Billing Error Disputes

It’s important to review your monthly bank and/or credit card statements soon after receiving them. You might discover errors in that statement. The Fair Credit Billing Act offers protections to consumers like you, in the event that you notice an error in your statement and take appropriate action to correct the error within the designated period of time. This article will provide information for how to assert a billing error dispute when you notice an error on your monthly statement.

What is a billing error dispute?

A billing error could include many different situations, such as the charge for a return that remains on your statement, a charge for an item that you did not receive, double charge for an item that you purchased, an amount that is different than what you authorized or paid, or perhaps even a transaction that you did not authorize at all[1]. These are just a few examples of a billing error, but there could be other scenarios that might arise, so if you believe you have identified an error in your billing statement, you might consider asserting a billing error dispute with your creditor.

How do you assert a billing error dispute?

You have 60 days within the time when the statement with the error was mailed to you, or made available to you online. What this means, is that within 60 days you must (1) send a written letter or note to the creditor that (2) identifies your name and account number and (3) that describes what you believe is incorrect, including date and amount of the error.

Remember to send your letter to the address that is designated on your statement for sending “billing inquiries.” Do not send your letter to the same address where you send payments.

Helpful Tip: Send your notice by certified mail. You will receive a postcard back confirming the creditor received the billing error dispute notice and indicating the date when it was received.

Note, if you notice the error on your statement but do not send notice to the creditor before that 60 day window expires, then while your creditor may choose to honor your dispute as a courtesy to you, they will not be under a legal duty to respond to your billing error dispute, unless it also constitutes some other type of legal dispute that is not discussed in this article.

What are the legal requirements of the creditor?

The creditor must send you a letter that acknowledges receipt of your billing error dispute within 30 days of receipt of your dispute. The creditor is not required to have a response to your dispute at this time, because the regulation gives them two full billing cycles (but not longer than 90 days) to investigate your dispute.

The creditor is required to conduct an investigation to determine whether there was an error, or not. This investigation must be completed and a written explanation of the creditor’s decision must be sent to you within two full billing cycles (but not more than 90 days).

In other words, if the creditor determines that an error did occur, then they must send you a letter to let you know their conclusion and they must fix the error. If the creditor determines that an error did not occur or that a different error occurred, then they must send you a written explanation along with documentation that supports their conclusion.

What if the creditor does not meet these requirements?

If a creditor fails to comply with the legal requirements for handling a billing error dispute then you are not out of luck. There are legal remedies available to you in that situation.  You may be entitled to damages pursuant to the Fair Credit Billing Act.  In addition, you may be able to file a claim against the creditor with the Federal Trade Commission and/or State Attorney General.

What are your rights after you send a billing error dispute?

–  You are not responsible to pay the disputed portion of your bill while the dispute is pending.  The creditor cannot try to collect payment for the disputed portion of your bill from you during this time.

–  The creditor is prohibited from providing a negative credit reporting as a result of your failure to pay the disputed portion of the bill during the dispute period.

–  The creditor is prohibited from accelerating payment of your debt for the disputed portion of the bill.

–  The creditor is not able to assess late fees, interest charges, penalty fees, etc. for the unpaid disputed portion of your bill during the dispute period.

Remember that while you are allowed to not pay the disputed portion of your bill, you are still obligated to pay the portion of the bill that you do not dispute. The restrictions on a creditor that were explained regarding the disputed portion do not apply to undisputed portions.

Other information:

If the creditor determines that you are responsible for payment of the disputed portion then they must notify you by writing that they believe no error occurred. In that situation, you will be obligated to pay the amount that was previously disputed. In their letter to you, the creditor must tell you when your payment is due and the amount that is now due.

If you have a dispute about the quality of the goods or services that you received, these are not billing error disputes.  Other remedies and procedures may apply, but they are not covered by this article.

We are a debt relief agency.  We help people file for relief under the Bankruptcy Code.

The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.

[1] Depending on the facts surrounding your dispute, there may be other legal claims or disputes available to you. If you have questions or concerns you can contact an attorney for help.

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