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fair credit billing act

Exposure Coverage: Know the Law!

June 18, 2009

in Personal Finance

It’s frightening to think of what could happen if your credit card is stolen. You may not realize it’s gone right away, and by the time you do, someone could have charged thousands of dollars in your name. And what if someone were to get your credit card number without your knowledge? By the time you receive your statement and catch on, the damage is already done.

Fortunately, the Fair Credit Billing Act (FCBA) protects cardholders from charges made when their credit cards are stolen. But it is important to understand the law in order to make it work for you. There are certain things you must do in order to take advantage of the protection the FCBA offers.

The FCBA is designed to cover cardholders who experience billing errors. In some cases, these errors may be the fault of the credit card company or a store from which you made a purchase. But unauthorized charges, including those made by someone who fraudulently obtained your credit card or account number, are also covered by the law.

According to the FCBA, a cardholder may not be held responsible for more than $50 in unauthorized charges if the creditor is notified of such charges in writing within 60 days after the first bill showing the error was mailed. That means that as long as you check each statement for errors and notify the credit card company in writing as soon as you catch them, you can’t legally be required to pay more than the first $50. The key here is that the communication must be written in order for the cardholder to be protected by law.

If you realize that your card is missing, it is best to notify the issuer by phone right away. Most credit card companies have a 24-hour toll-free number for reporting missing or stolen cards, and that number should be on your credit card statements. Once you’ve notified the creditor by phone, you should not be responsible for any charges made after the notification. And most companies will not charge you the $50 allowed by law even if charges have already been made. This is, however, at the creditor’s discretion.

Even if you do report your card stolen or missing by phone, it is important to follow up by mail within the 60-day time frame. Make a copy of the letter for yourself, and send it to the company via certified mail or with a return receipt request. This will give you proof that you provided proper notification should you ever need it.

Losing a credit card is a harrowing experience. But it’s reassuring to know that you are protected from unauthorized charges by law. As long as you notify the card issuer quickly, a misused card shouldn’t leave you with a mountain of debt.

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The Importance of Checking Credit Card Bills

June 11, 2009

in Personal Finance

Paying bills is something that no one looks forward to doing. It’s one of those things we just want to get out of the way. So we often look at how much is owed, write a check or pay online, and forget about it. But when it comes to credit card bills, that’s not such a good strategy.

Credit card statements detail each and every charge we’ve made since the last statement. That doesn’t make for a very exciting read, but it is an important one. If you don’t carefully go over the charges on your bill, you could end up paying more than you actually owe.

Here are some of the things to look for on your statements:

* Watch for charges that you didn’t authorize. If your card is not with you at all times, someone could have used it without your permission. And even if you haven’t lost your card, someone could have fraudulently obtained and used your card number.

* Compare each charge with the corresponding receipt. Mistakes happen, and you could have been charged an incorrect amount.

* Look for double charges. Equipment malfunctions or cashier errors can cause a charge to go through twice. Unscrupulous employees or companies may also make duplicate charges on purpose.

* Review charges imposed by the creditor, such as interest, fees and credit insurance. If you see anything suspicious, check the cardholder agreement to make sure the charge is legitimate.

If You Find a Mistake

When you find an error on your credit card statement, it’s important to report it quickly. If it’s the result of fraud, notifying the creditor can prevent further misuse. And in any case, cardholders must act within a reasonable amount of time in order to be protected by law.

The Fair Credit Billing Act (FCBA) states that cardholders must report billing errors in writing within 60 days from the date the first statement containing said error was mailed. If they do so, the creditor must either correct the mistake or prove that the charge is legitimate within two billing cycles. If the charges were not authorized by the cardholder, he may be held liable for no more than the first $50.

A phone call to your creditor can be helpful if you have questions about a particular charge. And in the case of unauthorized charges, a customer service representative can tell you if other charges have been made since the statement was prepared. But if there is an error, notifying the card issuer in writing is a must. Otherwise, you may have no legal recourse if they refuse to make a correction.

Checking your credit card bill doesn’t take long. If you keep your receipts organized, you can verify the charges in just a few minutes. And those few minutes could potentially save you a great deal of money.

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