The Fair Credit Billing Act

Under consumer protection and fraud laws, consumer fraud refers to a specific type of criminal fraud. The victim is a consumer, while the perpetrator is either a seller or advertiser of merchandise. Generally speaking, so long as the fraud involves some services or goods, it could be considered consumer fraud.

Consumer fraud encompasses a wide range of activities. Here are a few examples of more common scams:

• Sellers not providing merchandise in an adequate fashion, such as a car dealer selling lemon cars;
• Sending merchandise to people without their knowledge and then forcing them to pay for it by threatening legal action or ruining their credit ratings;
• Sweepstakes and lotteries in the form of offering you a prize if you pay a “fee” and then fail to deliver the prize; and
• Charities only pretending to be working for a good cause ask you for a donation.

Some specific types of consumer fraud include:

• False Advertising: False advertising refers to intentionally misleading a consumer about some aspect of a product. This factor was instrumental in the consumer’s decision to buy the product;
• Bait and Switch: Bait and switch is the process of luring the consumer in with an unbeatable deal that is no longer available. Then, only different products are offered; and
• Pyramid Schemes: Pyramid schemes refer to any sort of promotion or unrealistic return when the only money made is the return on the funds of people newly recruited to the system. Pyramid schemes may also be referred to as multi-level marketing, or MLM.

There are many ways in which a person can become a victim of specific consumer fraud scams.

Consumer fraud scams include:

• Credit Card Scams;
• Sweepstakes Scams;
• Cell Phone Scams;
• Fraudulent Telemarketing; and
• Mail Order Fraud.

What Is the Process for Filing a Consumer Fraud Complaint? What Are Some Additional Consumer Rights?

Consumer protection laws protect consumers’ rights and allow them to file complaints about consumer fraud. It is helpful to understand what rights consumers have before discussing how to file a consumer fraud complaint.

The Federal Trade and Commissions Act (“FTCA”) outlines industry standards for businesses. Essentially, the Act prevents businesses from making statements that could be misleading or confusing to the average consumer. Another consumer protection law would be the Fair Packaging and Labeling Act, which regulates information on retail product packages.

Some examples of other issues that consumer protection laws may cover include:

• False advertising and false business claims, as previously mentioned;
• Breaches of consumer contracts;
• Health and safety codes; and
• Dangerous products and product liability issues.

It is not uncommon for consumer claims to involve a violation of more than one consumer protection law.

Some examples of additional consumer rights include:

• Cooling Off Period: Most states give consumers until midnight on the third business day after the product or service was purchased to cancel the contract, for whatever reason. Consumers have the right to change their minds during the cooling-off period if they purchased without much consideration;
• Shipping Requirements: If a consumer orders something to be shipped, the seller must ship to the consumer in the amount of time stated. Consumers must be notified if the seller cannot ship the items within specified timeframes and given the option to cancel, accept a refund, or accept a new delivery date if the seller cannot meet the delivery deadline;
• Used Car Rule: A dealer must post a buyer’s guide on each vehicle according to the used car rule. The purpose of this guide is to provide consumers with warranty information and other important information about the vehicle so they can make an informed purchase decision; and
• Mail Fraud Schemes: Companies are prohibited from sending consumers an item in the mail that they did not order and then expect the consumer to pay for it.

Consumer fraud protection includes filing a complaint. You must first contact the business that sold the item or performed the service to resolve your issue. Keep a record of all communications related to your case to assist your case. Your next step will be to write a letter of complaint to the business and forward a copy to your local Consumer Protection Agency if the business does not respond.

Alternatively, you can forward a copy to the Better Business Bureau. If no action is taken by any of the parties you have contacted, you may consider hiring an attorney to represent you.

What Is the Role of the Consumer Protection Agency?

As was just mentioned, part of filing a consumer fraud complaint involves the Consumer Protection Agency (“CPA”). In a nutshell, the CPA regulates the consumer industry. Here are some examples of what the Consumer Protection Agency does:

• License and regulate professionals;
• Conduct investigations into consumer and financial scams; and
• Criminally prosecute those scammers who are found to be guilty.

In addition, the CPA can assist injured parties in bringing civil lawsuits against fraudulent businesses or professionals. The Consumer Protection Agency generally investigates fraudulent business misconduct. Upon completion of the investigation, the Agency will determine whether the business was fraudulent.

A consumer may file an individual lawsuit against the fraudulent business to recover personal losses depending on the specific circumstances. Many consumer protection laws, especially state laws, as opposed to federal laws, encourage consumers to report any cases of consumer fraud or abuse.

A consumer may be asked to participate in a class action lawsuit on behalf of a class of consumers who the same company has injured. In a consumer protection lawsuit, the following issues will generally be addressed and resolved:

• Whether the law applies to the specific issue at hand;
• If the defendant actually engaged in misconduct as prohibited by the law; and
• Whether the plaintiff actually qualifies as a consumer.

In a lawsuit, consumers may be able to recover damages for injuries or lost profits caused by a violation of consumer protection laws. A judge may also issue an injunction, which instructs the defendant to cease any dangerous or illegal activities.

What Can I Do When My Credit Card Bill Is in Dispute?

The Federal Credit Billing Act (FCBA) lays out what a creditor must do when there is a dispute over a credit card bill.

The FCBA also outlines a consumer’s rights when there is a credit card billing error.

Some examples of the several errors covered by the Act include:

• Failure of the creditor to send bills to your current address
• Demands for an explanation of certain charges or written proof of purchase
• Unauthorized charges
• Math errors

The FCBA is not automatic. To take advantage of Act’s protections, the consumer must write the creditor at the address for billing inquiries within 60 days of receiving the first bill containing the error. A consumer must inform the creditor of the billing error so that the creditor can resolve the dispute fairly.

What Rights Do Consumers Have After Informing the Creditor of the Billing Error?

While the bill is in dispute, the creditor:

• May withhold payment on the disputed part of the bill. However, they may only withhold the disputed part. Additionally, the disputed amount may be applied against the credit limit.
• May not have their credit rating threatened or be reported as delinquent during the dispute.
• It cannot be denied credit in the future based on challenging a credit card bill in good faith in the past.

What Happens After an Investigation into the Billing Error?

• If There Is an Error: If the creditor finds that there was a billing error, the creditor must explain to the consumer in writing what the error was and what corrections are being made. The creditor must also remove all charges related to the error.
• If There Is Not an Error: If the creditor finds no billing error, the consumer must be informed in writing of how much is owed and why. The consumer has ten days to write to the creditor if they disagree. Creditors may report consumers as delinquent, but they must note that the consumer is disputing the charges and tell the consumer who is receiving the reports.

Should I Contact a Lawyer If My Creditor Does Not Comply with FCBA Procedures?

If your creditor does not follow the FCBA Procedures after you have informed them of a billing error, you may be able to take them to civil court. You may be entitled to damages, plus twice the amount of any finance charge if that charge is between $100 and $1,000. You should consult a financial attorney to determine what action you should take to enforce your rights under the FCBA as a consumer.