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The Fair Credit Billing Act (FCBA) is a United States federal law enacted in 1974 as an amendment to the Truth in Lending Act (codified at 15 U.S.C. § 1601 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.
The following are examples of billing errors under the FCBA:
The FCBA allows consumers to dispute billing errors by sending a written notice of the dispute to the creditor. To trigger duties under the Act, a person must send a written dispute via mail to the "billing inquiries" address on their credit card statement, not the address for sending payments. This dispute must be received by the creditor within sixty days of the statement date on the account statement that first contained the billing error. Notice given by telephone is not sufficient to trigger the protections of the FCBA; a consumer can only protect their rights under the Act by sending a written notice, or online if the creditor indicates to consumers that it will accept notices electronically. Banks may accept disputes by phone while warning their customers that phone complaints do not preserve the customer's rights under the Act. This often leads to a chargeback to the vendor.
After receiving notice of a dispute, the credit issuer must acknowledge the dispute within thirty days, 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.
In addition to creating a mechanism for dealing with billing errors, the FCBA contains additional regulations, including the following:
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 the lesser of $500,000 or 1 per centum of the net worth of the creditor.
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