What to Do About Errors

If you have errors on your credit card statement, you have recourse. Under the Fair Credit Billing Act (FCBA), there are specific steps you can take to correct your account.

What kinds of errors are covered? According to the Federal Trade Commission, the FCBA covers such billing errors as:

• unauthorized charges (federal law limits your responsibility for unauthorized charges to $50);
• charges that list the wrong date or amount;
• charges for purchases you didn’t accept or that weren’t delivered as agreed;
• math errors;
• failure to post payments and other credits, such as returns;
• failure to send bills to your current address (as long as the credit card provider received your change of address, in writing, at least 20 days before the end of the billing period); and
• charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.

If you discover an error, you should take advantage of the law’s consumer protections. This means you must follow a set process:

1. Write to the credit card company at the address shown on your bill for “billing inquiries,” which most likely is different from the payment address.
2. In your letter, include your name, address, account number and a description of the billing error.
3. Include copies (not the originals) of any sales receipts or other documentation that supports your position. Also, be sure to keep a copy of the dispute letter.
4. Mail your letter so that it reaches the credit card company within 60 days after the bill that first contained the error was mailed to you.
5. Send your letter by certified mail and get a return receipt, so you have proof that you mailed it, as well as proof that the credit card company received it.

The credit card company has to acknowledge your complaint in writing within 30 days of receiving your letter, unless the problem has already been cleared up.

And the company also must act quickly. The FCBA allows only two billing cycles—or not more than 90 days since receiving your letter—for the company to resolve your dispute.

While the dispute is being resolved, you do not have to pay for the amount in question, and it cannot be reported to credit agencies as delinquent.

The credit card company can report that you have disputed your bill, and the company also can apply the amount in dispute toward your credit limit.

If the credit card issuer caused the error, it must provide an explanation to you in writing. It also has to credit your account and remove any late fees or other penalties related to the billing error.

If the company determines that the bill was correct and you were in error, you must again be notified in writing. Then you must pay the amount, as well as any finance charges accrued. You also may have to pay the difference between the minimum amount you did pay during the dispute and the amount you otherwise would have had to pay.

If you still believe the creditor is wrong, you have to act fast. You have only 10 days to reply to the credit card company’s letter. And here’s where your protection starts to drop off.

You may tell the credit card company that you refuse to pay the disputed amount, but now the company is allowed to begin collection procedures.

The company can report your account as delinquent to the credit bureaus, although it has to notify them that you believe you don’t owe the money. Plus, it has to tell you who received these reports.

If you are in the middle of disputing a charge—or if you have a questionable charge on your bill—you’ll need to refrain from transferring the balance on the credit card. If you transfer the balance, you may lose the right to dispute previous charges.

Next: Conclusion