Richard received his credit card bill and noticed an error. He wrote to the company the next week, pointing out the error in his bill. Under the law, what is the credit card's obligation once it receives Richard's letter?

Answer 1

Under the Fair Credit Billing Act, the company must acknowledge receipt of the letter within 30 days. Within two billing cycles (but not longer than 90 days) it must investigate the complaint. If an error is found, it must correct it and notify Richard. If the company finds no error, it must write to Richard with an explanation. The credit card company is prohibited from trying to collect the disputed amount nor can it close or suspend the account until it has responded to Richard's complaint. The credit card company cannot report to credit agencies that the consumer has an unpaid bill until ten days after the response. If the consumer still disputes the charge, the credit card company may report the amount to a credit agency, but must disclose that it is disputed.