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USCF Sections

Consumer Rights When Disputing Credit Card Charges.

Article By : Patrick Mansfield | U.S. Consumer Finance
Credit Card Charge Dispute

Keeping a watchful eye on your credit cards can make a world of difference for your credit score. When there are inaccuracies because you weren’t credited with a return by a company or were charged twice by another, it can be frustrating to fix. Knowledge of the Fair Credit Billing Act (FCBA) and a little patience can reduce the stress of correcting your credit card account and save you money.

FCBA Settlement Procedure:

The procedures set forth in the FCBA only apply to billing errors such as:
  •  Unauthorized charges
  • Incorrect date or amount charged
  • Math errors
  •  Failure to credit payments or returns
  • Charges for goods or services not received
  •  Failure to send bills to current address

While there is a certain amount of responsibility on the part of the cardholder, there are standards that must be followed by the credit card company to ensure the information they are reporting is accurate and complete.

What can I do?

If you notice discrepancies on your credit card bill, you must write to the company at the address designated for “billing inquiries,” which is different than the address where payments are received. To avoid delays, include your name, address, account number, what the billing error is, and copies of sales receipts or other documents that support your argument. We have a sample letter for your use.

Your letter should reach the creditor no later than sixty days after the first statement with the billing error. Sending the letter via certified mail, return receipt requested provides you with a proof of receipt for your records. The creditor has thirty days from receipt of your letter to acknowledge your complaint in writing. They then have two billing cycles but not more than ninety days to resolve the dispute.

What can’t they do?

Once you file a formal credit card dispute, the creditor may not:
  • Attempt to collect the debt disputed
  • Initiate legal action based on the debt
  • Close or restrict your account
  • Threaten negative reporting to your credit rating
  • Discriminate against you for further credit
Creditors who fail to follow the FCBA Settlement Procedure precisely are precluded from collecting the amount in dispute. For instance, if they do not acknowledge your complaint within the thirty-day deadline or fails to resolve the credit card dispute within the two-billing-cycles/ninety-day deadline, they cannot collect the funds and cannot make a negative report to the credit reporting agencies relating to the disputed debt.

What can they do?

Once a dispute is submitted, the creditor will investigate the matter. During the investigation, the amount will remain on your credit card and will be applied against your limit. The creditor must provide a written explanation of the investigation results. If it is determined that you do not owe the debt, the creditor must explain what corrections will be made to your credit cards and an approximate date of when those corrections will be made. If it is determined that you owe the debt or a portion of the debt, you must be told why they feel you owe the money, and they can then apply any finance charges that accumulated. You may request any documents they used to make their decision.

If you disagree with the investigation results, you must send a letter stating so and why to the creditor within ten days of receiving the explanation. If you refuse to pay the amount after their determination, the creditor can start collection procedures and follow any other company policy as it relates to providing you credit. If a further investigation and updated solution are attained, the creditor must report the new results to any credit agency and everyone who received a report.
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