Fair Credit Billing Act: Billing Errors, Deadlines, and Remedies

A Fair Credit Billing Act dispute starts with a written notice sent to your credit card issuer within 60 days of the statement that first showed the error. Once the issuer receives it, federal law freezes collection on the disputed amount, blocks negative credit reporting on that amount, and forces an investigation on a strict timetable. The law covers open-end credit like credit cards and home equity lines of credit. It does not cover installment loans such as auto loans or traditional mortgages.¹

What Counts as a Billing Error

The dispute process only protects you when your problem fits one of the categories the statute lists.² The main ones:

Charges you didn’t make, or charges for a different amount than you agreed to
Charges you don’t recognize and want the creditor to document
Goods that never arrived, arrived wrong, or were materially different from what was described
Payments or refunds missing from your statement
Math errors in your balance, finance charges, or minimum payment
Statements the creditor failed to send to the address you gave at least 20 days before the cycle closed

A disagreement about whether something was worth the price is not a billing error. The law targets factual mistakes and processing failures. Poor quality of goods or services has a separate route, described further down.

The 60-Day Deadline and Where to Send the Notice

You have 60 days from the date the creditor sent the first statement showing the error. Not 60 days from when you noticed the charge, and not 60 days from the transaction. The clock runs from statement transmission.³ Miss that window and you lose the federal protections, even for an obvious error.

The notice must be written. A phone call to customer service does not trigger the statute. Electronic submission counts only if the creditor has told you in its billing rights disclosure that it accepts electronic notices and explained how to submit them.⁴ Many issuers now do, but check your billing rights statement before relying on the website.

The address matters as much as the deadline. Your notice has to go to the address the creditor has designated for billing inquiries, which is not the payment address.³ Look on the back of your statement or near the billing rights summary. A notice mailed to the payment processing center does not trigger the statute’s protections. This is the single most common procedural mistake, and it can sink an otherwise solid dispute.

If you mail the notice, use certified mail with return receipt requested. That gives you proof of delivery and a date. Keep your copy of the letter, the certified mail receipt, and the return receipt together.

What to Put in the Notice

The statute requires three things: your name and account number, the dollar amount you believe is wrong, and an explanation of why it’s wrong.³ The FTC’s sample letter also includes the date of the disputed charge, which helps the creditor find the transaction.⁵

Be specific. “I didn’t make this purchase” tells the investigator more than “this is wrong.” If a merchant shipped the wrong item, name what you ordered and what arrived. If you returned merchandise, give the return date. Vague notices invite vague denials.

Attach copies of anything that backs up your position: receipts, return tracking, screenshots of order confirmations, records of payments already made. Send copies and keep originals.⁵ Supporting documents aren’t legally required, but they make the investigation harder to brush off.

What the Creditor Must Do After Receiving Your Notice

Two deadlines apply. The creditor must send you written acknowledgment within 30 days, unless it resolves the dispute entirely inside that same 30-day window. It must finish the investigation and either correct the error or explain in writing why the charge is accurate within two complete billing cycles, and never later than 90 days after receiving your notice.³

While the investigation runs, you can withhold payment on the disputed amount without penalty. You still owe the minimum payment on everything else, and interest keeps accruing on undisputed balances. The creditor cannot try to collect the disputed charge, cannot charge you late fees on it, and cannot report it as delinquent to any credit bureau while the investigation is open.⁶ It also cannot threaten your credit standing to pressure you to pay.

If the creditor finds the error valid, it has to correct your account and remove any finance charges or late fees that flowed from the mistake. If it concludes the charge was accurate, it must send you a written explanation and give you at least 10 days to pay before treating the amount as overdue.⁷

If the Creditor Denies Your Dispute

A denial doesn’t end the process. Inside the payment window the creditor gives you (the longer of 10 days or your normal payment period), you can send a second written notice stating that you continue to dispute the amount.⁷ This doesn’t reopen the investigation. What it does is trigger the credit reporting protections that follow denial.

After that second notice, the creditor can report you as delinquent, but only if it simultaneously reports that the amount is in dispute and tells you the name and address of every credit bureau it contacted.⁶ When the dispute is later resolved, the creditor has to report the resolution to every bureau it previously told about the delinquency. Send the second notice the same way you sent the first: certified mail, return receipt, copies kept.

If you think the creditor mishandled the investigation or ignored the procedural rules, you can file a complaint with the Consumer Financial Protection Bureau or talk to a consumer protection attorney about a federal lawsuit.

Disputing Poor-Quality Goods or Services

A separate section of the law lets you assert claims against the card issuer when a merchant sells you defective goods or provides substandard services. It works differently from the billing error process.⁸ Three conditions apply:

You made a good-faith effort to work things out with the merchant first
The purchase was more than $50
The transaction happened in your home state or within 100 miles of your billing address

The dollar and geographic thresholds disappear when the merchant is the card issuer, is controlled by the issuer, is a franchised dealer of the issuer, or made the sale through a mail solicitation the issuer participated in.⁸ You can only dispute up to the amount of credit still outstanding on the transaction when you first notify the issuer. If most of the charge is already paid off, your claim shrinks to the remaining balance.

Unauthorized Charges Are a Different Rule

If someone uses your card without permission, federal law caps your personal liability at $50, and even that is only enforceable if the issuer gave you adequate notice of the potential liability and provided a way to report the card lost or stolen.⁹ Once you notify the issuer, you owe nothing for further unauthorized use. Most major issuers waive the $50 through zero-liability policies, but the federal floor exists regardless. This rule is separate from the billing error process, though you can raise an unauthorized charge as a billing error too.

What You Can Recover If the Creditor Breaks the Rules

A creditor that fails to follow the billing error procedures forfeits the right to collect the disputed amount and any finance charges on it, up to $50. That forfeiture applies even if the underlying charge was legitimate.³

If you sue, the creditor faces broader liability under the Truth in Lending Act’s civil damages provision. You can recover actual financial harm plus statutory damages. For open-end credit not secured by real estate, statutory damages equal twice the finance charge on the disputed transaction, with a floor of $500 and a ceiling of $5,000. A court can award more if it finds a pattern of violations.¹⁰

The creditor also has to pay your attorney’s fees and court costs if you win. That fee-shifting is what makes these cases viable when the disputed amount is small. You have one year from the date of the violation to file suit.¹⁰

1
Cornell Law Institute. Fair Credit Billing Act (FCBA)
2
Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors – Section: Billing Error
3
Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
4
Consumer Financial Protection Bureau. 12 CFR 1026.13 – Billing Error Resolution
5
Federal Trade Commission. Sample Letter for Disputing Credit and Debit Card Charges
6
Office of the Law Revision Counsel. 15 USC 1666a – Regulation of Credit Reports
7
eCFR. 12 CFR 1026.13 – Billing Error Resolution
8
Office of the Law Revision Counsel. 15 USC 1666i – Assertion by Cardholder Against Card Issuer of Claims and Defenses Arising Out of Credit Card Transaction
9
eCFR. 12 CFR 1026.12 – Special Credit Card Provisions
10
Office of the Law Revision Counsel. 15 USC 1640 – Civil Liability