Fair Credit Billing Act
15 U.S.C. §§ 1666–1666jThe Fair Credit Billing Act is the credit card side of federal billing disputes. Enacted as an amendment to the Truth in Lending Act, it defines what counts as a billing error, sets a 60-day dispute window, requires issuer investigation within fixed deadlines, caps unauthorized use liability at $50, and preserves the right to assert merchant claims against the card issuer.
What It Covers
The FCBA applies to open-end credit accounts, which in practice means credit cards and certain lines of credit. It does not apply to debit cards, which fall under the EFTA instead. The statute gives cardholders a specific dispute right for billing errors, including charges for goods never delivered, charges in the wrong amount, charges not made by the cardholder, math mistakes, and failures to post a payment or a credit.
The cardholder triggers the FCBA dispute procedures by sending a written notice to the address the card issuer has designated for billing inquiries, within 60 days after the first statement showing the error. Once that notice is received, the issuer has 30 days to acknowledge and must resolve the dispute within two complete billing cycles or 90 days, whichever is shorter. While the dispute is pending, the issuer cannot try to collect the disputed amount, cannot close or restrict the account because of it, and cannot report the disputed amount as delinquent to any credit bureau.
The FCBA also preserves a particularly valuable consumer right at Section 1666i: the right to raise claims and defenses the cardholder has against the merchant as a defense against the card issuer. Subject to a $50 threshold and a geographic limitation for transactions that did not take place in the cardholder's home state or within 100 miles of their billing address, this means a cardholder who did not receive a product or was defrauded by a merchant can press that defense against the card issuer itself, provided the cardholder has made a good-faith effort to resolve the dispute with the merchant.
Key Provisions
- § 1666 Correction of billing errors, including the 60-day written dispute window after the statement showing the error.
- § 1666(a) Issuer investigation procedure: 30 days to acknowledge, resolution within two billing cycles or 90 days, whichever is shorter.
- § 1666(b) Definition of "billing error," including unauthorized charges, wrong amounts, undelivered goods or services, and unposted payments or credits.
- § 1666(e) Forfeiture of the first $50 of the disputed amount if the issuer fails to follow the required procedures.
- § 1666a Protections during the pendency of a dispute: no collection, no closure based on the dispute, no reporting as delinquent.
- § 1666i Right to assert claims and defenses against the card issuer for disputes with the merchant (subject to the over-$50 and in-state or within-100-miles conditions).
- § 1643 Liability for unauthorized credit card use capped at $50.
- § 1640 Civil liability under TILA: actual damages, statutory damages of $500 to $5,000 (and in some contexts higher), and attorney's fees.