Fair Credit Billing Act and Credit Dispute Lawyer

A man sitting at a desk holding a credit card.

An August 2021 study found that more than 1 billion credit cards were active in the United States. The report also revealed that 70% of Americans had at least one credit card while 14% held 10 or more cards. With so many credit card users, it’s not surprising that many cardholders encounter billing errors and unauthorized credit card transactions. If your credit card issuer won’t resolve a billing problem, you may need a credit dispute lawyer to help protect your rights. 

How Do Credit Billing Problems Happen? 

Every month when you receive your credit card statement you should review it carefully for unfamiliar charges and mistakes. Specifically, look for these credit billing problems: 

  • Charges you don’t recognize and did not authorize, 
  • Charges for a product or service you never ordered or received, 
  • Charges for items that were not delivered as promised or were damaged upon delivery, 
  • Incorrect transaction amounts or calculation errors, 
  • Past payments in the wrong amount or payments that were not properly credited on your behalf, and 
  • Charges for items that were significantly not as described by the seller. 

Some billing errors are caused by clerical errors or computer mistakes on the part of your credit card issuer. However, stolen credit cards and identity theft cases have risen dramatically in recent years and consumers are struggling to protect their accounts from clever thieves. 

What if Billing Errors are Not Corrected? 

If these problems are not resolved in your favor, you may face serious financial hardship. Your card issuer may assess interest and late fees for non-payment and the unauthorized charge could be placed with a debt collector.  

Also, the disputed debt may be reported to credit reporting agencies and placed in your credit report. If not corrected, unpaid debt in your credit report will reduce your credit score and could lead to further financial troubles. For instance, you might be denied a car loan or mortgage, your current interest rates can go up, or your application for a rental property or employment could be rejected. 

An experienced credit dispute lawyer can be a powerful ally when you are facing multiple problems involving multiple companies. 

The Fair Credit Billing Act Protects Consumers 

The Fair Credit Billing Act (FCBA) was enacted in 1974 to protect consumers facing unfair credit billing practices and address the problems caused by credit card theft and more recently identity theft. Among other provisions, the FCBA established a consumer’s right to dispute items in their billing statement and the procedures both consumers and creditors must follow. 

Which Accounts are Covered by the FCBA? 

Originally, the Truth in Lending Act (TILA) was created to protect consumers in a broad range of loan, credit, and personal financial situations. The Fair Credit Billing Act is an amendment to TILA and only covers open-ended loans and accounts.  

Examples of open-ended accounts include major credit cards like Visa and Mastercard, revolving credit such as Macy’s or Target department store cards, and home equity lines of credit. To fall under the FCBA, the account or loan cannot have uniform monthly payments and a final date for full payment like a mortgage. 

Consumer Rights Under the FCBA 

If you find a billing mistake on your credit card statement, you have the right to dispute that transaction with the card issuer and ask to have it removed. Your written dispute must be received by your card issuer within 60 days from the date of the statement that included the mistake.  

Along with your written dispute, you should include a copy of your statement with the disputed transaction circled or highlighted, and copies of any documents that support your claim that an error occurred. Send your dispute by certified mail and request a return receipt. Keep a copy of everything you send. The Federal Trade Commission created a form letter to help you file your dispute.  

When you dispute a charge, you do not have to pay the disputed amount and the card issuer cannot charge interest or late fees on that amount while your claim is under investigation. You must pay the undisputed balance as normal. 

Card Issuer Obligations Under the FCBA 

When the credit card company receives your written dispute, it must acknowledge it within 30 days. Then, the card issuer has two billing cycles (but not more than 90 days) to investigate your claim. During that time, the company cannot charge interest or late fees on the disputed amount, and it cannot report the debt as unpaid to the credit reporting agencies.  

If the company determines that the disputed amount was a mistake or an unauthorized transaction, it must correct your statement and remove the amount along with any related interest or charges. This is known as a chargeback. 

If the company decides the amount is not an error and was authorized by you, it must explain how it reached this conclusion. It must also provide any supporting documentation if requested.  

What if the Card Issuer Rejects Your Dispute? 

If you have filed a written dispute within 60 days of the statement date but the company claims there is no error, you have the right to challenge that decision within 10 days of receiving the decision. The credit card company must indicate on your account that you are disputing that transaction. 

However, the card issuer can still try to collect the amount, turn your account over to a collection agency, and report the unpaid amount to the credit reporting agencies. So, although your dispute is noted, you may still face financial problems. 

Let a Credit Dispute Lawyer Fight for You 

As you can see, a billing error or unauthorized transaction in your credit card statement can open a floodgate of financial problems. In addition to the Fair Credit Billing Act, your rights under the Truth in Lending Act and even the Fair Credit Reporting Act may be jeopardized.  

If you have discovered a problem in your billing statement and followed the procedure for disputing the transaction but the card company has rejected your dispute, you still have rights. The team at Schlanger Law Group has extensive experience resolving cases when card companies: 

  • Don’t acknowledge receiving consumer disputes, 
  • Fail to reasonably investigate consumer claims, 
  • Take too long to investigate a claim, 
  • Refuse to remove an unauthorized charge from a credit account, 
  • Illegally attempt to collect a disputed amount, 
  • Wrongly report a disputed amount to a credit reporting agency during its investigation, 
  • Unreasonably deny a claim when there is evidence to show error or fraud, and 
  • Act in other ways that violate the Fair Credit Billing Act or other consumer protection laws. 

When you schedule a free consultation with a credit dispute lawyer at Schlanger Law Group LLP we can explain the various laws that apply to your situation and your legal rights. We regularly challenge powerful companies that violate consumers’ rights. 

Remedies a Credit Dispute Lawyer May Recover Under the FCBA 

If your rights have been violated under the Fair Credit Billing Act, you are entitled to your actual damages, statutory damages up to $5,000, and possibly punitive damages if the creditor has a history of violating other consumers’ rights in the same way. Also, when a court finds that the creditor violated the FCBA, it must pay your attorney’s fees and costs.  

If other consumer protection laws are involved, you may have additional or different rights and remedies. You can find more information in this Consumer Protection Law Outline 

When You Need a Credit Dispute Lawyer You Can Trust… 

Large credit card companies and national creditors often don’t follow the laws that have been established to protect consumers. If you are facing a non-responsive creditor or a company that has unreasonably rejected your dispute, we may be able to help. 

When you schedule a free case consultation with a credit dispute lawyer at Schlanger Law Group, you can rest assured that you will receive professional and compassionate legal representation from a dedicated, experienced advocate.

Schlanger Law Group LLP serves clients in New Jersey, New York, and throughout the United States with consumer protection, class action, credit reporting, and identity theft issues.