The Fair Credit Billing Act is a federal law that lets you formally dispute charges on your credit card and other revolving credit accounts, caps your liability for unauthorized use at $50, and forces creditors to follow strict deadlines when they investigate your complaint. It works only if you use it correctly: the dispute has to be in writing, sent to the right address, and delivered within 60 days of the statement showing the problem.
What the Law Covers
The FCBA applies to open-end credit accounts, meaning accounts where the balance can rise and fall from month to month. Credit cards are the obvious example. Retail store charge cards and other revolving credit lines are also covered.1Office of the Law Revision Counsel. 15 USC Chapter 41, Subchapter I, Part D – Credit Billing
Closed-end loans with fixed payment schedules are not covered. That excludes auto loans, mortgages, personal installment loans, and student loans. Debit cards are also outside the FCBA because they draw from your bank account rather than extending credit; a separate federal law with weaker protections governs them, and the difference is spelled out below.
Billing Errors You Can Dispute
Federal law lists seven categories of billing errors. If your problem fits one of them, you can trigger the formal dispute process:
- Charges you did not make or authorize.
- Charges for a different dollar amount than you agreed to pay.
- Charges for goods you never received or refused on delivery because they didn’t match what was promised.
- Payments or credits the creditor failed to apply to your account correctly.
- Math mistakes on your statement, including bad interest or fee calculations.
- A statement sent to the wrong address, if you gave the creditor your correct address at least 20 days before the billing cycle closed.
- Charges you need more information about, including a request for documentation showing you authorized the transaction.
That last category is broader than most people realize. You can formally dispute a charge just to see proof of it, even if you suspect you did authorize it.2Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
How to File the Dispute
The dispute must be in writing. A phone call does not trigger the law’s protections, no matter how thorough the conversation. Your written notice needs three things: your name and account number, the exact dollar amount you believe is wrong, and a clear explanation of why the charge is an error.2Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
Send it to the address your creditor designates for billing inquiries. That address is usually printed on the back of your statement and is almost always different from the payment address. A notice mailed to the wrong address may leave the creditor with no legal obligation to respond.
The notice has to reach the creditor within 60 days after the creditor sent or electronically transmitted the first statement showing the error.3Consumer Financial Protection Bureau. 12 CFR 1026.13 – Billing Error Resolution If no statement was ever sent, the 60 days run from the date the statement should have been sent. Certified mail with a return receipt gives you proof of delivery if the creditor later claims it never arrived.
What the Creditor Has to Do
Two deadlines start running once your written notice arrives. The creditor has 30 days to send a written acknowledgment, unless it resolves the entire dispute inside that same 30-day window.3Consumer Financial Protection Bureau. 12 CFR 1026.13 – Billing Error Resolution
The full investigation must be completed within two billing cycles, and never more than 90 days from receipt of your notice. If the creditor confirms an error, it must correct the account and remove any related finance charges or late fees. If it concludes no error occurred, it must send you a written explanation and any supporting documentation.
Your Rights While the Dispute Is Open
You can legally withhold payment on the disputed amount during the investigation, including any finance charges or minimum payment tied to that charge. The rest of the balance you still owe, on the normal schedule.4Federal Trade Commission. Fair Credit Billing
The creditor cannot take collection action on the disputed amount, threaten your credit, or report you as delinquent to a credit bureau while the dispute is pending. It can note that you are disputing the charge, but that notation does not harm your score the way a delinquency would. The creditor also cannot close or restrict your account solely because you filed the dispute.1Office of the Law Revision Counsel. 15 USC Chapter 41, Subchapter I, Part D – Credit Billing One caveat worth knowing: the disputed amount can still count against your available credit limit while the investigation runs.
What Happens After the Investigation
If the creditor finds an error, it credits your account and removes every finance charge and fee attached to the disputed amount. You owe nothing further on that charge.
