Billing errors are any number of discrepancies found on your billing statements, which are most commonly associated with credit cards. Computational errors, unauthorised charges, charges for items you did not accept, and charges for services you did not receive are all examples of billing errors. Billing error laws, however, no longer apply if you accept an item or service. If you accept an item, your remedy must be in accordance with withholding laws. If you discover a billing error on your credit card account, you must notify your credit card company in writing.
Part 1 Identifying Billing Errors
1. Examine your credit card statements on a regular basis. Each month, your credit card company will send you a statement for each account you have. Your statements may arrive in the mail, be emailed to you, or you may need to go online and download them. Make a copy of each one, regardless of how they are delivered. These statements detail every purchase you made with your credit card, including how much you spent and where you spent it.
While credit card companies are generally pretty good at avoiding billing errors, they do occur on occasion. If one does occur, you will miss it unless you double-check your statement.
2. Examine your purchases in relation to your receipts. When reviewing your credit card statement, your goal is to match every purchase, interest charge, and credit to actual transactions. Comparing your credit card statement to your purchase receipts, interest notifications, and credit notifications is the best way to do this. As a result, in addition to keeping all of your previous credit card statements, it is also critical to keep evidence of all credit card transactions.
Begin by reviewing the first transaction on your credit card statement. Any given transaction will include the name of the entity where the purchase was made, the amount associated with the transaction, and whether or not it was completed. Check your receipts or notifications for that transaction. Check that the amount on your receipt corresponds to the amount on your statement.
For each transaction on your statement, repeat these steps. If everything matches, there was no billing error. If there are any discrepancies, you will need to look a little closer to figure out what happened.
3. Identify and correct common billing errors. You’ll probably find it useful to understand common billing errors so you can spot them more easily. Billing errors can appear on your statement in a variety of ways. The following are the most common billing mistakes:
Purchases discovered on your bill that you did not make
a failure to credit that was supposed to be applied to your account
Purchases discovered on your statement that you made but returned
Purchases that do not include a recipient’s name (i.e., you cannot tell where the purchase was made)
Accounting errors in statements (i.e., the numbers just don’t add up)
Part 2 Providing Written Notice
1. Examine the billing rights summary. When you apply for a credit card, the company will send you a billing rights summary in addition to your new card. If you can’t find the billing rights summary, contact your credit card company and ask for a replacement. The billing rights summary will tell you where to send your written notice as well as any additional rules that the credit card company may have.
In general, the billing rights summary will simply reflect your federal and state legal rights. Credit card companies must send you this information in order to inform you of your rights.
2. Notify the credit card company as soon as possible. If you believe a billing error has occurred, you must notify the credit card company within 60 days of receiving the statement containing the disputed charge. To be valid, your notification must be in writing. If you call or contact the credit card company in a way other than in writing, your credit card company may require you to send the complaint in writing within a certain amount of time after you voiced your complaint (e.g., within 10 days of orally notifying the credit card company).
3. Make a written notice. Within your 60-day deadline, you must draught a written notice that complies with both federal and credit card company standards. You should type, print, and mail your written notice. When possible, avoid using email or fax. A sample letter disputing billing errors can be found at https://www.consumer.ftc.gov/articles/0385-sample-letter-disputing-billing-errors. In general, your written notice must include the following information:
Your name as it appears on your credit card.
Your credit card number.
The name of the seller as it appears on your statement.
The date of the purchase.
The amount of the transaction.
A description of the billing error. For example, if you recognize a purchase you made at the grocery store but the amount on the statement is more than what your receipt shows you should have been charged, explain this.
The address where you are sending the notice.
The date of the notice (i.e., the date you send the letter in the mail).
4. Please send the notice to the correct address. When you’ve finished writing your notice, make sure you send it to the correct address. The correct address can be found in the billing rights summary provided by the credit card company. If you fail to send it to the correct address, your written notice may be invalid, and your claim may be delayed. You may not be able to dispute the billing error if you do not respond correctly and on time.
