What to do about billing errors?

I-Ting Lu, MS[i]

Mary Ann Rotert

December is here and that means the holidays are upon us! Many stores are promoting great values and attractive discounts to stimulate their sales. We’ve talk about the need for consumers to be cautious in their consumer behavior and to make sure their choices are consistent with their goals. We also need to be cautious about the behavior of others. One way to do the latter is to check your credit card bill for errors during this busy buying season. If you are unlucky enough to discover billing errors on your credit card statement, don’t panic. You can correct errors before it’s too late.

First, you need to know what qualifies as a billing error and what you should do, if an error exists. The federal Fair Credit Billing Act (FCBA) was passed precisely to help protect consumers against unfair practices and errors by credit card companies. The FCBA gives specific examples of billing errors. They are:

· A charge for something you did not buy.

· A bill for an amount different from the actual amount you charged.

· A charge for something that you did not accept when it was delivered.

· A charge for something that was not delivered according to agreement.

· Math errors.

· Payments not credited to your account.

· A charge by someone who does not have permission to use your credit card.

If the error you find on your bill is one of the above, take the following steps to dispute the charge:

1. Write to the credit card company within 60 days after the statement date printed on the erroneous statement. Use the address listed on the bill for billing inquiries and tell the company the following four items:
(a) Your name
(b) Account number
(c) Clarify why you believe the bill contains an error, and the reason why it is wrong. Provide copies of supportive documentation if you have any.
(d) The date and amount of the error.

2. Be sure to pay all other parts of the bill that you do not dispute. You do not have to pay the disputed amount immediately.

3. Your account must be corrected by the credit card company, if there is an error. You will not have to pay any finance charges on the disputed amount, if you are found to be correct in your dispute.

4. If there is no error, you will receive an explanation and a statement of the amount you owe from your credit card company. Unfortunately, the amount you will owe will include any finance charges or other charges that accumulated while you were questioning the bill.

Pay attention to your bill every month and, if you find an erroneous charge to your credit card, dispute the charge. Paying money to others that you do not owe to them is not a destination on the road to financial success. Happy Holidays!

For additional information on disputing errors and your rights as a consumer, visit the Federal Trade Commission’s website at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre16.shtm.

- Robert O. Weagley, Ph.D., CFP(r)

Chair, Personal Financial Planning

University of Missouri

Columbia, MO 65211