What is the Fair Credit Billing Act?
Understanding the Fair Credit Billing Act
If you wonder why it’s safer to make payments via credit card than it is to make payments via check, a lot of it has to do with the Fair Credit Billing Act. The Fair Credit Billing Act is an Act that applies to open-end credit accounts like your credit cards.
How It Protects You
The Fair Credit Billing Act protects you in a number of ways. First and foremost, it protects you from unauthorized charges to your credit card (leaving you with a responsibility of only $50 of any unauthorized charges). It also protects you from charges that list the wrong date or the wrong amount.
If you received goods or services that you didn’t accept or that weren’t delivered as you agreed, the Fair Credit Billing Act protects you from that as well. The Fair Credit Billing Act also protects you when there is a failure to post payments and/or other credits such as returns to your account and also protects you when your credit card company fails to send bills to your current address (as long as you have given them at least 20 days notice in writing of a change of that address).
How to Put It into Action
If you want to put the Fair Credit Billing Act to work for you, you’re going to need to send notice to your creditor in writing. Make sure you enclose any applicable copies of receipts or other paperwork with your letter. Generally, you want this written notice to go to the department and address that handles billing disputes. Make sure that you send the written request via certified mail so you will have proof that you sent the dispute to your credit card company.
The creditor will be required to notify you in writing within 30 days of having received the letter and must resolve the situation within 2 billing cycles.
Under the Fair Credit Billing Act, you do not have to pay the disputed charges while the charges are in dispute. However, if the charges turn out to be legitimate, you will have to pay those charges along with any interest.
The next time you have a billing dispute or there is a problem with a charge to your credit card, put the Fair Credit Billing Act to work for you and invoke your rights under the Act.