15 U.S.C. § 1666 — Correction of billing errors

Page 1539 TITLE 15—COMMERCE AND TRADE § 1666 1740; amended Pub. L. 111–203, title X, § 1100A(2), July 21, 2010, 124 Stat. 2107.) Editorial Notes AMENDMENTS 2010—Subsecs. (b) to (e). Pub. L. 111–203, § 1100A(2), which directed amendment of this section by sub- stituting ‘‘Bureau’’ for ‘‘Board’’ wherever appearing, was executed by making the substitution for ‘‘Board’’ the first time appearing in subsecs. (b) and (e), and wherever appearing in subsecs. (c) and (d), to reflect the probable intent of Congress. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. EFFECTIVE DATE Section effective 9 months after May 22, 2009, except as otherwise specifically provided, see section 3 of Pub. L. 111–24, set out as an Effective Date of 2009 Amend- ment note under section 1602 of this title. § 1665e. Consideration of ability to repay A card issuer may not open any credit card ac- count for any consumer under an open end con- sumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the ability of the consumer to make the required payments under the terms of such account. (Pub. L. 90–321, title I, § 150, as added Pub. L. 111–24, title I, § 109(a), May 22, 2009, 123 Stat. 1743.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective 9 months after May 22, 2009, except as otherwise specifically provided, see section 3 of Pub. L. 111–24, set out as an Effective Date of 2009 Amend- ment note under section 1602 of this title. PART D—CREDIT BILLING § 1666. Correction of billing errors (a) Written notice by obligor to creditor; time for and contents of notice; procedure upon re- ceipt of notice by creditor If a creditor, within sixty days after having transmitted to an obligor a statement of the ob- ligor’s account in connection with an extension of consumer credit, receives at the address dis- closed 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 obli- gor— (1) sets forth or otherwise enables the cred- itor 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 be- lief (to the extent applicable) that the state- ment contains a billing error, the creditor shall, unless the obligor has, after giving such written notice and before the expira- tion of the time limits herein specified, agreed that the statement was correct— (A) not later than thirty days after the re- ceipt of the notice, send a written acknowledg- ment 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 cy- cles 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 ac- count of the obligor, including the crediting of any finance charges on amounts erro- neously 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 para- graph (2) and, if any such change is made and the obligor so requests, copies of docu- mentary evidence of the obligor’s indebted- ness; or (ii) send a written explanation or clarifica- tion to the obligor, after having conducted an investigation, setting forth to the extent applicable the reasons why the creditor be- lieves the account of the obligor was cor- rectly shown in the statement and, upon re- quest of the obligor, provide copies of docu- mentary evidence of the obligor’s indebted- ness. 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 sub- section 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 exten- sion of credit which was not made to the obli- gor or, if made, was not in the amount re- flected on such statement. (2) A reflection on a statement of an exten- sion of credit for which the obligor requests additional clarification including documen- tary evidence thereof. (3) A reflection on a statement of goods or services not accepted by the obligor or his des- ignee or not delivered to the obligor or his des- ignee 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. Page 1540 TITLE 15—COMMERCE AND TRADE § 1666a (5) A computation error or similar error of an accounting nature of the creditor on a statement. (6) Failure to transmit the statement re- quired under section 1637(b) of this title to the last address of the obligor which has been dis- closed 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 Bureau. (c) Action by creditor to collect amount or any part thereof regarded by obligor to be a bill- ing error For the purposes of this section, ‘‘action to collect the amount, or any part thereof, indi- cated by an obligor under paragraph (2)’’ does not include the sending of statements of ac- count, which may include finance charges on amounts in dispute, to the obligor following written notice from the obligor as specified under subsection (a), 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), and (2) the creditor indicates the payment of such amount is not required pending the credi- tor’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 ob- ligor 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 Bureau, a cred- itor operating an open end consumer credit plan may not, prior to the sending of the written ex- planation or clarification required under para- graph (B)(ii), restrict or close an account with respect to which the obligor has indicated pur- suant to subsection (a) that he believes such ac- count to contain a billing error solely because of the obligor’s failure to pay the amount indi- cated to be in error. Nothing in this subsection shall be deemed to prohibit a creditor from ap- plying 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 re- quirements 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 sec- tion, 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, § 161, as added Pub. L. 93–495, title III, § 306, Oct. 28, 1974, 88 Stat. 1512; amended Pub. L. 96–221, title VI §§ 613(g), 620, Mar. 31, 1980, 94 Stat. 177, 184; Pub. L. 111–203, title X, §§ 1087, 1100A(2), July 21, 2010, 124 Stat. 2086, 2107.) Editorial Notes CODIFICATION Pub L. 111–203, § 1100A(2), which directed the substi- tution of ‘‘Bureau’’ for ‘‘Board’’ wherever appearing in title I of Pub. L. 90–321, was executed to this section, which is section 161 of title I of Pub. L. 90–321. Section 1087 of Pub. L. 111–203, which directed the making of an identical amendment in title III of Pub. L. 93–495, which added this section to title I of Pub. L. 90–321, has not been executed. AMENDMENTS 2010—Subsecs. (b)(7), (d). Pub. L. 111–203, § 1100A(2), substituted ‘‘Bureau’’ for ‘‘Board’’. See Codification note above. 1980—Subsec. (a). Pub. L. 96–221, § 613(g), substituted ‘‘(b)(10)’’ for ‘‘(b)(11)’’ and ‘‘(a)(7)’’ for ‘‘(a)(8)’’. Subsec. (b)(6), (7). Pub. L. 96–221, § 620(a), added par. (6) and redesignated former par. (6) as (7). Subsec. (c). Pub. L. 96–221, § 620(b), inserted provisions respecting finance charges on amounts in dispute. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by 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 pre- scribed to be promulgated at least one year prior to such effective date, and allowing any creditor to com- ply with any amendments, in accordance with the regu- lations, 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 Pub. L. 93–495, title III, § 308, Oct. 28, 1974, 88 Stat. 1517, provided that: ‘‘This title [enacting this section and sections 1666a to 1666j of this title, amending sec- tions 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 prin- cipally to this part, is known as the ‘‘Fair Credit Bill- ing 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. § 1666a. Regulation of credit reports (a) Reports by creditor on obligor’s failure to pay amount regarded as billing error After receiving a notice from an obligor as provided in section 1666(a) of this title, a cred- itor or his agent may not directly or indirectly threaten to report to any person adversely on the obligor’s credit rating or credit standing be- cause of the obligor’s failure to pay the amount indicated by the obligor under section 1666(a)(2) of this title, and such amount may not be re- ported as delinquent to any third party until the creditor has met the requirements of section 1666 of this title and has allowed the obligor the same number of days (not less than ten) there- after to make payment as is provided under the credit agreement with the obligor for the pay- ment of undisputed amounts.