Summary:
The court reviewed Bank of America’s motion to dismiss claims made by Plaintiff D’Voreaux Cann, who alleged violations of the Truth in Lending Act (TILA) and Fair Credit Billing Act (FCBA). Cann claimed the bank failed to provide accurate disclosures, closed his account without notice, and did not adequately respond to a billing dispute. However, the court found Cann’s complaint lacked a specific billing error as required by the FCBA. Cann’s blanket assertion that all past, present, and future statements were billing errors did not meet the statutory requirements for notice, and thus, did not trigger any obligation on the bank's part. Consequently, the court recommended granting Bank of America’s motion to dismiss.
Commentary:
The Fair Credit Billing Act (FCBA) covers billing errors for open-end credit accounts, like credit cards, charge accounts, and home equity lines of credit (HELOC). The FCBA does not cover closed-end credit, such as student loans, auto loans, mortgages, and home equity loans.
The FCBA protects consumers from unfair billing practices, including:
- Unauthorized charges
- Charges with an incorrect amount or date
- Calculation errors
- Charges for goods or services that weren't delivered
- Statements mailed to the wrong address
The consumer must include in their letter their name, account number, and a clear description of the disputed charge and why they're disputing it. A sample dispute letter from the Federal Trade Commission (FTC) can be found here:
Sample Letter for Disputing Credit and Debit Card Charges
The FCBA then requires creditors to acknowledge receipt of the complaint within 30 days and investigate the dispute within two billing cycles. Failure by the creditor to comply can result in actual damages, statutory damages of up to $5,000, attorney's fees and twice the finance charge due to any billing error.
Just as Requests for Information under the Real Estate Settlement Procedures Act (RESPA) often are the first step in mortgage disputes in bankruptcy, sending an FCBA dispute letter could be a preliminary step taken before an objection to a Proof of Claim filed by a credit card lender (or its agents and successors), potentially leading to damages and shifting of attorney's fees.
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