Billing Disputes

The Fair Credit Billing Act defines a billing error as any charge for something you did not buy or for something bought by a person not authorized to use your account. Also included among billing errors is any charge that is not properly identified on your bill, that is for an amount different from the actual purchase price, or that was entered on a date different from the purchase date. A billing error may also be a charge for something that you did not accept on delivery or that was not delivered according to agreement. Finally, billing errors include errors in arithmetic; failure to reflect a payment or other credit to your account; failure to mail the statement to your current address, provided you notified the creditor of an address change at least 20 days before the end of the billing period, and questionable items or items on which you need additional information.

If you think your bill is wrong or you want more information about it, follow these steps:

• Notify the creditor in writing within 60 days after the bill was mailed. Be sure to write to the address that the creditor lists for billing inquiries, to give the creditor your name and account number and to say that you believe the bill contains an error and what you believe the error to be. State the suspected amount of the error or the item you want explained.
• Pay all of the parts of the bill that are not in dispute.

While waiting for an answer, you do not have to pay the disputed amount or any minimum payments or finance charges that apply to it.

The creditor must acknowledge your letter within 30 days, unless your bill can be corrected sooner. Within two billing periods, but in no case longer than 90 days, either your account must be corrected or you must be told why the creditor believes the bill is correct. If the creditor made a mistake, you do not pay any finance charges on the disputed amount. Your account must be corrected and you must be sent an explanation of any amount you still owe.

If no error is found, the creditor must promptly send you an explanation of the reasons for that determination and a statement of what you owe, which may include any finance charges that have accumulated and any minimum payments that you missed while you were questioning the bill. You then have the time usually given on your type of account to pay any balance.

If you are still not satisfied, you should notify the creditor within the time allowed to pay your bill.

Defective goods and services. The Fair Credit Billing Act provides that you may withhold payment on any damaged or shoddy goods or poor services that you have purchased with a credit card, as long as you have made a real attempt to solve the problem with the merchant. This right may be limited if the card was a bank credit card or a travel and entertainment card or any other credit card not issued by the store where you made your purchase. In such cases, the sale must have been for more than $50 and it must have taken place in your home state or within 100 miles of your home address.

A creditor may not threaten your credit rating while you are resolving a billing dispute. Once you have written about a possible error, a creditor is prohibited from giving out information that would damage your credit reputation to other creditors or credit bureaus. And until your complaint has been answered, the creditor may not take any action to collect the disputed amount.

After the creditor has explained the bill, you may be reported as delinquent on the amount in dispute and the creditor may take action to collect if you do not pay in the time allowed. Even so, you can still disagree in writing. Then the creditor must report that you have challenged your bill and give you the name and address of each recipient of information about your account. When the matter has been settled, the creditor must report the outcome to each recipient of information. Remember, you may also place your version in your credit record.

Tip Merchants cannot charge your account if you write a check and it bounces. Therefore, there is no reason to write your credit card number on your check. And no need to put your name, address or phone number on a credit card receipt. In some states, it's illegal for merchants to demand this information. Also, make sure you destroy all carbons. Thieves can use your account number to charge purchases or order new cards over the phone.