The Fair Credit Billing Act is a subset of the more extensive Truth in Lending Act, which essentially tells creditors how they should behave and provides the right to request broad amounts of information regarding billing and payment history.
The FCBA is the foundation of the highly effect credit repair tactic called the “OC validation/Investigation.” FCBA Original Creditors
The FCBA requires creditors to bill correctly and completely. While it is the FTC’s job to make sure that the statute is universally applied it can be your job to ask creditors if they complied. There is a provision in the FCBA that is often confused.
The provision basically states that an individual has 60 days to dispute an unauthorized charge. This is correct, however in the summary of the tactic, you did not request or intimate a disputed charge, you are suggesting use of other provisions of the law- the “Information Request”, and this is a broader term that is not restricted by a limited time period.
The FTC summarizes the statute's prohibitions as follows: "unauthorized charges; charges that list the wrong date or amount; charges for goods and services you didn't accept or weren't delivered as agreed; math errors; failure to post payments and other credits, such as returns; failure to send bills to your current address -- provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification."
As you read the list of requirements the FCBA, just imagine the credit repair possibilities. Consider something like this…
“In compliance with the Fair Credit Billing Act you are obligated to fulfill with my request for documentation to substantiate the reporting of my account to the major credit reporting agencies. Please provide documentation on how you charged my account, how you calculated the interest rate, as well the full accounting history of where you mailed each of my bills. If you are unable to comply, than please remove your reference to this account from every reporting agency you have reported to. Your expeditious compliance is expected.”
The above example is considered an “information request” and is something no creditor wants to mess with. Creditors are in the business of lending money and not dealing with credit reporting information. So instead of screwing around with finding all the requested information, they will often simply remove the marking.
While FCBA is intended to assist consumers with current account disputes, it is still highly effective with older derogatorys. Creditors do not like the idea that you are hinting they may have broken the law years ago. Creditors are highly motivated to avoid even the hint of a lawsuit or yet worse some public embarrassment.
When disputing with creditors you will want to ensure all the below stipulations are met, otherwise request they stop reporting the account to the credit bureaus.
- The account was created at your request.
- Every item billed to an account was billed correctly.
- Every statement was created in a timely manner.
- Every statement was sent to the correct address.
- The creditor never ignored change of address requests.
- The creditor never ignored disputed charges.
- Ignored change of address requests, or disputed charges which weren't facilitated correctly didn't contribute to negative credit reporting.
- Interest and late fees were computed in accordance with federal law.
- The creditor didn't break their contract with you in any way.
The FCBA’s main credit repair use is to allow you to request broad amounts of information from the creditor on your account history. It is not asking for verification of the account or making a claim—it is asking for a boat load of information.
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