By Jane M. Winand, Legal Assistance Attorney
Shopping online, by phone or mail is very convenient and popular.
Be advised, however, that federal laws and regulations protect your rights.
The Federal Trade Commission Mail, Internet or Telephone Order Merchandise Rule, 16 Code of Federal Regulations Part 435 requires sellers — who solicit buyers to order merchandise via the internet, by phone or through the mail — to ship the ordered items within the advertised time frame.
If no time frame is specified, shipment must occur within 30 days. This rule also requires that if the seller cannot ship within the promised time, the seller must either obtain the buyer’s consent to a delay in shipping or refund all payments made for unshipped merchandise.
Using your credit card for purchases made on the Internet, via phone or by mail will also give you protection under the Fair Credit Billing Act. The FCBA applies to “open end” credit accounts such as credit cards and revolving charge accounts like department store accounts.
Installment contracts such as loans or extensions of credit that you repay on a fixed schedule are not covered under the FCBA. Examples of such installment contracts are loans used to purchase cars, furniture and major appliances.
If you find a billing error on your monthly credit card statement, in accordance with the FCBA you may dispute the charge and withhold payment on the disputed amount during the dispute period.
If you decide to dispute the charge, follow the steps below. You still must pay for any part of the bill that is not disputed, including finance charges on the undisputed amount.
To be protected by the FCBA, you must:
- Write to the creditor at the special address indicated on the monthly statement for “billing inquiries” and not the address to which you send your payment.
- Include in the written notice your name, address and credit card number as well as a description of the billing error and copies of any relevant documentation.
- The written notice must reach the creditor within 60 days after the first bill containing the error was mailed to you.
- Send the written notice by certified mail with return receipt requested to document the creditor’s receipt of your notice. Keep a copy of the letter for your records.
The creditor must acknowledge your complaint, in writing, within 30 days after receiving it, unless the problem has been resolved.
The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after getting your letter.
While the creditor is investigating the matter, the creditor may not take any legal or other action to collect the disputed amount and finance charges. Although your account can’t be closed or restricted during the investigation, the disputed amount can be applied against your credit limit.
The creditor may not threaten your credit rating, report you as delinquent or accelerate your debt because you have disputed a charge. Furthermore, creditors may not discriminate against credit applicants who exercise their rights in good faith under the FCBA.
If it is determined at the conclusion of the creditor’s investigation that the charge on your bill is a mistake, the creditor must explain to you in a written notice the corrections that will be made to your account.
The creditor must credit your account for the erroneous charge and remove all finance charges, late fees and other charges related to the error.
If the creditor determines that some or all of the charge are correct, you must receive a written notice from the creditor explaining the finding. You may request copies of documents proving that you owe the money. At this point, you owe the disputed amount, plus any finance charges that accumulated while the investigation was ongoing.
If you disagree with the findings of the creditor’s investigation, you should write the creditor within 10 days after receiving the notice and inform the creditor that you refuse to pay the disputed amount. The creditor may begin collection procedures.
However, when reporting your delinquent account to a credit reporting agency, the creditor must state that you do not think that you owe the money. The creditor must also inform you who will be provided with this credit information.
Finally, the creditor must promptly report any subsequent resolution of the reported delinquency to every recipient of your credit information.
If a creditor fails to follow the procedures in the FCBA, such as failing to acknowledge your complaint within the required 30 days, or failing to resolve the dispute within the mandated two billing cycles, the creditor is barred from collecting the amount in dispute or any related finance charges, up to $50, even if the bill as originally issued is correct.
This same penalty applies if the creditor threatens to report, or improperly reports, your failure to pay during the dispute period.
If you have questions about a purchase made through the internet, by mail or phone, you may contact the Fort Meade Legal Assistance Division. To schedule an appointment, call the Legal Assistance Division at 301-677-9504 or 301-677-9536.
The office is located at 4217 Morrison St., first floor, Office of the Staff Judge Advocate.