The Fair Credit Billing Act (FCBA) has been created to protect you, the consumer. Though it is not necessary for you to know all the details about the Act, you should be familiar with the basics to get the most out of this law. The 3 major ways the FCBA will protect you are:
- Billing errors on your credit card bill
- Fraudulent use of your credit card
- The ability to use a defined resolution process to clear up any disputes with a vendor
- Withhold payment for a purchase until a resolution has been decided on without damaging your credit score
Amazingly, the FCBA has been around going on 45 years, so if you aren’t familiar with these basic provisions you may be hurting yourself financially. The basic idea behind the bill is to find a path to resolve complaints about the use of your credit card.
Let’s look more closely at each of these groups and find out the limits of your protection.
A billing error can be just about anything. If the company fails to post an item to your account that has been charged may be seen more as an error in your favor (but don’t collect $200). But that can cause problems down the road. If your bill is sent to the wrong address or not received at all, resulting in a late payment or other charges, that is covered under the FCBA. (Yes, it apparently includes postal workers burying mail for a number of years.) If you are charged the wrong amount, you can have the matter investigated and will not be held responsible for any interest on the overcharged amount. Finally, if you hear the common excuse by the company “it is a computer error” and their math is wrong, that is covered too.
Then there is the fraudulent use of you card, which basically means someone stole your card and used it or an “ex” used it without your permission. Judge Judy has a lot of shows on these types of cases, so it is fairly common. Your bank that issues the card will have stated policy on how much of the fraudulent charges you will be responsible to pay. In most cases it is $50, but some banks are very generous and have a $0 policy where you are not responsible to pay anything. Check each of your credit cards for the specific policy because even if they are all issued by the same bank, the terms and conditions of each card may be different.
Disputes about damaged, defective, or disappointing products and services are the third category under the FCBA. Before you can use your rights under the FCBA you must prove that you have made a good faith effort to resolve the problem with the vendor. This can be a bit of a problem because of the legal term “good faith.” The best way to approach the good faith effort with the vendor is to begin keeping a written record of all your efforts. Begin with keeping the receipt, a habit many consumers fail to do. If you contact the vendor by phone or in person, record the time and date of the conversation and the major points discussed. Try to resolve the problem by calling at least twice before exercising your FCBA rights.
Once your attempts at resolution with the vendor fail, you have to establish there is a direct relationship between the vendor and the bank issuing your credit card. That is why vendors will have those “We accept VISA” signs on their doors and sales counters. If your credit card is a VISA card, then using it at a store that accepts VISA cards will almost always mean a relationship has been established between the store and the bank for the purposes of using your FCBA rights.
Of course, there is always the fine print. Your rights in disputes with a vendor only apply to charges that are more than $50. I guess this means be sure to spend more to be safe. And if you have a dispute with a vendor that is not in your home state, your rights are not guaranteed (hmm.) If the purchase was made across state lines but within 100 miles of your home address, you are generally OK. Finally, there are those Internet purchases, which all fall under the laws of your individual state, so be sure to know what they are and how they apply to you.
That leaves us with the final category, withholding payment until a dispute has been resolved. The most important thing about this right is that you check your credit report regularly. There are a number of services that will notify you when there are major changes in your credit score, but you should be assertive and check your credit card bill and credit score every month. If there are any problems that involve your credit card, be sure to let both the bank and the credit reporting agencies know immediately. You can’t fix a problem you don’t know about, and they can’t fix a problem they don’t know about.
These basic will help navigate you through many of the problems you have with your credit cards. These rights are there to protect you from financial loss, so be sure to know them and use them.