CFPB gives credit card issuers flexibility on billing disputes
The Consumer Financial Protection Bureau issued guidance meant to enable credit card companies to resolve billing disputes tied to businesses affected by the coronavirus pandemic.
Credit card issuers that make a good-faith effort to resolve billing disputes will not receive an enforcement action or be cited in a supervisory exam, the CFPB said Wednesday.
The agency said it wanted to inform creditors of its “flexible supervisory and enforcement approach" as many small businesses hit by the economic fallout of the virus have struggled to keep up with the volume of billing disputes brought by consumers.
Credit card issuers are typically required to acknowledge a merchant billing error notice from a consumer within 30 days. But the guidance means issuers failing to meet that deadline will not be cited by the CFPB.
Lenders generally must investigate and resolve billing errors within two billing cycles but no later than 90 days, according to Regulation Z, which implements the Truth in Lending Act.
The CFPB noted that consumers have been facing long hold times trying to reach both merchants and credit card time, some of which may be closed or operating with reduced staff.
The CFPB said merchants may be having trouble responding to creditors’ inquiries, making it hard for creditors to resolve billing disputes swiftly and accurately.