Credit Card Billing Disputes

You’ve opened your credit card statement and found an unauthorized charge, or see that you’ve not received credit for merchandise you returned two weeks ago. Use the dispute settlement procedures of the federal Fair Credit Billing Act (FCBA) to help you correct these and other types of billing errors on your credit cards. Creditors have an incentive to follow these procedures because creditors that don’t follow them aren’t legally entitled to collect disputed amounts.

Understanding the Fair Credit Billing Act (FCBA) 

• The FCBA applies only to billing errors on “open-end” accounts, like credit cards and revolving charge accounts. It does not apply to debit card transactions or disputes involving installment contracts with a fixed schedule of payments, like those used to buy cars or furniture. 
• Common examples of billing errors include unauthorized charges, charges for goods and you didn’t accept (or weren’t delivered as agreed) and missing payments or other credits, like returns. 
  • You can also ask for a written explanation or proof of purchases. Remember that federal law limits your liability for unauthorized charges to $50.
• If you change your address notify your credit card company in advance. If the company receives your written notification of change of address at least 20 days before the billing period ends, then its failure to send a bill to your current address is considered a billing error.  
• The FCBA does not apply to complaints about the quality of the goods or services you received. First try to resolve the issue with the merchant. If it cannot be resolved, notify your credit card company in writing that you’re withholding payment until the matter’s resolved.   

Dispute a Billing Error

• Make it a practice to review your statements promptly. 
• Under the FCBA, you must notify your credit card company in writing of any billing error you see. 
  • Write a brief letter that includes your name, address, account number, date and amount of the error, and a brief description of the billing error. 
  • Include copies (not originals) of receipts or other documents if they support your claim.
  • Keep a copy of your letter for your records.
• Your letter must reach your creditor within 60 days of the date of your billing statement. The letter must be sent to the address given for “billing inquiries,” not the address for payments. For proof of delivery, send the letter by certified mail with return-receipt requested.
• Pay the undisputed portion of your bill by the due date. You can withhold payment of the disputed amount and related interest charges during the dispute investigation.

What Happens Next?

• The creditor must send you written acknowledgement of your dispute within 30 days, unless the problem’s been resolved. The creditor cannot take any legal action against you while your complaint is pending.
• The creditor must investigate and resolve your dispute within two billing cycles, but no more than 90 days.  The creditor may send a letter explaining that the mistake has been corrected and the disputed charge – including related interest and late fees, if any – has been removed. Alternatively, the creditor may send a letter explaining why the bill is correct, the amount you owe (including all related fees) and the due date.
• You must act promptly if you don’t agree with the creditor’s written notification that you owe the disputed amount. Under the FCBA, you must respond to the creditor within 10 days of receiving its notification. 
  • Be aware that at this point the credit card company may notify the credit reporting agencies that your account is delinquent; if so, make sure your credit report also states that the amount is in dispute. 
• Most credit cards are issued by national banks that are regulated by the Office of the Comptroller of the Currency (OCC).  If you have a complaint, contact the OCC’s Customer Assistance Group by calling toll-free 800-613-6743 or by sending an e-mail to customer.assistance@occ.treas.gov.