What is the purpose of the Fair Credit Billing Act?

The Fair Credit Billing Act (FCBA) is primarily designed to protect consumers against unfair practices by credit issuers. This legislation gives consumers the right to dispute charges on their credit accounts and establishes procedures that creditors must follow to resolve such disputes. It aims to ensure that consumers are not held liable for unauthorized charges or billing errors.

For example, if a consumer notices a mistake on their billing statement, they can formally dispute the charge, and the creditor is required to investigate and respond accordingly. This fosters transparency and accountability among credit issuers, ultimately enhancing consumer trust and fostering fair billing practices. By focusing on the rights of consumers and the responsibilities of creditors, the FCBA plays a crucial role in financial consumer protection.

Other options, while related to financial matters, do not align with the core purpose of the FCBA; improving credit scores, providing loans, or regulating bank fees fall outside its scope.