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Credit Card Applications » Questions » User Questions » Limited/Bad/Fair Credit » What is the significance of Fair Credit Billing Act?

What is the significance of Fair Credit Billing Act?

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Fair Credit billing act was formed in 1974, to protect the rights of the consumers against fraudulent credit card companies and erroneous billing. According to fair credit act, the consumer has the right to dispute any inaccurate or wrong information on the credit card billing statement generated by the credit card companies.

The fair credit billing act covers all those areas that can go wrong in a credit card billing statement, like wrong entries caused by human error, unauthorized purchases that appears on the billing statement, wrong billing cycle dates, billing statement not reaching the consumer due to address mismatch, excessive items on the billing statement, whose purchase was cancelled or items purchased were not delivered.

A consumer must understand these laws well and use it to fullest benefit, because any dispute filed does not hurt the credit score of the consumer. You have the right to demand complete explanation for any of the above mentioned errors on your billing statement and have the right to dispute the billing entries on your statement. If required you can even file a case against the credit card company if the company does not heed to your request for clarification. These companies can be reported to the fair trade commission, and you can with hold any payment related to the disputed section.

There are certain guidelines for you to follow when you want to request clarification or dispute your bill, the letter requesting clarification from the company must be sent to the credit card company within 60 days of you receiving the bill. If you do not do so, then the credit card company is not bound by the law to provide you the clarification. Also, the company is bound to act on your request or dispute within 90 days of receiving it.

While you are disputing the bill, there are certain important things to keep in mind. Except the bill entry in question, all your other dues must be paid fully at the time of your dispute. Failing to do so might cause your credit score to go low and if you claim some money from the credit card company, you might not be awarded the amount for fault on payment.

The fair Credit billing act is formed for the complete advantage of the consumer, so to make full use of your benefits, make sure you read your credit card bill completely and thoroughly. Write back immediately to your company if you find any discrepancies, to get the response quicker.

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