Fair Credit Billing Act

The Fair Credit Billing Act (FCBA) is a federal law enacted in the United States to protect consumers against billing errors and unauthorized charges on their credit card statements. It establishes rights and procedures for consumers to dispute and resolve billing disputes with credit card issuers, including chargebacks.

Key provisions of the Fair Credit Billing Act include:

• Billing Error Resolution: The FCBA grants consumers the right to dispute billing errors, such as incorrect charges, unauthorized transactions, or charges for undelivered or damaged goods. Credit card issuers must promptly investigate and respond to these disputes within specific timeframes.
• Notification Requirements: The law stipulates that credit card issuers must provide consumers with regular billing statements that clearly disclose important information, including the billing due date, interest charges, and fees. It also mandates issuers to notify consumers of their rights under the FCBA, including the process for disputing billing errors.
• Chargeback Rights: The FCBA allows consumers to initiate chargebacks for unauthorized or erroneous charges. A chargeback is a mechanism that enables consumers to request a refund directly from the credit card issuer, reversing the transaction and returning the funds to the consumer’s account.
• Dispute Resolution Process: The FCBA outlines a specific process for consumers to follow when disputing billing errors. It requires consumers to notify the credit card issuer in writing within a specified timeframe and includes provisions for investigating and resolving the dispute. During the investigation, credit card issuers must temporarily withhold payment on the disputed amount.

The Fair Credit Billing Act empowers consumers by providing them with mechanisms to protect their rights and financial interests when dealing with billing errors or unauthorized charges. It promotes transparency, accountability, and fairness in credit card transactions, fostering consumer trust in the credit card industry.

For merchants, compliance with the FCBA is essential to handle billing disputes and chargebacks properly. Merchants can mitigate chargeback risks and maintain positive customer relationships by promptly and effectively addressing consumer disputes and providing necessary documentation during the investigation process.