How Long Must a Creditor Acknowledge a Billing Error?

When a consumer identifies an unexpected or incorrect charge on their credit card statement, understanding their rights and the proper steps to take is important. Federal law provides protections for individuals who encounter billing errors, outlining clear procedures for both the consumer and the creditor. These protections help ensure a fair process and can prevent financial complications, protecting one’s credit standing.

Understanding Billing Errors and Your Complaint

A “billing error” encompasses various issues, such as unauthorized charges, incorrect transaction amounts, or charges for goods and services not received as agreed. It also includes mathematical errors, failure to credit payments, or charges for items you did not request. Even a creditor’s failure to send a bill to your current address, if provided in writing, can constitute a billing error.

To formally dispute an error, you must send a written complaint to the creditor. This complaint needs to reach the creditor within 60 days of the first bill that contained the error. Send the complaint to the specific address designated by the creditor for billing inquiries, not merely the payment address.

Your written notice should clearly state your name, account number, the specific amount of the error, and the reason you believe an error exists. Send your complaint via certified mail with a return receipt requested. Keeping a copy of your letter and any supporting documents is important.

Creditor Acknowledgment Timeline

Upon receiving a valid written billing error complaint, the creditor must acknowledge its receipt. Under the Fair Credit Billing Act (FCBA), the creditor must acknowledge your complaint in writing within 30 days. This acknowledgment confirms receipt and initiation of an investigation.

The acknowledgment is not a resolution of the dispute itself, but confirmation that your complaint is being reviewed. During this investigation period, you are not required to pay the disputed amount. However, you must continue to pay any undisputed portions of your bill, including finance charges on those undisputed amounts.

This 30-day period ensures creditors act promptly on consumer disputes. It provides a formal start to the investigation process. The acknowledgment also serves as a timestamp for subsequent deadlines.

Creditor Resolution Timeline

Following the acknowledgment, the creditor must resolve the billing error dispute within a specified timeframe. The Fair Credit Billing Act mandates that the creditor either correct the error or provide a written explanation of why they believe the bill is accurate within 90 days of receiving your complaint. This 90-day period runs from the original receipt of your written notice, not from the acknowledgment.

If the creditor determines an error occurred, they must promptly correct your account and notify you in writing. Any finance charges or other charges related to the disputed amount must also be removed from your statement. If the creditor concludes there was no error, they must send you a written explanation detailing their findings and provide copies of relevant documents, should you request them.

Even if the creditor asserts the bill is correct, you still retain rights to further dispute the finding. At this point, the disputed amount, along with any accumulated finance charges, becomes due. The resolution process provides a definitive answer, allowing consumers to understand their financial obligations.

Your Next Steps if Deadlines are Missed

Should a creditor fail to meet these federally mandated deadlines—either by not acknowledging your complaint within 30 days or not resolving it within 90 days—consequences arise for the creditor. Even if the original bill was correct, the creditor may forfeit the right to collect the disputed amount, and any related finance charges, up to a maximum of $50. This forfeiture applies regardless of whether an error actually existed.

If a creditor misses these deadlines, you can take several steps. You may report the creditor to federal consumer protection agencies, such as the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC). These agencies investigate complaints and can take action against creditors who violate federal law.

You can also contact your state’s attorney general office, which may have jurisdiction over consumer protection laws. It is important to notify credit bureaus about the ongoing dispute. This action helps prevent the creditor from reporting the disputed amount as delinquent while it is under investigation or if they have failed to adhere to the established rules. Maintaining detailed records of all correspondence, dates, and actions taken is important for any further recourse.