Facts

• The FCBA protects consumers from collections activity and negative credit rating impact while consumers request an explanation of charges or work to resolve a charge dispute with a merchant. The FCBA requires credit-card companies to act upon a dispute within 90 days, provided that the dispute meets certain criteria and the consumer follows specific requirements.
  
  

History

• When general-purpose credit cards debuted in the 1960s and '70s, they were ripe for fraud. Fraudsters frequently intercepted credit cards and made unauthorized charges. If the consumer withheld payment, the credit-card companies treated it as an ordinary failure to pay. To provide the consumer with recourse, the federal government passed the Fair Credit Billing Act in 1974, capping off the first wave of credit card consumer protection legislation that began with the Truth in Lending Act in 1968.
  
  

Function

• Consumers can use the FCBA to defend against credit card billing errors, such as charges for things they didn't buy or items they didn't receive or accept from a merchant, math mistakes, failure to credit a return and charges with incorrect dates. A consumer must mail a letter to the credit-card issuer describing the problem and including his name, address and account number. The FCBA requires the issuer to investigate the problem and correct it or explain why the bill is correct. In the meantime, the consumer has a reprieve from making payments on these charges or associated interest and fees.
  
  

Time Frame

• Consumers are required to dispute a credit card billing error within 60 days from the date the issuer mails the bill. The credit-card company must acknowledge the complaint in writing within 30 days of receiving it. The company must complete its required actions on the dispute within 90 days of its filing.
  
  

Warning

• Although consumers are protected from making payments on disputed charges and associated interest and fees, payments are required on remaining charges on the same or subsequent statements. If you file a dispute under the FCBA, be sure to make payments on any undisputed charges to protect your credit standing.