US Laws, Codes, Statutes & Cases

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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 15USC1666]

 
                      TITLE 15--COMMERCE AND TRADE
 
                 CHAPTER 41--CONSUMER CREDIT PROTECTION
 
              SUBCHAPTER I--CONSUMER CREDIT COST DISCLOSURE
 
                         Part D--Credit Billing
 
Sec. 1666. Correction of billing errors


(a) Written notice by obligor to creditor; time for and contents of 
        notice; procedure upon receipt of notice by creditor

    If a creditor, within sixty days after having transmitted to an 
obligor a statement of the obligor's account in connection with an 
extension of consumer credit, receives at the address disclosed under 
section 1637(b)(10) of this title a written notice (other than notice on 
a payment stub or other payment medium supplied by the creditor if the 
creditor so stipulates with the disclosure required under section 
1637(a)(7) of this title) from the obligor in which the obligor--
        (1) sets forth or otherwise enables the creditor to identify the 
    name and account number (if any) of the obligor,
        (2) indicates the obligor's belief that the statement contains a 
    billing error and the amount of such billing error, and
        (3) sets forth the reasons for the obligor's belief (to the 
    extent applicable) that the statement contains a billing error,

the creditor shall, unless the obligor has, after giving such written 
notice and before the expiration of the time limits herein specified, 
agreed that the statement was correct--
        (A) not later than thirty days after the receipt of the notice, 
    send a written acknowledgment thereof to the obligor, unless the 
    action required in subparagraph (B) is taken within such thirty-day 
    period, and
        (B) not later than two complete billing cycles of the creditor 
    (in no event later than ninety days) after the receipt of the notice 
    and prior to taking any action to collect the amount, or any part 
    thereof, indicated by the obligor under paragraph (2) either--
            (i) make appropriate corrections in the account of the 
        obligor, including the crediting of any finance charges on 
        amounts erroneously billed, and transmit to the obligor a 
        notification of such corrections and the creditor's explanation 
        of any change in the amount indicated by the obligor under 
        paragraph (2) and, if any such change is made and the obligor so 
        requests, copies of documentary evidence of the obligor's 
        indebtedness; or
            (ii) send a written explanation or clarification to the 
        obligor, after having conducted an investigation, setting forth 
        to the extent applicable the reasons why the creditor believes 
        the account of the obligor was correctly shown in the statement 
        and, upon request of the obligor, provide copies of documentary 
        evidence of the obligor's indebtedness. In the case of a billing 
        error where the obligor alleges that the creditor's billing 
        statement reflects goods not delivered to the obligor or his 
        designee in accordance with the agreement made at the time of 
        the transaction, a creditor may not construe such amount to be 
        correctly shown unless he determines that such goods were 
        actually delivered, mailed, or otherwise sent to the obligor and 
        provides the obligor with a statement of such determination.

After complying with the provisions of this subsection with respect to 
an alleged billing error, a creditor has no further responsibility under 
this section if the obligor continues to make substantially the same 
allegation with respect to such error.

(b) Billing error

    For the purpose of this section, a ``billing error'' consists of any 
of the following:
        (1) A reflection on a statement of an extension of credit which 
    was not made to the obligor or, if made, was not in the amount 
    reflected on such statement.
        (2) A reflection on a statement of an extension of credit for 
    which the obligor requests additional clarification including 
    documentary evidence thereof.
        (3) A reflection on a statement of goods or services not 
    accepted by the obligor or his designee or not delivered to the 
    obligor or his designee in accordance with the agreement made at the 
    time of a transaction.
        (4) The creditor's failure to reflect properly on a statement a 
    payment made by the obligor or a credit issued to the obligor.
        (5) A computation error or similar error of an accounting nature 
    of the creditor on a statement.
        (6) Failure to transmit the statement required under section 
    1637(b) of this title to the last address of the obligor which has 
    been disclosed to the creditor, unless that address was furnished 
    less than twenty days before the end of the billing cycle for which 
    the statement is required.
        (7) Any other error described in regulations of the Board.

