| HOW TO CORRECT CREDIT MISTAKES
Billing Errors
Q. Why should I keep a sales receipt when I buy an item on credit?
A. One reason is so that you may return the item in case it is
defective or damaged or the wrong size or color. Another reason to keep
sales slips is to correct billing errors. Most creditors do not provide
a sales slip with the monthly statement. Under this billing procedure,
the statement usually gives only the date and amount of purchase and the
store and department from which you bought the item. Therefore, you need
to keep all sales slips, at least until you have checked them against
the monthly billing statements.
Q. Will my credit rating suffer if my bill contains an obvious
error?
A. Yes, if you don't bring the error to the attention of the
creditor. The Fair Credit Billing Act
requires credit grantors to correct errors promptly without damaging your
credit record.
Q. What exactly is a billing error?
A. The law defines a billing error as a charge:
• for something that you didn't buy, or for a purchase made by someone
not authorized to use
your account;
• that is not properly identified on your monthly statement, or
that is for an amount different
from the actual purchase price; or
• for something that you refused to accept on delivery because it
was unsatisfactory or that the
supplier did not deliver according to your agreement.
Billing errors also may include:
• errors in arithmetic;
• failure to reflect a payment that you made or other credit to
your account;
• failure to mail the billing statement to your current address
(if the credit grantor received
notice of that address at least twenty days before the end of the billing
period);
• extension of credit about which you request additional clarification.
Q. What should I do if my bill seems wrong?
A. If you think your bill is incorrect, or if you simply want
more details about it, take the
following steps:
1. Technically, you should notify your creditor of the potential billing
error in writing in
order to preserve your legal rights. However, most creditors readily handle
billing complaints
over the phone, and it is a lot faster and easier than writing a letter.
Be prepared to provide your
name, address, account number and description of the error. If you aren't
satisfied with the
results of your phone call, note the name of the person that you talked
to and send a letter to the address your credit grantor has supplied for
this purpose so that it receives the notice within sixty days after it
mailed the bill. If you don't do this, you may lose your rights under
the Fair Credit Billing Act. The sixty-day period is very important.
2. The letter should contain your name, address, and account number. State
that you
believe your bill contains an error, specify the error and why you believe
it is wrong, and include the date and the suspected amount of the error.
Q. What happens after I notify the credit grantor about the possible
billing error?
A. The law requires the credit grantor to acknowledge your letter
within thirty days. (This does
not apply if the credit grantor can fix the billing error in less time.)
The credit grantor must
correct your account within two billing periods. It should never take
longer than ninety days
from the time the credit grantor receives notice of your dispute. If the
credit grantor does not
correct the error, it must tell you why it believes the bill is not wrong.
If the credit grantor does not find an error, it must promptly send you
a statement showing
what you owe. The credit grantor may include any finance charges that
accumulated and any
minimum payments you missed while questioning the bill.
Q. Must I pay finance charges on the contested amount?
A. There are two possible outcomes. If the bill is not correct,
you do not have to pay the finance charges on the amount in dispute or
the amount that was improperly billed to your account. If you have already
paid these amounts, the credit grantor should refund them. If the bill
is correct, you must pay the amounts owed, including finance charges.
Q. While I am trying to solve a billing problem, may a credit
grantor threaten my credit rating?
A. Not because you fail to pay the disputed amount or related
finance or other charges while
you're trying to resolve a billing dispute. Once you have taken the steps
described above by
writing down your question and sending it to the credit grantor, the law
prohibits your credit
grantor from reporting the account as delinquent because of the disputed
amount or related
finance or other charges. Until the credit grantor answers your complaint,
the law forbids it from taking any action to collect the amount in dispute.
You must, however, continue paying any undisputed amounts.
Q. What happens after the credit grantor has explained that my
bill is correct?
A. Then the credit grantor may take action to collect if you
do not pay and may report you to the credit bureau as overdue on the amount
in question.
Q. What if you still disagree with the credit grantor?
A. Notify the credit grantor of your views in writing. Then,
the credit grantor must report to the
credit bureau that you have challenged the bill and give you written notice
of the name and
address of each person who has received information about your account
after the dispute arose.
When you settle the dispute, that outcome must be reported to each person
who has received
information about your account.
Q. What happens if the credit grantor does not follow all the
rules within the proper time limits?
A. The law does not permit the credit grantor to collect the
disputed amount or related finance
charges up to $50. This is true even if it is money you truly owed. In
addition, the creditor is
subject to remedies available for violating federal law.
Defective Goods or Services
Q. May the law help me if I bought a product on credit that is
defective or not provided, or if there is a billing error or if the merchant
has breached a contract with me?
A Yes, if you use a store credit card to purchase shoddy or damaged
goods or poor quality
services, the Fair Credit Billing Act may help. If you have not already
paid off the balance, it
allows you to withhold payment that is still due for the disputed transaction
when you first notify
the card issuer or merchant of your claim or defense, as long as you have
made a real attempt to solve the problem with the merchant. A "real
attempt" could be demonstrated by a letter or by notes on a phone
call to the complaint department of the retailer--a note on the date of
the call and the name of the person with whom you spoke.
You have this right even if you bought the goods or services with a bank
card such as Visa
or Master Card, or a travel or entertainment card. Thus, if you purchase
a tour or an air travel
ticket using your bank credit card, you may be in a good position to recover
the cost from the
bank that provided the credit for your purchase if the tour or airline
goes bankrupt. However,
when you use your bank credit card, the law limits your right to withhold
the payment to
purchases totaling more than fifty dollars that took place in your home
state or within one
hundred miles of your home address. These restrictions do not apply to
store credit cards.
If you refuse to pay because the goods or services were defective, the
creditor might sue
you for payment. If the court finds the goods or services to be truly
defective, you probably won't have to pay. Also, during the dispute period,
the card issuer cannot report the amount as
delinquent to a credit bureau.
Lost or Stolen Credit Cards
Q. Am I liable for all the bills that may arise if I lose my credit card
or someone steals it?
A. No, the Truth in Lending Act (TILA) limits your liability
on lost or stolen credit cards.
However, it is very important that you notify the credit-card company
as soon as you notice the
loss or theft of your card or cards. You do not have to pay any unauthorized
charge made after
you notify the company of the loss or theft of the card. Under the TILA,
the most you will have
to pay for any unauthorized charges made before that time is fifty dollars
on each card.
Q. How may I prepare for the possibility of losing a credit card
or having it stolen?
A. As noted in the earlier section on credit cards, it is a good
idea to keep a list of all your
credit cards showing their account numbers and how to notify the credit-card
issuers of
theft or loss. Since you may lose credit cards when traveling, always
take a copy of the
list with you and keep it separate from your credit cards. And be sure
to keep the list
itself in a safe place, since someone with the numbers may be able to
make purchases on
your account. Also, it is advisable to keep your social security number
separate from your
credit cards, since some issuers of credit cards use that to check the
identify of a card
user.
Preventing Credit Problems
It is a lot easier to prevent of credit problems from starting in
the first place than it is to dig your
way out once you have more debt than you can handle. Even if you do
finally pay off an
overload of debt, your credit record will be tarnished and make it
difficult to obtain low-priced
credit in future years. This section points out some warning signs
of debt overload and some
methods that you can use to attack the problem before it grows larger. |
|
