Fair Credit Billing Act

Make the law work for you. To get the Fair Credit Billing Act to work for you, here's what you need to do:

First off, try to resolve the problem with the merchant. "Give them the chance to fix it. Sometimes they do," says Cary L. Flitter, a consumer attorney in Narberth, Pa. "If you use common sense and courtesy, it usually gets the problem solved before it becomes a Fair Credit Billing problem." If possible, take the defective merchandise back to the store. Otherwise, call the store and ask for a manager or supervisor. Keep records of each conversation. "You always want to have a paper trail," says Deborah McNaughton, author of The Insider's Guide to Managing Your Credit. "Make notes of dates and times and who you talked to."

If the merchant won't budge, put your complaint in writing. Outline the dispute in a short, detailed letter to the merchant and send it certified mail. Be sure to make copies of the complaint letter sent to the merchant. One copy will be sent to your credit card company as proof that you tried to resolve the dispute with the merchant and one copy will be kept in your records.

The next step is contacting your credit card company and alerting them of the disputed purchase amount. To be protected under the Fair Credit Billing Act you'll need to do this in writing and within 60 days after the bill with the disputed charge was sent to you. In your letter, be sure to include your credit card account number, the closing date of the bill on which the disputed charge appears, a description of the disputed item and why you're withholding payment. Enclose a copy of your complaint letter to the merchant and any other documentation you may have supporting your position. Use this form letter to help get you started.

Send your letter by certified mail, return receipt requested, to the credit card company at the address for "billing inquiries" and not the address for payments. A credit card company cannot charge you finance charges on a disputed charge. But you will still be charged interest on any other purchases you may have made. Be sure to include a payment for these purchases with your letter.

Don't delay in the mailing of your dispute letter, especially if it includes a payment. Under the Fair Credit Billing Act, an issuer can take as many as five days to credit a payment not sent to the payment address. Your issuer will then contact the merchant and hear its side of the story. Two things can happen. If the card company sides with the merchant, you'll have to pay for the disputed item, plus any finance charges. If the card company sides with you, you don't have to pay a penny.

To dispute a bill, it's best to move quickly. You'll want to inform your card issuer of the disputed charge before it's due for payment. You can't withhold a payment once a bill is paid.