What Is the Fair Credit Billing Act?

The Fair Credit Billing Act Explained in Less Than 4 Minutes

A confused woman wonders about a transaction she didn't make

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The Fair Credit Billing Act outlines what is considered a billing error, allows you to file disputes, and sets certain billing requirements for creditors.

Definition of the Fair Credit Billing Act

The Fair Credit Billing Act outlines what is considered a billing error, allows you to file disputes, and sets certain billing requirements for creditors. Under the FCBA, you may dispute any billing errors you find on your account statements. The bill also requires creditors to promptly respond to your dispute, and limits your responsibility for the disputed amount until an investigation has been resolved.

  • Acronym: FCBA


The Fair Credit Billing Act only applies to credit cards and revolving charge accounts like a department store account. It doesn't apply to an installment loan you may take out to buy furniture or other large purchases.

How the Fair Credit Billing Act Works for Consumers

There are several types of billing errors you may dispute as a consumer, according to the Fair Credit Billing Act. These can include:

  • Unauthorized charges: These are charges you never made. They may occur because someone stole your credit card. Under the FCBA, your total liability for unauthorized charges is limited to $50; however, many credit card issuers offer zero liability protection on all fraudulent charges, which means you’re not on the hook for any charges made by a thief, as long as you follow certain procedures.
  • Inaccurate charges: Inaccurate charges may have the wrong dates or amounts. If you spent $10 at Starbucks but your statement says you charged $25, for example, your charge is inaccurate.
  • Charges for products and services you didn’t receive: Let’s say you ordered a pair of boots from an online retailer. If you were charged but never received them, you have a dispute case.
  • Questionable charges: If you notice a charge and believe it’s an error, you can ask for written proof that you’ve made it or an explanation as to what the charge is and why you received it.

You will know if you’ve received a billing error by reviewing your billing statements on a monthly basis. You can also monitor your credit by visiting a site like AnnualCreditReport.com. You’ll be able to pull free copies of your reports from Equifax, Experian, and TransUnion (the three major credit bureaus) to look for errors or inaccuracies.


If you wish to dispute a billing error, you must send your creditor a dispute letter within 60 days of when the statement containing the charge was sent to you. It’s a good idea to do so via certified mail so you have proof it was received.

How the Fair Credit Billing Act Works for Creditors

In addition to consumer protections, the Fair Credit Billing Act imposes certain requirements on creditors. When you open an account, they must provide you with a written notice. They must also send your bill at least 21 days before your payment is due and before the expiration of an applicable grace period, and at least 14 days before your minimum payment due date.

If you have an overpayment, creditors need to credit it or give you a refund via cash, check, or money order. This holds true if your account has a negative balance for more than six months. In addition, creditors are required to apply a payment to your account the day on which it was  received.


While creditors do have the right to assign payment deadlines, no deadline can be before 5:00 p.m. on the due date of the time zone indicated on the bill.

Fair Credit Billing Act Example

Imagine you were on a beach vacation with your family. You had a great time and return home to a credit card statement full of charges you made on your trip. One of the charges is $250 to a seafood restaurant you didn’t go to.

The FCBA considers this a charge for something you didn’t receive. Therefore, you may write a letter to the creditor to dispute it. As long as you do this within 60 days, you may not be responsible for the $250 dinner you never actually received.

Key Takeaways

  • The Fair Credit Billing Act (FCBA) is a federal law that prevents unfair credit billing practices.
  • It defines billing errors and includes protections for consumers, and rules and regulations for creditors.
  • To ensure your rights are protected under the Fair Credit Billing Act, keep an eye on your account statements and regularly monitor your credit report.
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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Federal Trade Commission. "Disputing Credit Card Charges." Accessed Aug. 5, 2021.

  2. Federal Trade Commission. "Sample Letter for Disputing Credit and Debit Card Charges." Accessed Aug. 5, 2021.

  3. Federal Trade Commission. "Using a Credit Card." Accessed Aug. 5, 2021.

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