If your credit card statement contains unauthorized charges, charges for goods never delivered, or mathematical errors that your card issuer refuses to correct, you may have a legal claim under the Fair Credit Billing Act (FCBA). The FCBA, codified at 15 U.S.C. § 1666 as part of the Truth in Lending Act, provides a structured dispute process that protects consumers from billing errors on credit card and revolving credit accounts. When creditors fail to follow this process, they can be held liable for damages. Rausa Russo Law, PLLC represents consumers across New York and nationwide in FCBA claims against credit card companies that ignore, mishandle, or violate the billing dispute process.
What This Law Covers
The Fair Credit Billing Act is a federal statute enacted in 1974 as an amendment to the Truth in Lending Act (TILA). It is codified at 15 U.S.C. §§ 1666-1666j and implemented by Regulation Z (12 C.F.R. § 1026). The FCBA applies to "open-end" credit accounts, which includes:
- Credit cards: Visa, Mastercard, American Express, Discover, and all other general-purpose and store-branded credit cards
- Charge cards: Cards that require full payment each month rather than allowing a revolving balance
- Revolving credit lines: Home equity lines of credit (HELOCs) and other revolving credit accounts that are accessed through a card or similar device
The FCBA does not apply to closed-end credit such as auto loans or mortgages (though those are covered by other provisions of TILA). It also does not apply to debit card transactions, which are governed by the Electronic Fund Transfer Act (EFTA) and Regulation E.
Under the FCBA, the term "billing error" is specifically defined to include the following categories:
- Unauthorized charges: Any charge on your statement that you did not authorize, including charges made by someone who used your card without permission
- Charges for goods not delivered or services not rendered: When you are billed for a product that was never shipped, was delivered in a materially different condition than described, or a service that was never performed
- Computational errors: Mathematical mistakes in calculating your balance, finance charges, minimum payment, or other amounts
- Failure to post payments or credits: When a payment you made or a credit you were promised does not appear on your statement
- Charges for which you request clarification: Any charge for which you need additional documentation or proof of the transaction
- Statements sent to the wrong address: If the creditor failed to send your statement to the correct address, provided you gave them your address at least 20 days before the end of the billing period
Common Violations
Credit card issuers and creditors frequently violate the FCBA in ways that harm consumers. Common violations include:
- Failing to acknowledge a written dispute: Under 15 U.S.C. § 1666(a), the creditor must send a written acknowledgment of your dispute within 30 days of receipt. Many creditors ignore written disputes or respond with form letters that fail to address the specific error you identified.
- Failing to resolve the dispute within two billing cycles: The creditor must resolve the dispute within two complete billing cycles, but no later than 90 days after receipt. Creditors that drag out investigations beyond these deadlines violate the statute.
- Reporting disputed amounts as delinquent: During the dispute period, the creditor is prohibited from reporting the disputed amount as delinquent to any credit reporting agency under 15 U.S.C. § 1666a(a). Despite this clear prohibition, creditors regularly report consumers as past due on amounts that are actively being disputed.
- Collecting on disputed amounts during investigation: The creditor cannot attempt to collect the disputed amount or restrict your account for nonpayment of the disputed amount while the investigation is pending.
- Failing to conduct a reasonable investigation: The creditor must actually investigate the dispute, not merely rubber-stamp the original charge. An investigation that consists solely of reviewing internal records without contacting the merchant or examining the transaction may be unreasonable.
- Failing to provide a written explanation: If the creditor determines that no billing error occurred, it must provide a written explanation of why it reached that conclusion and provide documentary evidence if the consumer requests it.
The FCBA's protections are triggered by a written dispute sent to the creditor's designated billing inquiry address. Phone calls and online chat messages, while useful for initial contact, do not trigger the FCBA's formal protections. Your dispute must be in writing, must be sent to the correct address (typically different from the payment address), and must be received within 60 days of the date the statement containing the error was mailed to you. Send your dispute via certified mail with return receipt requested to create a paper trail.
