Fair Credit Billing Act

The Fair Credit Act Billing Act, amended the Truth in Lending Act, requires prompt written acknowledgment of consumer billing complaints and investigation of billing errors by creditors. The amendment prohibits creditors from taking actions that adversely affect the consumer’s credit standing until an investigation is completed and affords other protection during disputes. The amendment also requires that creditors promptly post payments to the consumer’s account, and either refund overpayments or credit them to the consumer’s account.

What does the Fair Credit Billing Act Cover?

How the Fair Credit Billing Act Works

What is a Billing Error?

The FCBA defines a billing error appearing on a credit card or other statement as any of the following:

  1. Fraudulent charge or other charge not made by the account holder.
  2. Incorrect amount for a charge or an incorrect amount for any other extension of credit.
  3. A charge for goods or services that were not accepted by the account holder or that were never delivered to the account holder.
  4. Creditor’s failure to properly credit a payment made by an account holder or to properly list a credit (i.e., refund) made to the account holder’s account.
  5. A computation or mathematical error made by the creditor; or
  6. A creditor’s failure to send a statement to the last address of the account holder that was disclosed to the creditor, unless the account holder disclosed the new address within 21 days of the statement being sent.

Disputing a Billing Error

In order to challenge a billing error on a credit card or other credit statement, a creditor must receive a written dispute letter–termed a “notice” in the FCBA–from a consumer challenging a billing error within 60 days of the creditor transmitting the first statement containing the billing error to the consumer. The written dispute letter must also be sent to a specific address designated by the creditor, which is normally located on your statement or can be found on the creditor’s website.

The written dispute letter must clearly state the following:

  1. The name of the account holder.
  2. The account numbers.
  3. State that the account holder believes that an error exists on his/her statement and the amount of any such error; and
  4. Provide an explanation of why the account holder believes that a billing error exists on his/her statement.

During the dispute investigation period, it’s all right for a customer to not pay any disputed amount or related charges. However, you should pay other undisputed charges due on the credit card.

The creditor must respond to you within 30 days of receiving the notice of dispute and explain how it plans to correct the issue. The law requires the creditor to resolve the dispute within the next two billing cycles. At the end of its investigation, the creditor must write to you and explain its findings. If you must pay the disputed charges, the creditor has to state how much you owe and why. If a customer does not bear responsibility for the disputed charges, the creditor has to detail what it will do to correct the error.

What Happens if the Creditor Does Not Comply with the FCBA

If the creditor fails to comply with the FCBA, denies your billing error challenge inappropriately, or denies your billing error challenge without conducting a reasonable investigation, you can file a lawsuit against the creditor to enforce your rights.

15 U.S.C. § 1640 provides that a creditor who violates the FCBA is liable to the consumer for the following:

  1. Any actual damages sustained as a result of the violation.
  2. Twice the amount of any finance charge associated with the billing error with a minimum of $500 and a maximum of $5,000 in statutory damages or a higher amount if an established pattern or practice of FCBA violations can be demonstrated.
  3. Costs; and
  4. Reasonable attorney’s fees incurred by the consumer.


If you feel your rights were violated call us now at 877-700-5790 or email us at help@consumerlawfirmcenter.com.