What is the Fair Credit Billing Act?

The Fair Credit Billing Act (FCBA) is a federal law that protects consumers from unfair credit card billing practices in Washington. The FCBA gives consumers the right to dispute inaccurate or incomplete information on their bills and gives them the right to withhold payment for goods or services deemed unsatisfactory. Under the law, credit card companies are required to investigate disputes within two billing cycles and must either correct the bill or explain why it is correct. In addition, credit card companies cannot close a consumer’s account or take any other adverse action while an investigation is pending. The FCBA also covers unauthorized charges and billing mistakes due to clerical errors. If a customer spots a charge they did not make, they can require the card issuer to investigate it and may not have to pay the amount in question. The customer is also only responsible for up to $50 in fraudulent charges. Lastly, the FCBA prohibits creditors from punishing customers for disputing charges, even if it turns out the customer was wrong. Credit card companies cannot report that a customer is delinquent unless the customer does not pay for a legitimate charge. All in all, the Fair Credit Billing Act is a federal law that protects consumers from unfair credit card billing practices and is designed to provide consumers with a safeguard against unauthorized or incorrect charges.

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