Protections offered by the FCBA

The Fair Credit Billing Act (FCBA) offers a variety of protections in connection with credit accounts. It is important to note that this act applies only to revolving credit accounts. These are accounts like department store accounts, credit cards and overdraft checking. It is important to realize that installment credit accounts, like car loans and student loans, are not covered by the FCBA.

Here are some of the things that the Fair Credit Billing Act does for you:

• Protects you against liability for electronic fund transfers or charges that you do not authorize.
• Protects you against fees and liability for charges and fund transfers that list incorrect information or that are incorrectly identified.
• Releases you from liability with regard to payments and credits that are incorrectly recorded.
• Keeps you from being held responsible for computation errors.
• Requires that you not be held accountable for late payments that come as a result of your statement going to an old address. However, you must notify the creditor of your new address – in writing – at least 20 days before the end of the billing period for this protection to be in effect.
• Creditors must provide you with explanations and documentation of mistakes made and warn you of possible errors.

Identity fraud and FCBA

One of the main points of the Fair Credit Billing Act is to protect you from identity fraud. The FCBA insists that you not be held liable for charges made with your account if you have not authorized them. However, you are required to take some action on your own if you want to be cleared of liability beyond $50.

First of all, it is important to report false charges to the company, the credit bureaus and the local law enforcement authorities. You must do this as soon as possible. In cases of someone opening a new account in your name, checking your credit report regularly can help you catch these types of problems and address them. If you want to catch individual charges that may have been made fraudulently, it is important that you check your statements every month.

You can also have a fraud alert placed on your credit report, and go about closing the accounts that have been breached. It is important to take action in order to avoid liability for charges made by someone posing as you.

It is a good idea to know your rights and understand what you need to do in order to comply with the Fair Credit Billing Act. You can get more information, as well as helpful consumer protection tips, by visiting the Federal Trade Commission Web site at www.ftc.gov.