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The Fair Credit Billing Act (FCBA) is a United States federal law enacted as an amendment to the Truth in Lending Act (codified at et seq.). Its purpose is to protect consumers from unfair billing practices and to provide a mechanism for addressing billing errors in "open end" credit accounts, such as credit card or charge card accounts.*
Examples of billing errors The following are examples of billing errors under the FCBA: Correction of billing errors The FCBA allows consumers to dispute billing errors by sending a written notice of the dispute to the creditor. However, to trigger duties under the Act, the written dispute must be received by the creditor within sixty days of the account statement that first contained the billing error. After receiving notice of a dispute, the credit issuer must acknowledge the dispute, investigate the claim and, within ninety days, either make appropriate corrections to the account or send a letter to the consumer explaining why the creditor believes there was no error. If the creditor responds that they believe there was no error, the consumer can request copies of documentation supporting the validity of the disputed items. Other regulations of the FCBA In addition to creating a mechanism for dealing with billing errors, the FCBA contains additional regulations, including the following: (The dollar amount of the charge must exceed $50, and the purchase must have been made in the consumer's home state or within 100 miles of their address (unless the creditor is affiliated with the merchant, in which case these restrictions do not apply). The consumer must also make a good faith attempt to resolve the dispute prior to invoking this right.) Enforcement of the FCBA The Federal Trade Commission is the "overall enforcing agency" for purposes of administrative enforcement, though compliance by banks is enforced under section 8 of the Federal Deposit Insurance Act.* A consumer may also file a private lawsuit in any state or federal court with jurisdiction over the parties to recover actual damages, statutory damages of double the erroneous finance charge(s), and his or her costs and attorney fees (if the claim is successful). If the alleged unlawful conduct is widespread, the consumer can also seek to file a class action suit and seek damages up to $500,000 or 1 per centum of the net worth of the creditor.* | ||||||||
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