The Fair Credit Billing Act is a Boon to Consumers

Credit Card companies are pests to our economy that eat our lives without our knowledge. Credit card companies are money players that twist the laws per their requirement. The Fair Credit Billing Act of 1974 came as a jolt to credit card companies. This Act came as a sign of victory for consumers who were earlier victims of credit card companies.

Before this Act came into existence, credit cards were easy targets for frauds. Fraudsters steal cards from mail boxes and innocent customers would be victims to damages. Credit Card companies would bombard customers with unsolicited cards and such cards ended in wrong hands and once again innocent consumers would pay for this. If the consumers disputed their charges, they would end being attacked by debt collectors. The credit card companies would then take it on themselves to ruin your credit rating.
Congress passed the Truth in Lending Act in 1968 to overcome all these complaints that required credit card companies to explicitly state the terms of all loans and all the associated fees and charges. Then came the FCRA in 1970 that made it possible for consumers to check their credit reports and regulated how companies collected and used this information. The Equal Credit Opportunity Act forbade screening on the basis of age, gender, religion etc but The Fair Credit Billing Act gave consumers the power to fight back.

The Fair Credit Billing Act allows consumers to dispute charges on their credit cards without harming their credit rating. Before the Fair Credit Billing Act came into existence, if a consumer withheld payment due to an unfair charge, that counted as a normal non-payment and reflected on the consumer's credit rating. Thanks to the Fair Credit Billing Act, consumers can now dispute unauthorized charges, charges for an incorrect amount or an overcharge, charges for goods or services that were never delivered or were unsatisfactory, accounting errors, bills sent to the wrong address, and any charges for which the consumer requires a formal explanation.

Apart from disputes, the Fair Credit Billing Act requires credit card statements to be sent two weeks before payment is due and allows consumers to hold the credit card company, besides the merchant who sold the goods, responsible for unsatisfactory purchases. In other words, consumers can sue the card company for the value of the merchandise if the merchant refuses a refund on valid grounds. It also prohibits merchants from giving discounts to people who pay with cash. Under the act, the credit card companies have the incentive to monitor the merchants who accept their cards and make sure those merchants are honest.