Many consumers are aware that they have the right to dispute a charge or an incorrect credit card bill, but few consumers take advantage of these rights or know how to do so. Often when a creditor files a lawsuit to collect on an unpaid credit card, they will use discovery requests to confirm whether the consumer ever made a dispute to any of the charges on the account. Creditors will often assert the absence of a dispute as proof of a consumer’s agreement with the charges. While that is not necessarily the correct legal standard, it does shed light on an underutilized, but important tool for consumers to use to preserve their rights, the Fair Credit Billing Act(FCBA).
It is important to know that credit card companies are required by the FCBA to investigate a properly made dispute and cannot hold you – the consumer – responsible for the charged amount in dispute, late charges or finance charges associated with it during their investigation.
The FCBA covers disputes arising from billing errors, some of which include: 1) unauthorized charges, 2) charges that list the wrong date or amount, 3) charges for goods or services you didn’t accept or weren’t delivered as agreed, 4) mathematical errors, 5) failure to post payments and credits, 6) failure to send bills to your current address (provided a change of address was provided in writing no less than 20 days before the end of the billing period), and 7) charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.
A dispute over the quality of a good or service is not a billing error, so the following procedure would not apply, however other legal rights may be more applicable.
In order to take advantage of this law, a phone call to a customer service representative, while helpful, is not enough, as it does not satisfy the statute. No verbal assurance by the creditor will require their compliance with the dispute procedures. In order to make a proper dispute under the statute your dispute must:
- Be in writing
- Include your name, address, account number and description of dispute
- Be addressed to the “billing disputes”, “billing errors”, or “billing inquiries” address for the creditor.
- Should be (but not required) by certified mail, return receipt requested. (for your records)
- Include copies (not originals) of documents that support your position.
Creditors may not threaten to report you as delinquent or report your account negatively based upon your withholding payment on the disputed charge. The creditor may report to the credit bureaus that your account is in dispute.
Importantly, a consumer’s exercise of its right to dispute a bill cannot be the basis of another potential lender’s denial of credit. To deny credit based on such a dispute may be a violation of the Equal Credit Opportunity Act.
Once a dispute is properly made, a creditor who fails to follow the statutory procedure may not collect the amount in dispute, or any related finance charges up to $50, even if the bill ends up being correct. The creditor must acknowledge your dispute in writing within 30 days of receipt, and it must resolve the dispute within two billing cycles (not more than 90 days after receipt of your letter).
If the bill is incorrect, then the creditor must explain to you in writing, the corrections that will be made and credit your account the charge in dispute and all related fees and finance charges. If the bill is correct you must be told promptly and in writing what is owed and why. It may be determined that you owe a portion of the amount in dispute and if so you must also be informed in writing.
You may attempt to dispute it further and request copies of all relevant documents, however this written dispute must be submitted with 10 days of your receipt of the results. If a bill is determined to be correct collection efforts by the creditor may commence.
The bottom line is that consumers should not remain silent in the face of a disputed bill. Don’t be afraid to stand up for your rights, and instead follow the procedures of the FCBA, and make the creditor do the same.
By Steven M. Canter, Wites Law Firm
This article is provided for informational purposes only and should not be construed as legal advice. If you need legal advice, contact a lawyer as soon as possible.