obligated to repay the debt to the card issuer in full by the ...

accounts.

Examples of billing errors

The following are examples of billing errors under the FCBA: * Charges not actually made by the

consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...

* Charges in the wrong amount. * Charges for goods or services not received by the consumer * Charges for goods not delivered as agreed * Charges for goods that were damaged on delivery * Failures to properly reflect payments or credits to an account * Calculation errors * Charges that the consumer wants clarified or requests proof of * Statements mailed to the wrong address * Significantly not as described product/goods

Correction of billing errors

The FCBA allows consumers to dispute billing errors by sending a written notice of the dispute to the creditor. To trigger duties under the Act, a person must send a written dispute via mail to the "billing inquiries" address on their credit card statement, not the address for sending payments. This dispute must be received by the creditor within sixty days of the statement date on the account statement that first contained the billing error. Notice given by telephone is not sufficient to trigger the protections of the FCBA; a consumer can only protect their rights under the Act by sending a written notice, or online if the creditor indicates to consumers that it will accept notices electronically. Banks may accept disputes by phone while warning their customers that phone complaints do not preserve the customer's rights under the Act. This often leads to a chargeback to the vendor. After receiving notice of a dispute, the credit issuer must acknowledge the dispute within thirty days, investigate the claim and, within ninety days, either make appropriate corrections to the account or send a letter to the consumer explaining why the creditor believes there was no error. If the creditor responds that they believe there was no error, the consumer can request copies of documentation supporting the validity of the disputed items.

Other regulations of the FCBA

In addition to creating a mechanism for dealing with billing errors, the FCBA contains additional regulations, including the following: * Billing statements must be sent at least fourteen days before the payment is due for open end credit accounts that have a grace period prior to adding finance charges. * If banks report payments as delinquent to credit bureaus they must also report a charge is disputed. * Credit card companies may not prohibit merchants from offering discounts to people who pay with cash or check. * Banks may generally not use money in checking or savings accounts to pay a delinquent credit account with the same bank. * The FCBA's § 170 gives a consumer the right to sue or assert defenses against the credit company (instead of the actual merchant) in a dispute about the quality of goods or services received, to the dollar extent of the amount of the charge(s) involved.''(The dollar amount of the charge must exceed $50, and the purchase must have been made in the consumer's home state or within 100 miles of their address (unless the creditor is affiliated with the merchant, in which case these restrictions do not apply). The consumer must also make a

good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...

attempt to resolve the dispute prior to invoking this right.)''

Enforcement of the FCBA

The

Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...

is the "overall enforcing agency" for purposes of administrative enforcement, though compliance by banks is enforced under section 8 of the

Federal Deposit Insurance Act The Federal Deposit Insurance Act of 1950, , is a statute that governs the Federal Deposit Insurance Corporation (FDIC). The FDIC was originally created by the Banking Act of 1933, which amended the Federal Reserve Act The Federal Reserve Act ...

. A consumer may also file a private lawsuit in any state or federal court with

jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. Jur ...

over the parties to recover actual damages,

statutory damages Statutory damages are a damage award in civil law, in which the amount awarded is stipulated within the statute rather than being calculated based on the degree of harm to the plaintiff. Lawmakers will provide for statutory damages for acts in wh ...

of double the erroneous finance charge(s), and his or her costs and attorney fees (if the claim is successful). If the alleged unlawful conduct is widespread, the consumer can also seek to file a

class action suit A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class action ...

and seek damages up to the lesser of $500,000 or 1 per centum of the net worth of the creditor.

References

Sources and external links

Full text of the FCBA in pdf format
- Federal Trade Commission {{Bank regulation in the United States United States federal banking legislation Credit Consumer protection law Consumer protection legislation