(c) Action by creditor to collect amount or any part thereof regarded by 
        obligor to be a billing error

    For the purposes of this section, ``action to collect the amount, or 
any part thereof, indicated by an obligor under paragraph (2)'' does not 
include the sending of statements of account, which may include finance 
charges on amounts in dispute, to the obligor following written notice 
from the obligor as specified under subsection (a) of this section, if--
        (1) the obligor's account is not restricted or closed because of 
    the failure of the obligor to pay the amount indicated under 
    paragraph (2) of subsection (a) of this section, and
        (2) the creditor indicates the payment of such amount is not 
    required pending the creditor's compliance with this section.

Nothing in this section shall be construed to prohibit any action by a 
creditor to collect any amount which has not been indicated by the 
obligor to contain a billing error.

(d) Restricting or closing by creditor of account regarded by obligor to 
        contain a billing error

    Pursuant to regulations of the Board, a creditor operating an open 
end consumer credit plan may not, prior to the sending of the written 
explanation or clarification required under paragraph (B)(ii), restrict 
or close an account with respect to which the obligor has indicated 
pursuant to subsection (a) of this section that he believes such account 
to contain a billing error solely because of the obligor's failure to 
pay the amount indicated to be in error. Nothing in this subsection 
shall be deemed to prohibit a creditor from applying against the credit 
limit on the obligor's account the amount indicated to be in error.

(e) Effect of noncompliance with requirements by creditor

    Any creditor who fails to comply with the requirements of this 
section or section 1666a of this title forfeits any right to collect 
from the obligor the amount indicated by the obligor under paragraph (2) 
of subsection (a) of this section, and any finance charges thereon, 
except that the amount required to be forfeited under this subsection 
may not exceed $50.

(Pub. L. 90-321, title I, Sec. 161, as added Pub. L. 93-495, title III, 
Sec. 306, Oct. 28, 1974, 88 Stat. 1512; amended Pub. L. 96-221, title VI 
Secs. 613(g), 620, Mar. 31, 1980, 94 Stat. 177, 184.)


                               Amendments

    1980--Subsec. (a). Pub. L. 96-221, Sec. 613(g), substituted 
``(b)(10)'' for ``(b)(11)'' and ``(a)(7)'' for ``(a)(8)''.
    Subsec. (b)(6), (7). Pub. L. 96-221, Sec. 620(a), added par. (6) and 
redesignated former par. (6) as (7).
    Subsec. (c). Pub. L. 96-221, Sec. 620(b), inserted provisions 
respecting finance charges on amounts in dispute.


                    Effective Date of 1980 Amendment

    Amendment buy Pub. L. 96-221 effective on expiration of two years 
and six months after Mar. 31, 1980, with all regulations, forms, and 
clauses required to be prescribed to be promulgated at least one year 
prior to such effective date, and allowing any creditor to comply with 
any amendments, in accordance with the regulations, forms, and clauses 
prescribed by the Board prior to such effective date, see section 625 of 
Pub. L. 96-221, set out as a note under section 1602 of this title.


                             Effective Date

    Section 308 of title III of Pub. L. 93-495 provided that: ``This 
title [enacting this section and sections 1666a to 1666j of this title, 
amending sections 1601, 1602, 1610, 1631, 1632, and 1637 of this title, 
and enacting provision set out as a note under section 1601 of this 
title] takes effect upon the expiration of one year after the date of 
its enactment [Oct. 28, 1974].''


                               Short Title

    Title III of Pub. L. 93-495, which is classified principally to this 
part, is known as the ``Fair Credit Billing Act''. For complete 
classification of Title III to the Code, see Short Title of 1974 
Amendment note set out under section 1601 of this title and Tables.

                  Section Referred to in Other Sections

    This section is referred to in sections 1637, 1666a of this title; 
title 26 section 6311.