What is the Fair Credit Billing Act (FCBA)?
The Fair Credit Billing Act (FCBA) is a federal law (1974) that protects consumers from unfair billing practices on open‑end credit accounts. It gives cardholders a formal process to dispute billing errors — including unauthorized charges, charges for goods or services that weren’t delivered, calculation errors, and other common statement mistakes — and requires issuers to investigate and correct valid errors (Investopedia; FTC).
Key takeaways
– FCBA applies to open‑end credit (credit cards, charge cards, home‑equity lines of credit), not closed‑end loans (mortgages, auto loans) (Investopedia).
– You must send a written dispute to the creditor within 60 days of the first bill containing the error to preserve your FCBA protections (FTC / Investopedia).
– After you submit a valid written dispute, the creditor must acknowledge within 30 days and generally resolve the dispute within 90 days (FTC).
– While an error is being investigated, you may withhold payment only on the disputed amount; you still must pay the undisputed portion of the bill (FTC).
– Liability for unauthorized charges under the FCBA is limited to $50, though many issuers offer zero‑liability protections (Investopedia).
How the FCBA works — practical timeline
1. Identify the error (wrong amount, unauthorized charge, goods not received, duplicate charge, failure to credit payment, math error, etc.).
2. Send a written dispute to the creditor’s billing inquiries address within 60 days of the first statement that shows the error. (A phone call may help, but written notice is required for full FCBA protections.) (FTC / Investopedia)
3. Creditor must acknowledge your dispute within 30 days (unless it resolves the issue sooner).
4. Creditor must investigate and either correct the error or explain, in writing, why it believes the bill is correct — generally within 90 days (FTC).
5. While the investigation proceeds you may withhold payment only on the disputed portion. Pay or continue to pay the undisputed portion to avoid late fees or credit damage (FTC).
Rules for consumers — step‑by‑step practical actions
1. Review your statement thoroughly each month. Look for unfamiliar vendors, duplicated amounts, or unexpected changes.
2. Gather documentation: receipts, order confirmations, shipping tracking, emails, payment records, account statements, screenshots of cancellations or return confirmations.
3. Write and send your dispute — do this within 60 days of the first statement with the error. Include:
– Your name and account number
– A clear description of the billing error (date, amount, merchant)
– The dollar amount you dispute
– Why you believe the charge is incorrect and any supporting evidence
– A statement that you are sending the notice under the Fair Credit Billing Act (optional but helpful)
4. Send the letter to the creditor’s designated billing inquiries address (not the payment address), and use certified mail with return receipt when possible. Keep copies of everything.
5. Continue to pay the undisputed portion (and the minimum due on the account) to avoid late fees/penalties.
6. Follow up: if the creditor doesn’t respond within 30 days or the result is unsatisfactory, escalate (see “If the creditor won’t resolve it”).
Sample dispute letter (minimum elements)
– Date
– Creditor name and billing inquiries address
– Account number
– Statement date and transaction(s) in question (merchant name, date, amount)
– Brief explanation of the error and what you want done (remove charge, correct amount, credit back, etc.)
– List of enclosed supporting documents
– Signature and return address
(Keep copies and send certified mail.)
Rules for card issuers and other lenders (what they must do)
– Acknowledge receipt of a written dispute within 30 days (unless resolved earlier).
– Investigate the dispute and correct any billing errors, generally within 90 days.
– Notify the consumer in writing of the results and, if appropriate, credit the account for the disputed amount.
– During investigation, the creditor cannot try to collect the disputed amount or report it as delinquent (but may report the existence of a dispute to credit bureaus) (FTC).
What “account in dispute” means
The term refers to the period during which the creditor is investigating your dispute under the FCBA (generally up to 90 days). The issuer must either fix the error or provide a written explanation of why it believes the bill is correct (Investopedia).
Chargebacks vs. disputes
– Dispute (FCBA): A consumer’s written notice to their creditor that an item on an open‑end credit bill is incorrect; triggers the creditor’s investigation and FCBA protections.
– Chargeback: A mechanism where the card issuer (or payment network) reverses a merchant’s transaction, returning funds to the cardholder — often the practical outcome of a successful dispute. Chargebacks are governed by card network rules (Visa, MasterCard, etc.) and the issuer’s dispute process as well as the FCBA where applicable.
Will a dispute affect your credit score?
Filing an FCBA dispute itself does not directly change your credit score. However:
– The issuer may report that a dispute is in process, and that notation could appear on your credit report (Experian).
– If you stop paying the entire bill (including amounts not in dispute) or let undisputed portions go unpaid, that can lead to late payments and damage your credit. Always pay undisputed amounts and the minimum due.
Types of credit the FCBA does and does not cover
Covered:
– Open‑end credit: credit cards, charge cards, home‑equity lines of credit (HELOCs) (Investopedia).
Not covered:
– Closed‑end credit: mortgages, home equity loans, auto loans, student loans. Disputes involving these are handled under other laws and processes (for mortgages, for example, see RESPA and other mortgage‑specific protections) (Investopedia; FTC).
– Debit card transactions are governed by the Electronic Fund Transfer Act (EFTA/Regulation E), not the FCBA.
Can you dispute a “non‑refundable” charge?
Yes — “non‑refundable” language does not prevent you from disputing a charge if you have a valid basis (e.g., goods/services not delivered, unauthorized transaction, you never signed up). The creditor must still investigate and determine whether the merchant honored their terms or whether the charge should be reversed (Investopedia).
If the creditor doesn’t resolve your dispute — escalation steps
1. Request a full written explanation from the creditor and copies of any evidence they used.
2. Re‑send your dispute with additional supporting documents if you have them.
3. File a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov/complaint or the Federal Trade Commission (FTC) at consumer.ftc.gov (FTC resources noted in sources).
4. Contact your state attorney general’s consumer protection office.
5. Consider arbitration or small‑claims court — and consult an attorney if you seek damages or have a complex claim (keep in mind time limits; preserve all records).
Practical tips to improve success when disputing
– Act fast: start the process within the 60‑day window.
– Put it in writing and send to the correct billing inquiries address.
– Use certified mail and keep copies/receipts.
– Provide clear, organized supporting evidence (order numbers, tracking, correspondence).
– Keep notes of phone calls (who you spoke with, date, time, what was said).
– Pay undisputed amounts and minimum payment to avoid credit harm.
When to contact the merchant directly
For problems like non‑delivery, poor service, or billing mistakes, it’s often efficient to contact the merchant first (with supporting evidence). If the merchant won’t correct the charge, escalate to your card issuer with documentation of your efforts.
The bottom line
The FCBA is a powerful consumer protection for open‑end credit accounts. It gives consumers a clear, time‑limited process to challenge unauthorized or incorrect charges; requires creditors to investigate and correct valid errors; and limits cardholder liability for unauthorized use. Act promptly, submit a written dispute within 60 days, keep thorough records, and pay undisputed amounts while the creditor investigates.
Sources and further reading
– Investopedia — Fair Credit Billing Act (FCBA): https://www.investopedia.com/terms/f/fair-credit-billing-act-fcba.asp
– Federal Trade Commission — Using Credit Cards and Disputing Charges: https://consumer.ftc.gov/articles/0219-using-credit-cards-and-disputing-charges
– FTC — Your Rights When Paying Your Mortgage (for mortgage disputes): https://consumer.ftc.gov
– Experian — The Effects of Disputing Charges on a Credit Card: https://www.experian.com/blogs/ask-experian/credit-education/disputes/
If you want, I can:
– Draft a ready‑to‑send dispute letter tailored to your situation.
– Review a sample statement line and tell you whether it looks disputable and which evidence to collect.