Your monthly credit card statement just arrived in your e-mail inbox; you click on it and are shocked. You made a purchase last month for $100, but your bill shows a charge of $1,000! Before you have a heart attack, stop and take a deep breath; you are probably protected by the law, and your credit record and bank account should remain intact. However you should act fast. You must talk to the creditor; simply ignoring the bill won't fix the problem.
The Fair Credit Billing Act (FCBA) requires revolving (open-end) account creditors, such as credit card issuers, to correct billing errors promptly. A "billing error," of course, includes a charge on your credit account for something that you didn't buy. But it also includes a purchase made by someone not authorized to use your account, a purchase that is not properly identified on your monthly account statement, a purchase that is for an amount different from the actual purchase price, or for something that you refused to accept on delivery because it was unsatisfactory. Billing errors may also include errors in arithmetic, failure to reflect a payment that you made or other credit to your revolving account, or failure to mail an account billing statement to your correct address.
It is safer to send a letter, because sending a letter will trigger the protections of the Fair Credit Billing Act.
To protect your rights under the FCBA and to correct errors, always notify your creditor in writing of any potential billing error. Many creditors readily handle billing complaints over the phone, and you may think calling is a lot faster and easier than writing a letter. However, it is safer to send a letter, because sending a letter will trigger the protections of the Fair Credit Billing Act. Sample letters can be found on the Web site of the Federal Trade Commission (www.ftc.gov). Use the address provided for billing error inquiries - do not send your letter to the address for account payments.
Send your letter no later than sixty days after the bill was mailed to you. Complying with the sixty-day deadline is very important, as it will protect your rights under the FCBA. Your letter should contain your name, address, and account number. State that you believe your bill contains an error, describe the error and explain why you believe your bill is wrong, and include the date and the suspected amount of the error.
After the creditor receives your letter, it has to acknowledge it within thirty days. The creditor must then investigate and correct your account within two billing periods. Fixing the error should never take more than ninety days from the time the creditor receives written notice of your billing dispute. If the creditor does not correct the error, it must tell you in writing why it believes the bill is not wrong. If the creditor is able to show that the charge is correct, you must pay the bill and any incurred finance charges. If, however, you have brought a genuine error to the creditor's attention, it should refund you any payments you have already made and remove the error from your bill.
Of course, like many things in the financial world these days, changes are afoot in the credit card world. Last spring, Congress passed a credit card holders' "bill of rights." Although this specific law doesn't deal directly with billing errors, its passage, as well as similar efforts on the state level, indicates that smart credit users should keep close watch of their rights and responsibilities regarding their credit accounts. If you have any questions, don't hesitate to contact your creditor and find out its most up-to-date policies and procedures.