Your Rights
The FCBA provides a comprehensive framework of consumer protections during the billing dispute process:
- Right to dispute in writing: You have the right to send a written dispute to your creditor for any billing error listed above. The dispute must be sent within 60 days of the statement date.
- Right to acknowledgment: The creditor must acknowledge your dispute in writing within 30 days of receiving it.
- Right to a timely resolution: The creditor must resolve the dispute within two complete billing cycles (but no more than 90 days) from the date it received your written dispute.
- Right to withhold payment: You may withhold payment on the disputed amount (and any related finance charges) during the investigation without being considered delinquent. You must still pay any undisputed portions of your bill.
- Right to a clean credit report: The creditor cannot report the disputed amount as delinquent to any credit reporting agency while the dispute is pending. If the creditor reports the account, it must note that the amount is in dispute.
- Right to an explanation: If the creditor determines that no error occurred, it must send you a written explanation and provide copies of documentary evidence upon request.
- Right to continued dispute: If you disagree with the creditor's determination, you can write to the creditor within 10 days stating that you still refuse to pay. The creditor can then report the amount as delinquent but must also report that you dispute it, and must tell you who they are reporting to.
The Difference Between an FCBA Dispute and a Chargeback
Many consumers confuse an FCBA dispute with a chargeback, but they are distinct processes. A chargeback is administered by the card network (Visa, Mastercard, American Express) and is governed by the network's internal rules. An FCBA dispute is a formal legal process governed by federal statute. Key differences include:
- An FCBA dispute carries the force of federal law, including statutory damages for violations. A chargeback is governed by private network rules with no statutory remedies.
- The FCBA prohibits the creditor from reporting the disputed amount as delinquent. Chargeback rules do not provide this protection.
- The FCBA provides attorney's fees to prevailing consumers. Chargebacks do not.
- You may pursue both processes simultaneously, and success in a chargeback does not waive your FCBA rights.
Damages Available
FCBA violations are enforced through the Truth in Lending Act's damages provision at 15 U.S.C. § 1640. If a creditor violates the FCBA, you may recover:
- Actual damages: Compensation for all harm suffered, including damage to your credit score, higher interest rates on other accounts, emotional distress, and any out-of-pocket losses caused by the violation
- Statutory damages: Twice the amount of the finance charge, with a minimum of $200 and a maximum of $2,000 for individual actions. In class actions, total statutory damages are capped at the lesser of $1,000,000 or 1% of the creditor's net worth.
- Forfeiture of disputed amount: Under 15 U.S.C. § 1666(e), a creditor who fails to comply with the FCBA's dispute resolution requirements forfeits the right to collect the first $50 of the disputed amount, including finance charges.
- Attorney's fees and costs: The prevailing consumer is entitled to reasonable attorney's fees and court costs under 15 U.S.C. § 1640(a)(3)
When a creditor violates the FCBA by reporting a disputed amount as delinquent to the credit bureaus, you may also have claims under the Fair Credit Reporting Act (FCRA). This allows you to stack claims and pursue damages under both statutes, significantly increasing the value of your case.
How We Can Help
Rausa Russo Law, PLLC represents consumers who have been harmed by credit card billing errors and FCBA violations. Our attorneys understand the technical requirements of the FCBA dispute process and know how to hold creditors accountable when they fail to follow the law.
When you contact our firm, we will:
- Review your billing statements and dispute correspondence to identify all potential FCBA violations
- Assess your credit reports for improper reporting of disputed amounts, which may give rise to additional FCRA claims
- Prepare and send formal FCBA dispute letters if you have not yet disputed in writing, or evaluate the adequacy of disputes you have already sent
- Identify all liable parties, including the card issuer, the merchant, and any third-party servicers involved in the billing process
- Pursue litigation under TILA/FCBA to recover actual damages, statutory damages, and attorney's fees
- Coordinate parallel claims under the FCRA, state consumer protection statutes, and other applicable laws to maximize your recovery
Because the FCBA includes a fee-shifting provision for attorney's fees, most of our clients pay nothing out of pocket. If we prevail, the creditor pays our fees.