Fair Credit Billing Act

The FCBA 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. Consumers often buy cars, furniture and major appliances on an installment basis, and repay personal loans in installments as well.

What types of disputes are covered?

The FCBA settlement procedures apply only to disputes about "billing errors." For example:

• unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50;
• charges that list the wrong date or amount;
• charges for goods and services you didn't accept or weren't delivered as agreed;
• math errors;
• failure to post payments and other credits, such as returns;
• failure to send bills to your current address - provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and
• charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.

To take advantage of the law's consumer protections, you must:

• write to the creditor at the address given for "billing inquiries," not the address for sending your payments, and include your name, address, account number and a description of the billing error.
• send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you.

Send your letter by certified mail, return receipt requested, so you have proof of what the creditor received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.

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 receiving your letter.

The Fair Credit Billing Act establishes procedures for resolving billing errors on your credit card accounts, including fraudulent charges on your accounts. The law also limits your liability for unauthorized credit card charges to $50 per card. To take advantage of the law's consumer protections, you must:

• write to the creditor at the address given for "billing inquiries," NOT the address for sending your payments. Include your name, address, account number, and a description of the billing error, including the amount and date of the error. See Sample Letter.
• send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you. If an identity thief changed the address on your account and you didn't receive the bill, your dispute letter still must reach the creditor within 60 days of when the creditor would have mailed the bill. This is one reason it's essential to keep track of your billing statements, and follow up quickly if your bills don't arrive on time.

You should send your letter by certified mail, and request a return receipt. It becomes your proof of the date the creditor received the letter. Include copies (NOT originals) of your police report or other documents that support your position. Keep a copy of your dispute letter.

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 receiving your letter.

For more information, see Fair Credit Billing and Avoiding Credit and Charge Card Fraud, two publications from the FTC.

Your credit score can determine whether or not you get a car loan, get approved for a new apartment lease, or even find a job. Your credit score is based on your credit history. The score, usually a number between 350 and 850, represents how reliable you are as a debtor, and is used whenever you apply for credit.

Knowing the five factors that go into your credit score can help you understand how this score works, why it is important, and how to make it better.

5 Credit Score Factors you need to know about

1. Credit Payments History: Making up 35 percent of your credit score, your history of making payments is the single most important factor. Whenever you make a payment on time, your score gets better. Whenever you miss a payment, it gets worse. Having a long history of steady, regular payments is bound to help your credit score and make your life a lot easier. In other words, make your payments. It is the single easiest way to get a better credit score.

2. Amounts Owed: How much money you owe is the second most important factor, accounting for 30 percent of your score. Having credit cards that are maxed out, for example, will hurt your score. On the other hand, carrying a card balance that's less than between 30 and 35 percent of the card's limit generally increases your score. Keeping the amount of credit you carry relatively low is very important. Not only does it allow you to make payments on time, but it will directly affect your credit score for the better.

3. Length of Credit History: Making up 15 percent of your score, the amount of time you've had a particular kind of credit is the third most important factor. Having the same credit card for many years, for example, will give your score a little bump, while having a bunch of new kinds of credit will lower it.

4. New Credit: The number of new credit lines you have, or have applied for, accounts for 10 percent of your score. Opening several new credit lines at once is not a good thing for your score, while getting a new form of credit every so often can be a benefit.

5. Types of Credit: The final 10 percent of your score is based on the kinds of credit you have. Having only credit cards is not good, while having a few cards, a home loan, a car payment and maybe a personal loan is a good mix.

Mortgage Servicing: Making Sure Your Payments Count

When you apply for a home mortgage, you may think that the lender will hold and service your loan until you pay it off or you sell your house. That's often not the case. In today's market, loans and the rights to service them often are bought and sold.

A home is usually your biggest asset and biggest debt and that's why it's so important to know who is handling your payments, how they are handling them and how to track your payments to ensure they are applied accurately!

Mortgage Servicers: Their Responsibilities to You

A mortgage servicer is responsible for collecting your monthly loan payments and crediting your account. A servicer also handles your escrow account, if you have one.

The Real Estate Settlement Procedures Act (RESPA), enforced by the Department of Housing and Urban Development, is the major law covering escrow accounts. If your mortgage servicer administers an escrow account for you, the servicer is generally required to make escrow payments for taxes, insurance, and any other charges in a timely manner. Within 45 days of establishing the account, the servicer must give you a statement that clearly itemizes the estimated taxes, insurance premiums, and other anticipated charges to be paid over the next 12 months, and the expected dates and totals of those payments.

What happens when Fraud Occurs? People lose their homes...

Watch the below video of a former EMC employee sharing the inside story; why so many people can't get their loan out of default and why some people lost homes even though they had the money to pay off their note.

Investigative studies, insiders and victims have pointed out that mortgage servicing companies make MORE money when they keep your loan in default.

ALSO read various consumer stories and articles: Mortgage Servicing Blogs

"...The media has failed to tell the full story" says Danny Schechter, producer and director of In Debt We Trust and the 'News Dissector" from mediachannel.org. See: Bringing the Wall Street Crisis to Main Street!

Professor Katherine Porter described many of the same disturbing findings in her recent study: "Misbehavoir and Mistakes..." Katie was a guest on SpotLight and during that interview we discussed her remarkable findings that point out how the mortgage servicing industry has zero regulations. In fact, the system currently in place for servicing companies is set up in such a way that it actually gives servicing companies an incentive not to communicate with the borrower and then make more money by collecting late fees and penalties-much like this insider's story. 

Katherine Porter's Interview on SpotLight