On November 3, 2015 I published a log and referred to a former client of mine whose credit was ruined when he purchased items with his credit card and had to return them.  He contacted the credit card company by phone and asked them to rescind the charges which they neglected do.  When he subsequently refused to pay the charges the credit card company posted his account on his credit report as delinquent.  His credit was then ruined and he spent months trying to correct the problem. 

So who was at fault here?  Technically it was the credit card company.  He did contact them and instruct them to remove the charges and that did not happen.  However, he should have followed up the phone call with a written request and sent copies to the three credit bureaus. Once the bureaus received that request they would have refused to place any delinquent information on his credit report until the situation was resolved. 

This is a typical example of not knowing the law and the proper procedures for using the law to resolve any issues that may arise with your credit.  In this case it is the Fair Debt Collection Act. The Act states that you have fourteen days to dispute any debt that you do not agree with.  Once you register that dispute, the credit repositories cannot declare your account as delinquent until that dispute is resolved.

This Act can be especially in important to you if you have  recently undergone  a major medical procedure. Erroneous medical bills can be a serious problem and are so common that there are companies and web sites devoted entirely to the issue.

But there is another little known federal law that applies when you receive a bill by mistake from a revolving account such as a credit card that doesn’t belong to you.  The Fair Credit Billing Act is designed to protect you from having to pay erroneous bills you don’t owe.  The law applies to “open end” credit accounts, such as credit cards, and revolving charge accounts – such as department store accounts. It does not cover installment contracts – loans or extensions of credit you repay on a fixed schedule.

The point?? Before you become involved in a dispute with anyone who sends you an erroneous bill, medical or otherwise do your homework.  Know your rights as a debtor, the biller’s rights as a creditor and how you can get the credit bureaus involved in a process that will work in your favor.

The FTC regularly investigated bogus charges in a variety areas on behalf of people who have received invoices for products they never purchased or services they never received.  For more info see their web site at ftc.gov.

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