Fair Credit Billing Act (FCBA)

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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated August 5, 2020

What is the Fair Credit Billing Act (FCBA)?

The Fair Credit Billing Act (FCBA) is an amendment to the Truth in Lending Act. The FCBA is meant to protect consumers from unfair or inaccurate billing practices by providing a system for consumers to contest inaccurate credit card bills.

How Does the Fair Credit Billing Act (FCBA) Work?

If a consumer notices a billing error has occurred, they are allowed to dispute the bill by sending a written letter to the creditor.  Under the FCBA, a consumer is allowed to send a letter to the creditor within 60 days of the disputed purchase. The creditor then has 30 days to acknowledge the dispute and another 90 days to either chargeback the error or send a letter explaining why they think no error has occurred.  However, under the FCBA, the consumer is ultimately given the right to see all official documentation between the creditor and purchaser.

There are other regulations within the FCBA meant to protect consumers. For example, the FCBA prevents banks from reporting a disputed credit card bill payment as delinquent unless they disclose that the charge is disputed.  Also, credit card companies are not allowed to prevent a merchant from offering discounts to consumers if they pay by cash or check instead of credit cards. The FCBA also gives consumers the right to file suit against credit card companies.

Why Does the Fair Credit Billing Act (FCBA) Matter?

The FCBA outlines the rights given to consumers in regard to credit card billing errors. With regulation like the FCBA, consumers can be sure of their rights when trying to settle disputes with merchants or the credit card companies themselves. By clearly stating consumers' rights, the FCBA and other consumer protection legislation give consumers more confidence when making purchases on credit.

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