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CREDIT
CARD BILLING RIGHTS/DISPUTING A BILL
Rights:
You may be thinking that you are
liable for unauthorized charges to your credit card. Telemarketers
often want you to think you need paid protection. You don't- you're
protected by law. Under the Fair Credit Billing Act, you are only
responsible for the first 50.00 of fraudulent charges and that's
only if you were careless in the cause of the fraud. Credit card
companies have insurance coverage for credit card fraud and therefore
it is not necessary for you to purchase coverage. Be
the first to know if someone has stolen your credit identity.
*Disputing
the bill
At certain times of the year, you may
find yourself facing particularly large credit card bills. At those
times especially, the Federal Trade Commission (FTC) advises you
to review your billing statements with care. Credit card billing
errors do occur, but they are simple to resolve if you know how
to use the Fair Credit Billing Act (FCBA). Under this law, you must
send the creditor a written notice about the problem to avoid paying
for any charges you dispute. Many consumers forfeit their rights
under this Act because they rely on calling the company to correct
a billing problem. You may call if you wish, but phoning does not
trigger the legal safeguards provided under the FCBA.
To
take full advantage of your rights under the law, this is what you
need to do.
1.
Write to the bank, the financial institution, or retailer who issued
the card. Your letter must be received within 60 days after the
issuer mailed you the first bill containing the error. In your letter
include: your name and account number; the date, type, and dollar
amount of the charge you are disputing; and why you think there
was a mistake.
2.
Be sure to send the letter to the special address for billing inquiries,
as designated by the card issuer. You frequently can find the proper
address on your bill under a heading such as "send inquiries
to."
3.
Do not put your letter in the same envelope as your payment. To
be sure the card issuer receives your letter, you may wish to send
it by certified mail. If you follow the previous requirements, this
is what the creditor is required to do.
4.
Acknowledge your letter in writing within 30 days after it is received,
unless the problem has been resolved within that time.
5.
Conduct a reasonable investigation and, within no more than 90 days,
either explain why the bill is correct or correct the error.
6.
Include documents showing that the charge was correct, if the creditor
states the bill is correct and you asked for "proof" in
your letter. Under the FCBA, the card issuer cannot close your account
just because you disputed a bill under the law.
If
you continue to have problems with the card issuer, you might wish
to seek legal advice or contact your local consumer protection agency.
For more information about this law, contact the FTC for a free
brochure. Write: "Fair Credit Billing," Public Reference,
Federal Trade Commission, Washington, D.C. 20580.
Third-Party
Credit Cards
Most of us are familiar with
credit
cards. Special federal laws protect you when you use a third-party
credit card. What is a third-party credit card? It is a card issued
by someone other than the seller. A VISA card or MasterCard is a
third-party credit card. A card issued by Smith's Department Store,
which can be used only at Smith's, is not. Suppose
you bought a TV set from Tim's TV for $500 using your VISA card.
The set doesn't work, and Tim's won't honor its warranty. Tim's
then closes its doors, leaving you with a broken TV set and an unpaid
$500 bill. You would have a claim against Tim's, but Tim's is out
of business.
Can
you make the same claim against the credit
card issuer? The answer is yes, if the following conditions
are met:
- -you
have tried to resolve the problem with the seller;
- -the
price was more than $50;
- -and
The sale took place in your state, or within 100 miles of your
home.
If
a problem like this arises and all three conditions are met, do
not pay the portion of the VISA bill for that item. You can't get
your money back from the credit card issuer once you have paid!
Do pay the rest of the bill. Send
a letter to the credit card issuer explaining that you are withholding
payment because of a disputed claim. Even if you have not met all
of the conditions, you should still notify your credit card issuer
of the problem. Sometimes the credit card issuer will credit your
account and work out the problem with the seller.
If
all three conditions are not met, the credit card issuer does not
have to credit your account and can require you to pay. Then you
will have to sue the seller yourself to get your money back.
Billing
Errors
Another common problem associated with the use of credit
cards is billing errors. Federal law offers you some protection
if your credit card bill has a mistake. This applies to bills for
credit cards, bank cards, department store charge accounts, and
other types of credit. In addition to math errors, the most common
billing errors covered by federal law include:
- charges
that do not tell you where you made the purchase;
- charges
made by someone else without your approval;
- charges
for things you have already paid for;
- charges
for items you never received; and
- charges
for things you took back.
Check
you statement carefully. It may tell you how to get in touch with
the creditor if you think there is an error. If you notice an error,
send a letter by registered mail to the creditor within 60 days
after you receive the bill. The creditor has 30 days to investigate
your claim and, if justified, make corrections. Calling
or writing a note on the return part of the bill is not enough!
What
types of disputes are covered?
The FCBA settlement procedures apply only to disputes about "billing
errors." For example:
- unauthorized
charges. Federal law limits your responsibility for unauthorized
charges to $50;
- charges
that list the wrong date or amount;
- charges
for goods and services you didn't accept or weren't delivered
as agreed;
- math
errors;
- failure
to post payments and other credits, such as returns;
- failure
to send bills to your current address - provided you supply a
change of address at least 20 days before the billing period ends;
and
- charges
for which you ask for an explanation, or written proof of purchase
along with a claimed error or request for clarification.
To
take advantage of the law's consumer protections, you must:
- Write
to the creditor at the address given for "billing inquiries,"
not the address for sending your payments, and include your name,
address, account number and a description of the billing error.
- Send
your letter so that it reaches the creditor within 60 days after
the first bill containing the error was mailed to you.
- Read
the law about reporting delinquencies while the bill is under
investigation
Send
your letter by certified mail, return receipt requested, so you
have proof of what the creditor received. Include copies (not originals)
of sales slips or other documents that support your position. Keep
a copy of your dispute letter. Find out more at www.ftc.gov
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