If the creditor decides no error occurred, its written explanation triggers your next choice. You owe the disputed amount plus any accumulated finance charges, and you have at least 10 days from receiving the explanation before the creditor can report the amount as past due. If you write back within that window stating you refuse to pay, the creditor can start reporting the amount as delinquent, but it must also report that you dispute the charge and notify you of the reporting. When the matter is eventually resolved, the creditor has to update the bureau.
Charges for Defective Goods or Services
The FCBA gives you a second, separate right. If you bought something with a credit card and the goods are defective, not as described, or the service was never properly delivered, you can withhold payment from the card issuer on the remaining balance of that purchase, raising the same complaint against the issuer that you would raise against the merchant.5Office of the Law Revision Counsel. 15 USC 1666i – Assertion by Cardholder Against Card Issuer of Claims and Defenses
Three conditions apply:
- You must have tried in good faith to resolve the problem with the merchant first.
- The original purchase must be for more than $50.
- The purchase must have occurred in the same state as your billing address, or within 100 miles of it.
The $50 minimum and geographic limits fall away when the merchant is tied to the card issuer, such as when the seller is owned or controlled by the issuer, is a franchised dealer for the issuer’s products, or when the transaction came from a mail or telephone solicitation the issuer took part in.5Office of the Law Revision Counsel. 15 USC 1666i – Assertion by Cardholder Against Card Issuer of Claims and Defenses
Online purchases sit in a gray zone. Where the transaction “occurred” is determined by state law, which varies.6Consumer Financial Protection Bureau. 12 CFR 1026.12 – Special Credit Card Provisions Some states treat the buyer’s home as the location, satisfying the geographic test automatically; others look to where the merchant is based. The most you can dispute under this provision is the amount still outstanding on the specific purchase when you first notify the issuer.
Unauthorized Charges and the $50 Cap
If someone uses your credit card without permission, your personal liability is capped at $50. Even that $50 applies only if the issuer met three conditions: it gave you notice of your potential liability, it provided a way to report loss or theft, and it included a method for identifying the authorized user. Miss any of those and you owe nothing.7Office of the Law Revision Counsel. 15 USC 1643 – Liability of Holder of Credit Card
Report the card lost or stolen before any unauthorized charge posts and your liability is zero regardless. Most major issuers now offer voluntary zero-liability policies that wipe out the $50 as well, but those are corporate policies rather than legal requirements.
“Unauthorized use” has a specific meaning: someone who had no actual or apparent authority to use the card and whose use gave no benefit to you.8eCFR. 12 CFR 1026.12 – Special Credit Card Provisions Hand your card to a family member who then overspends, and it likely counts as authorized because you gave them access. A stranger who lifts your card number online is a different case.
Debit Cards Are Not Covered
The FCBA does not apply to debit cards. Debit card disputes fall under the Electronic Fund Transfer Act, which uses a tiered liability system that gets worse the longer you wait:9Consumer Financial Protection Bureau. 12 CFR 1005.6 – Liability of Consumer for Unauthorized Transfers
- Report within 2 business days of discovering the loss and liability is capped at $50.
- Report after 2 business days but within 60 days of your statement and liability can reach $500.
- Report after 60 days from your statement and you could lose everything taken after that mark, with no cap.
The practical gap is significant. With a credit card, you dispute charges on money you haven’t paid yet, and the $50 cap holds no matter when you report. With a debit card, the money is already gone from your bank account, and your ability to recover it drops fast.
What You Can Recover If the Creditor Breaks the Rules
A creditor that ignores the acknowledgment and investigation rules forfeits the right to collect the disputed amount and any related finance charges, even if the charge was legitimate. That automatic forfeiture is capped at $50 per dispute.2Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
You can also sue. Statutory damages run to twice the finance charge on the transaction, with a floor of $500 and a ceiling of $5,000, and courts can go higher when a creditor shows a pattern of violations. If you win, the creditor pays your attorney’s fees and court costs.10Office of the Law Revision Counsel. 15 USC 1640 – Civil Liability The fee-shifting piece often matters more than the damages themselves; a $500 award rarely justifies a lawyer on its own, but the prospect of recovering fees makes attorneys more willing to take these cases.