Consumer Protection Laws on Credit Card Disputes

Federal laws protect consumers in credit card disputes.
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The federal government has consumer protection laws in place that limit consumer liability for credit card disputes. You have to do your part, though, to use the protections. This means paying close attention to your credit card statements every month so that you catch fraud and errors in your accounts quickly.

Fair Credit Billing Act

The purpose of the Fair Credit Billing Act is to protect consumers from unfair or inaccurate credit card billing. With this law in place, you can have confidence in using your credit cards or accounts because of the protections afforded to you. The FCBA, however, does not cover loans, installment contracts and debit cards.

Covered Disputes

The FCBA applies to disputes arising from billing errors. This would include unauthorized charges on your credit card and erroneous charges – or even charges with the wrong billing amount or date. The FCBA limits consumer responsibility for unauthorized charges to $50. Additional covered disputes include charges you receive for services or items that you didn’t accept or receive. If a creditor doesn’t post payments and credits from returns correctly, or doesn’t send your statement to your current address — after you submitted a change-of-address form correctly — these issues also fall under covered disputes.

Dispute Procedure

Write a letter to the creditor using the “billing inquiries” address. Include your full name, your billing address and your account number. Describe the billing error or dispute completely, including the amount of the erroneous charge and detailed reasons that explain why you claim the charge is wrong. Make an extra copy of the letter and keep it for your records. If you have receipts or paperwork that supports your position, make copies of these papers and enclose the copies with the letter. Send the letter by certified mail with a return receipt requested. Your letter has to arrive at the creditor within 60 days of the date that you received the first statement with the error. The creditor has to send you a letter that acknowledges receiving your dispute letter within 30 days of getting your letter unless the creditor just resolves the issue. If resolution takes longer, the creditor has two billing cycles to resolve the dispute.

Quality Disputes

Issues that arise from the quality of the services or goods you paid for don’t fall under the heading of “billing errors.” This means that the FCBA doesn’t cover these disputes. But, if you paid for something that fell short of your expectations, you still have recourse as long as your purchase meets certain criteria. The purchase has to be at least $50 and in your state of residence or within 100 miles of your billing address. You also have to make a serious effort to resolve the issue with the merchant. As long as you meet these criteria, use the same dispute procedure that you use for FCBA disputes.

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