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Fair Credit Billing Act (FCBA)


The Fair Credit Billing Act (FCBA) is a United States federal law enacted in 1974 as an amendment to the Truth in Lending Act. The primary purpose of FCBA is to protect consumers from unfair billing practices and provide a mechanism for addressing billing disputes related to credit cards. It establishes guidelines for timely resolution of disputes, corrections of billing errors, and prevents damage to credit ratings while disputes are ongoing.


The phonetics for the keyword “Fair Credit Billing Act (FCBA)” are:Fair: /fɛr/Credit: /ˈkrɛdɪt/Billing: /ˈbɪlɪŋ/Act: /ækt/FCBA: /ˌɛf ˌsi ˌbi ˈeɪ/

Key Takeaways

  1. The Fair Credit Billing Act (FCBA) is a federal law designed to offer consumers protection against unfair billing practices by creditors and provide mechanisms to dispute billing errors.
  2. The FCBA guarantees a range of consumer rights, including the right to dispute billing errors, the right to withhold payment on defective products, and protection against unauthorized charges on credit accounts.
  3. Under the FCBA, consumers must notify the creditor in writing within 60 days of receiving the billing statement containing the error, the creditor must acknowledge the dispute within 30 days and resolve the issue within two billing cycles or 90 days of receiving the dispute, whichever comes first.


The Fair Credit Billing Act (FCBA) is a vital piece of legislation that safeguards consumers by providing a structured process for addressing billing errors on credit accounts. By establishing guidelines for both financial institutions and consumers, FCBA ensures that disputes are resolved in a fair and timely manner, preventing unauthorized charges, incorrect billing amounts, or issues relating to the quality of purchased goods and services from negatively impacting an individual’s credit score. As a result, the act fosters transparency and trust between consumers and creditors, ultimately promoting responsible financial practices and a more stable credit environment.


The Fair Credit Billing Act (FCBA) was established with the primary purpose of protecting consumers from unfair billing practices, ensuring they have the necessary means to correct billing errors, and maintaining their trust in the credit system. One of the key motivations behind this act was to make the credit market more transparent and accessible to consumers by fostering an environment where they could rely on accurate billing statements. The FCBA does so by providing a standardized framework for disputing charges and addressing billing inaccuracies. As a result, consumer confidence in the credit market has grown, leading to the proliferation of credit cards and other credit products over the years.

The FCBA is particularly relevant when it comes to addressing billing issues such as unauthorized charges, charges for goods or services not delivered, computational errors, and other discrepancies between billed amounts and agreed-upon terms. The act sets forth guidelines on the procedures and timelines for resolving disputes, ensuring that such matters are addressed promptly and fairly. Additionally, the FCBA limits a consumer’s liability for unauthorized credit card charges, thus further safeguarding consumers from fraudulent practices. By offering a clear and reliable mechanism for dealing with billing disputes and wrongful charges, the Fair Credit Billing Act has significantly enhanced the consumer credit landscape, further contributing to the growth and stability of the credit market.


Example 1: Unauthorized TransactionsJane notices a charge of $150 on her credit card statement that she did not authorize. She immediately contacts her credit card company and explains the situation. Under the Fair Credit Billing Act (FCBA), the credit card company is required to investigate the issue and respond within 30 days. During the investigation, Jane is not required to pay the disputed amount, and her credit score won’t be affected. Upon investigation, the credit card company confirms that the charge was fraudulent, and they remove the charge from her account.

Example 2: Billing ErrorsTom receives his monthly credit card statement and discovers that he has been billed for a purchase twice. He immediately calls his credit card company and notifies them of the billing error. As per the FCBA guidelines, the credit card company investigates the issue and finds that it was indeed a billing error. They correct the mistake by removing the duplicate charge from Tom’s account, ensuring that he is only billed once for the purchase.

Example 3: Disputing Charges for Damaged GoodsSamantha orders an expensive camera online, and when it arrives, she finds it to be damaged. She contacts the seller to return the item for a refund, but they refuse her request. Samantha then disputes the charge with her credit card company, citing that the item she received was damaged. Under the FCBA, the credit card company is obligated to investigate her claim. After reviewing the case, they determine that Samantha is correct and issue a chargeback to the seller, providing her a refund for the damaged item.

Frequently Asked Questions(FAQ)

What is the Fair Credit Billing Act (FCBA)?

The Fair Credit Billing Act (FCBA) is a United States federal law that protects consumers from unfair and inaccurate billing practices by credit card companies. It provides guidelines for credit card issuers to promptly correct billing errors and resolve disputes reported by the customers.

When was the FCBA enacted?

The Fair Credit Billing Act was enacted in 1974 as an amendment to the Truth in Lending Act.

What types of billing errors does the FCBA cover?

The FCBA covers a variety of billing errors, including unauthorized charges, charges with incorrect dates or amounts, charges for goods not received, charges for goods not accepted, math errors, and the failure to correctly credit payments or returns.

How do I dispute a billing error under the FCBA?

To dispute a billing error, you must send a written notice to the creditor’s billing inquiry address, separate from where you send your payment, within 60 days of receiving the bill containing the error. Your letter must include your name, address, account number, and a clear explanation of the billing error.

What are the creditor’s responsibilities after receiving a dispute notice?

Upon receiving a written dispute notice, the creditor must acknowledge receipt of the notice within 30 days and resolve the dispute within two billing cycles, or 90 days (whichever comes first). During this time, the creditor may not attempt to collect the disputed amount, charge interest on the amount, or report it as unpaid to credit bureaus.

What happens if the creditor agrees with the billing error?

If the creditor agrees with the billing error, they must correct the error, refund any amounts overpaid, and remove any finance charges, late fees, or other charges related to the error.

What if the creditor disagrees with the billing error?

If the creditor disagrees with the billing error, they must send a written explanation as to why they believe the bill is correct, along with necessary documentation. The consumer may still challenge the decision, but if the bill is determined to be correct, the creditor may resume collection actions, including charging interest and reporting to the credit bureaus.

If my dispute is resolved, can the creditor report the issue to credit bureaus?

If your dispute is resolved in your favor, the creditor must notify the credit bureaus of the error and request that the information be corrected. They may not report the account as delinquent due to the disputed amount.

Can I be charged a late fee while my dispute is being investigated?

No, a creditor cannot charge a late fee on the disputed amount while the investigation is ongoing. However, you must still pay any undisputed amounts due on your account to avoid additional late fees or penalties.

Related Finance Terms

  • Consumer protection
  • Disputed transactions
  • Credit card issuer
  • Billing errors
  • Chargeback process

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