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Fair Credit Reporting Act (FCRA)
One of the most important laws protecting your identity and credit information is the Fair
Credit Reporting Act. Designed to promote the accuracy, fairness, and privacy of the information collected and maintained by credit reporting agencies,
the FCRA gives you specific rights:
You must be told if your information is used against you. If you are denied credit, employment, or insurance because of information in your report, the denying
party must alert you and provide you with the name, address, and phone number of the credit reporting agency used to support the denial.
You have access to your file. Upon request, a credit reporting agency must give you the information in your file and a list of everyone who has requested it
within a certain time period. There is no charge if you have been denied credit, employment, or insurance because of items in your file (if you make a request within 60 days).
In addition, you're entitled to one free report every 12 months if you are unemployed or on welfare, or have proof that your report is inaccurate.
You can dispute inaccurate information. A credit reporting agency must investigate items that you report as inaccurate. You will receive a full copy of the
investigation report. If the dispute is not settled to your satisfaction, you may add a statement to your report.
Inaccurate information must be corrected or deleted. Credit reporting agencies are required to remove or correct inaccurate or unverified information. They are not required
to remove accurate data unless it is outdated.
Access to your file is limited. Only people and institutions with needs recognized by the FCRA
may legally gain access to your file. This normally includes creditors, government agencies, insurers, employers, landlords, and some businesses. You
can remove your name from credit reporting agency lists used for unsolicited credit and insurance offers. Unsolicited offers must include a toll-free
phone number you can call to remove yourself from credit reporting agency lists.
Fair Credit Billing Act
Have you ever been billed for merchandise you returned or never received? Has your credit card company ever charged you twice for the same item or failed to credit a payment to your account? While frustrating, these errors can be corrected. It takes a little patience and knowledge of the dispute settlement procedures provided by the Fair Credit Billing Act (FCBA).
The law applies to "open end" credit accounts, such as credit cards, and revolving charge accounts - such as department store accounts. It does not cover installment contracts - loans or extensions of credit you repay on a fixed schedule. Consumers often buy cars, furniture and major appliances on an installment basis, and repay personal loans in installments as well.
What types of disputes are covered?
The FCBA settlement procedures apply only to disputes about "billing errors."
- unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50;
- charges that list the wrong date or amount;
- charges for goods and services you didn't accept or weren't delivered as agreed;
- math errors;
- failure to post payments and other credits, such as returns;
- failure to send bills to your current address - provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and
- charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.
To take advantage of the law's consumer protections, you must:
- write to the creditor at the address given for "billing inquiries," not the address for sending your payments, and include your name, address, account number and a description of the billing error.
- send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you
Send your letter by certified mail, return receipt requested, so you have proof of what the creditor received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.
The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving your letter.
Other billing rights
Businesses that offer "open end" credit also must:
- give you a written notice when you open a new account - and at certain other times - that describes your right to dispute billing errors;
- provide a statement for each billing period in which you owe - or they owe you - more than one dollar;
- send your bill at least 14 days before the payment is due - if you have a period within which to pay the bill without incurring additional charges;
- credit all payments to your account on the date they're received, unless no extra charges would result if they failed to do so. Creditors are permitted to set some reasonable rules for making payments, say setting a reasonable deadline for payment to be received to be credited on the same date; and
- promptly credit or refund overpayments and other amounts owed to your account. This applies to instances where your account is owed more than one dollar. Your account must be credited promptly with the amount owed. If you prefer a refund, it must be sent within seven business days after the creditor receives your written request. The creditor must also make a good faith effort to refund a credit balance that has remained on your account for more than six months.
If you would like to see the entire billing act (click here)