5. Keep an eye out for the credit card company’s initial response. When the credit card company receives your notice, federal law requires them to respond within a specific time frame and in a specific manner. Credit card companies are generally required to respond in two ways:
First, the credit card company must correct the error or provide you with a written acknowledgement that they have received your notice within 30 days of receiving it.
Second, the credit card company must decide whether an error occurred and how it will be corrected within two billing cycles.
6. A final decision is awaited. If your credit card company believes there was a billing error, the company must correct the error, credit your account in the correct amount, and mail you a correction notice. If your credit card company conducts an investigation and determines that no billing error occurred, they must send you a determination letter explaining why they believe there was no error.
7. If you disagree with their decision, write to your credit card company. If your credit card company denies the billing error and requests payment of the disputed amount, you can write to express your dissatisfaction with the decision. You can include a request for copies of any relevant documents used by the credit card company in your written dispute. You can also state in your letter that you are refusing to pay the disputed amount.
This letter must be sent within 10 days of receiving the determination letter from the credit card company.
8. Understand the rights of the credit card company. If you do not pay the disputed amount after the credit card company denies your billing error claim, the company may initiate collection proceedings and report your account as delinquent. When the credit card company takes these actions, it must state that you are disputing the charge.
On the other hand, the credit card company may work with you and refrain from initiating collection proceedings until your dispute has been thoroughly investigated. The manner in which this matter is handled will be determined by your relationship with the company.
In many cases, especially when the disputed charge is minor, it may be best to pay the charge and later dispute it with the seller or credit card company. This will help you avoid collection proceedings and maintain a good credit score.
Part 3 Withholding Payment
1. First, try to settle the dispute. If you accepted the item or service that resulted in a possible billing error, your primary tool will be payment withholding. For example, if you order a new dishwasher but it arrives with dents and scratches, you may be able to withhold payment. When you try to return the item, the seller refuses to accept it. In another case, if you purchased something online but did not receive it within a reasonable amount of time, you may be able to withhold payment. Nobody answers or returns your calls when you call the company to request a refund.
Before you can withhold payment, however, you must first make a good faith effort to resolve the dispute with the seller (not the credit card company). Try calling the seller and writing a letter expressing your dissatisfaction. If, despite these efforts, you still do not receive a satisfactory resolution, you may be able to withhold payment under federal law.
2. Understand when it is appropriate to withhold payment. Only if you used your credit card in a consumer transaction can you withhold payment. As a result, the law only applies when you purchase goods or services for personal use. You will not be able to use this law if you use the card for business purposes. Furthermore, you may withhold payment only if you have a genuine claim or defence to payment. Furthermore, when you withhold payment, you can only withhold the amount in dispute. Your remaining payments must be made in full and on time. Finally, you can withhold only payments that have not yet been made. You will lose your right to withhold payment as soon as you pay the credit card bill.
3. Notify the credit card company of your deduction. If you want to withhold payment, contact your credit card company as soon as possible. Inform them that, in accordance with federal law, you wish to withhold a specific payment. It is critical to make this request in writing so that you have documentation of the correspondence. You should send a copy of this notice to the seller with whom you are disputing in addition to the credit card company. The following information should be included in your letter:
Your credit card number.
The name of the seller.
The date of your purchase.
The amount that you paid.
A brief explanation of why you are withholding payment.
The address where you are mailing the letter.
The date of the mailing.
4. Ascertain that the credit card company responds correctly. Your credit card company will either withhold payment until the dispute between you and the seller is resolved, or it will tell you that you do not have the right to withhold payment. If you properly withhold payment, the credit card company will not report payment as delinquent until the dispute is resolved.
If the credit card company tells you that you are not permitted to withhold payment, ask why. You may have to pay the bill if they can provide a good explanation. However, if you believe you are correct, you can continue to withhold payment despite the credit card company’s inquiries. The credit card company will initiate an investigation and, based on the findings, may request payment and/or initiate collection proceedings.
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