Fair Credit Billing Act Summary:
Enacted in 1975, the Fair Credit Billing Act is a federal law that aims to protect consumers from prejudicial or unfair billing practices.
The Fair Credit Billing Act provides mechanisms to quell address billing errors in “open end” credit accounts, such as charge card accounts and credit cards.
The following list represents common billing errors that are denoted under the Fair Credit Billing Act:
• Charges made in the wrong amount
• Charges that appear on the bill, but were not actually processed by the consumer. Also referred to as unauthorized charges (Federal laws limit the consumer’s responsibility for unauthorized charges to $50).
• Charges for goods that were not delivered as specified at the time of purchase
• Charges for goods that are not received by the consumer
• Calculation errors
• Credit Card or charge card statements mailed to the incorrect address (creditor must receive the consumer’s change of address, in formal writing, at least 20 days prior to the end of the billing period
• Charges that the consumer wishes to clarify or requests proof for
• Failure to properly reflect charges or payments to credit or charge accounts
To take advantage of the protections awarded in the Fair Credit Billing Act a consumer must partake in the following actions:
• The consumer must write to the creditor at the appropriate address given for “billing inquiries” and not the address for sending payments. This letter must include the consumer’s name, his/her address, account number and description of the underlying billing error
• The consumer must send this letter so that it reaches the creditor within 60 days after the bill, which contained the error, was mailed.
• The letter should be sent certified mail, with a return receipt requested, so the consumer has definitive proof of what the creditor received. The consumer should include copies of sales receipts or other documents that support his or her position. It is also recommended that the consumer keep a copy of the dispute letter
• The underlying creditor must acknowledge the complaint letter within 30 days after receiving it. The creditor is then required, according to the provisions of the Fair Credit Billing Act, to resolve the dispute within two billing cycles (maximum of 90 days).
• The Fair Credit Billing Act enables consumers to file disputes concerning billing errors by sending written notices of disputes to their creditors. To trigger the provisions of the Fair Credit Billing Act, a consumer must mail a written dispute via regular mail (thru the US Postal Service) to the “billing inquiries” address that appears on their credit card statement.
What Happens when the Bill is in Dispute?
When the consumer’s bill is in dispute the individual may withhold payment for the disputed amount and any related charges. The withholding period is only active during the course of the investigation. The consumer must pay any remaining part of the bill not in question—this includes interest charges for the undisputed amounts.
During the investigation phase the creditor is not permitted to take any legal action to collect the disputed amount and related charges. At this stage, the consumer’s account cannot be restricted or closed; however, the disputed charge may be applied against the individual’s credit limit.
How does a Dispute Affect Credit Scores?
According to the Fair Credit Billing Act, a creditor may not threaten a consumer’s credit rating while the charge is in dispute. That being said, the creditor may report the dispute to various credit rating agencies. Furthermore, the Fair Billing Act and the Equal Credit Opportunity Act prohibit creditors from discriminating against applicants who exercise the right to dispute in good faith. A consumer, therefore, cannot be denied credit because the individual has disputed a bill.
What happens if the Bill is Correct?
If the investigation determines that the consumer’s bill is correct, the consumer must be notified immediately–in writing—as to how much he/she owes and why. At this point, the consumer will owe the disputed amount, plus any finance charges that accumulated during the investigation process. If the consumer disagrees with the ruling of the investigation, the individual may write to the creditor within 10 days after receiving the explanation. At this point, the individual can indicate that he/she refuses to pay the disputed amount and the creditor can engage in a collection process.
What happens if the Bill is Incorrect?
If the bill contains a mistake, the creditor must explain to consumer—in writing—the corrections that will be undertaken to the said account. At this point the creditor must credit the individual’s account and remove all finance or late charges related to the mistake. If the creditor determines that the consumer owes a portion of the disputed amount, the consumer must receive a written explanation as to why.
What happens if the Creditor fails to comply with the Fair Credit Billing Act?
If the creditor fails to follow the settlement procedures latent in the Fair Credit Billing Act they are legally not permitted to collect the amount in dispute, or any charges attached. For example, if a creditor acknowledges a complaint in 50 days—20 days too late—or takes more than two billing cycles to resolve the issue, they will not be allowed to collect on the dispute (even if the bill turns out to be correct). This provision of the Fair Credit Billing Act also applies to creditors who threaten to report or improperly report such instances to coordinating credit rating bureaus.
If a creditor violates the Fair Credit Billing Act, a consumer has a right to file legal action against the entity. If the consumer wins, they will be awarded damages, plus twice the amount of any finance charges, so long as the disputed amount is between $100 and $1,000. The court may also order the creditor to cover the consumer’s attorney fees and costs.
Other Billing Rights of the Fair Credit Billing Act:
A business who offers “open ended” lines of credit must:
• Provide statements for each billing period in which the consumer owes—or vice versa—more than one dollar
• Provide written notices when an individual opens a new account
• Send a bill at least 14 days before payment is due
• Credit all payments to the consumer’s account on the date they are received, unless no additional charges will result if the consumer fails to provide payment. A creditor is permitted to set reasonable rules for making payments, including setting deadlines for payments to be received
• A creditor must promptly credit overpayments and other amounts owed to the consumer’s account. This provision applies to instances where the consumer’s account is owed more than one dollar. The consumer’s account must credit promptly with the precise amount owed. If the consumer prefers a refund, it must be sent within seven business days after the creditor receives the individual’s written request. Additionally, the creditor must make a good faith effort to refund an individual’s credit balance that remains on account for more than six months.
Decorative contact lenses are a popular item, especially when holidays like Halloween are just around the corner. Most people think these items are sold over the counter legally, but all contacts are controlled by the Food and Drug Administration (FDA).
Vendors that advertise these decorative contact lenses as cosmetic items or sell them without requiring a prescription are in direct violation of the law. The law is in place to regulate these items, yes, but the laws are in place to protect the consumer as well.
Many illegal decorative contact lenses come in one size. Prescription contact lenses are for your specific eye size. If you use the wrong sized contact lenses—as people often do with decorative lenses—you can cause serious eye damage like:
-scratches to your cornea
-ulcers in the cornea
-weak vision and even blindness
Bernard Lepri, an optometrist with the FDA, state, “The problem isn’t with the decorative contacts themselves. It’s the way people use them improperly—without a valid prescription, without the involvement of a qualified eye care professional, or without appropriate follow-up care.”
The FDA states that consumers should never buy decorative contact lenses from street vendors, beauty stores or boutiques, Halloween stores, beach shops, or similar stores. You shouldn’t buy the lenses off the internet unless the website requires a prescription. Instead, get a prescription from an eye doctor and go to a seller that requires a prescription. If you notice any problems with your eyes, contact your eye doctor right away.
The FDA points to the story of Laura Butler as a warning to consumers who buy their contact lenses from illegal distributors. Butler bought a pair of decorative lenses from a souvenir shop for $30 while on vacation and ended up paying $2,000 in medical bills. She soon experienced a huge amount of pain after using the contact lenses, and she was diagnosed with corneal abrasion. She could have lost her eye, and she couldn’t drive for 8 weeks because of her vision.
Source: U.S. Food and Drug Administration