The Legal Foundation: The Fair Credit Billing Act
In the United States, the primary law governing credit card billing disputes is the Fair Credit Billing Act (FCBA), enacted in 1974 as an amendment to the Truth in Lending Act. The FCBA establishes clear rights for consumers and clear obligations for credit card issuers. Understanding this law is the first step in knowing when — and how — to challenge a charge.
What Transactions Does the FCBA Cover?
The FCBA applies to open-end credit accounts, which includes most credit cards. It covers billing errors such as:
- Charges for goods or services you did not accept or that were not delivered as agreed
- Unauthorized charges (charges made without your permission)
- Incorrect amounts charged
- Charges for which you requested an explanation or written proof
- Accounting errors or failures to credit a payment or return
Note: The FCBA applies to credit cards but has more limited application to debit cards, which are primarily governed by the Electronic Fund Transfer Act (EFTA).
Your Right to Dispute: Key Protections
1. The 60-Day Notification Window
Under the FCBA, you have 60 days from the date the statement containing the error was mailed to notify your card issuer in writing of a billing dispute. This deadline is strict — missing it can forfeit your FCBA protections, though your card issuer may still voluntarily assist you.
2. Written Notice Requirement
The FCBA technically requires written notice to your issuer. While most banks now accept online or phone disputes, sending a written letter (via certified mail) is the most legally protective approach for serious disputes.
3. Investigation Obligation
Once you notify your issuer, they are legally required to:
- Acknowledge your dispute within 30 days
- Resolve it within two billing cycles (but no more than 90 days)
- Refrain from attempting to collect the disputed amount while the investigation is ongoing
- Not report the disputed amount as delinquent to credit bureaus during the dispute period
4. Protection of Your Credit Score
This is one of the most overlooked protections: a creditor cannot damage your credit score by reporting a disputed amount as past due while the dispute is under investigation. They must note the amount as "disputed" if they do report it.
Debit Card Disputes: The Electronic Fund Transfer Act
If you use a debit card, the EFTA applies. Your liability for unauthorized charges depends heavily on how quickly you report them:
| Reporting Timeframe | Maximum Liability |
|---|---|
| Before any unauthorized charges occur | $0 |
| Within 2 business days of learning of loss/theft | $50 |
| 3–60 days after statement is sent | $500 |
| More than 60 days after statement is sent | Potentially unlimited |
Merchant Obligations You Should Know
Merchants are also bound by rules that protect you. They must:
- Honor any refund or return policies they advertise
- Disclose all terms and fees clearly before you agree to a purchase
- Issue agreed-upon credits within a reasonable timeframe
If a merchant violates their stated policies, this strengthens your chargeback claim considerably.
When Legal Escalation Is Appropriate
For large disputes or cases where your bank refuses to act properly, consider:
- Filing a complaint with the Consumer Financial Protection Bureau (CFPB)
- Contacting your state's Attorney General office
- Consulting a consumer protection attorney — many work on contingency for FCBA violations