What Is the Fair Credit Billing Act (FCBA)?

The Fair Credit Billing Act (FCBA) is a federal law designed to protect consumers from unfair billing practices involving open-end credit accounts such as credit cards and store charge accounts. The law applies to billing errors including unauthorized charges, incorrect amounts, goods or services not delivered as agreed, duplicate charges, inaccurately applied payments, and statements mailed to the wrong address.

Key Consumer Protections

  • Liability for unauthorized credit card charges is limited to $50.
  • Consumers have the right to dispute charges for products or services not received, items returned but not credited, or erroneous charges.
  • Creditors must provide clear instructions on how to dispute billing errors, both at account opening and periodically thereafter.

Timelines and Procedures for Disputes

To trigger legal protection under the FCBA, the consumer must send a written notice of the disputed charge to the creditor’s “billing inquiries” address within 60 days of receiving the statement containing the error. Telephone disputes alone do not preserve FCBA rights; written or, if accepted, electronic notifications are required.

Once the dispute is received:

  • The creditor must acknowledge receipt within 30 days.
  • The creditor then has up to 90 days (and no more than two billing cycles) to investigate and resolve the dispute.
  • During the investigation, the disputed amount is not subject to collection or finance charges, and cannot be reported as delinquent.
  • If the consumer disagrees with the outcome, they may further dispute the charge, and the creditor must also disclose to whom it reports any delinquency (like credit reporting agencies) and inform all such parties about the final resolution.

Steps Consumers Should Take if They Find a Billing Error:

  1. Send written notice of the error within 60 days.
  2. Await creditor’s response within 30 days.
  3. Dispute resolution must be completed within 90 days.
  4. Additional dispute possible if disagreement remains.

How Lawsuits Under the FCBA Work

If a creditor fails to comply with the FCBA—by not acknowledging a dispute, not properly investigating, or misreporting delinquencies—the consumer may bring a lawsuit in federal court. A lawsuit can seek corrective action, actual damages, and, for willful violations, statutory and punitive damages.

Recoverable Damages

Under the FCBA, aggrieved consumers may recover:

  • Actual damages: Any financial losses resulting from the violation, including out-of-pocket expenses, time spent correcting erroneous reports, and consequential losses.
  • Statutory damages: For willful noncompliance, statutory damages between $100 and $1,000 per violation.
  • Punitive damages: For egregious, willful violations, courts may award punitive damages at their discretion. ​
  • Attorney’s fees and costs: Reasonable attorney’s fees and costs may be awarded to prevailing consumers.

How Nahoum Law Can Pursue Your FCBA Claim

If you’ve been affected by credit card billing errors, you may have strong rights under the FCBA. As an experienced consumer protection law firm, Nahoum Law can help you:

  • Determine whether your situation is covered by the FCBA
  • Ensure all deadlines and notices are met
  • Maximize your financial recovery, including statutory and punitive damages
  • File suit against banks when necessary

Contact Nahoum Law today for a free evaluation of your FCBA claim. Safeguard your finances and enforce your rights under federal law.