1. If a creditor, within 60 days after having transmitted to an obligor a statement of the obligor's account in connection
with an extension of consumer credit, receives at the address disclosed under section 8-205, subsection 2, paragraph K, a
written notice, other than notice on a payment stub or other payment medium supplied by the creditor if the creditor so stipulates
with the disclosure required under section 8-205, subsection 1, paragraph G, from the obligor in which the obligor complies
with paragraphs A, B, and C, the creditor shall, unless the obligor has, after giving such written notice and before the expiration
of the time limits herein specified, agreed that the statement was correct, comply with subsection 2.
A. The obligor sets forth or otherwise enables the creditor to identify the name and account number, if any, of the obligor. [1981, c. 243, §25 (NEW).]
B. The obligor indicates the obligor's belief that the statement contains a billing error and the amount of that billing error. [1981, c. 243, §25 (NEW).]
C. The obligor sets forth the reasons for the obligor's belief, to the extent applicable, that the statement contains a billing
error. [1981, c. 243, §25 (NEW).]
[
1981, c. 243, §25 (NEW)
.]
2. Not later than 30 days after the receipt of the notice described in subsection 1, the creditor shall:
A. Send a written acknowledgment thereof to the obligor, unless the action required in paragraph B is taken within that 30-day
period; and [1981, c. 243, §25 (NEW).]
B. Not later than 2 complete billing cycles of the creditor, in no event later than 90 days, after the receipt of the notice
and prior to taking any action to collect the amount, or any part thereof, indicated by the obligor under subsection 1, paragraph
B, either:
(i) Make appropriate corrections in the account of the obligor, including the crediting of any finance charges on amounts
erroneously billed, and transmit to the obligor a notification of such corrections and the creditor's explanation of any change
in the amount indicated by the obligor under subsection 1, paragraph B, and if any such change is made and the obligor so
requests, copies of documentary evidence of the obligor's indebtedness; or
(ii) Send a written explanation or clarification to the obligor, after having conducted an investigation, setting forth to
the extent applicable the reasons why the creditor believes that account of the obligor was correctly shown in the statement
and, upon request of the obligor, provide copies of documentary evidence of the obligor's indebtedness. In the case of a billing
error where the obligor alleges that the creditor's billing statement reflects goods not delivered to the obligor or his designee
in accordance with the agreement made at the time of the transaction, a creditor may not construe that amount to be correctly
shown unless he determines that the goods were actually delivered, mailed or otherwise sent to the obligor and provides the
obligor with a statement of that determination. [1981, c. 243, §25 (NEW).]
After complying with the provisions of subsections 1 and 2 with respect to an alleged billing error, a creditor has no further
responsibility under this section if the obligor continues to make substantially the same allegation with respect to that
error.
[
1981, c. 243, §25 (NEW)
.]
3. For the purposes of this section, a "billing error" consists of any of the following:
A. A reflection on a statement of an extension of credit which was not made to the obligor or, if made, was not in the amount
reflected on that statement; [1981, c. 243, §25 (NEW).]
B. A reflection on a statement of an extension of credit for which the obligor requests additional clarification including
documentary evidence thereof; [1981, c. 243, §25 (NEW).]
C. A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor
or his designee in accordance with the agreement made at the time of a transaction; [1981, c. 243, §25 (NEW).]
D. The creditor's failure to reflect properly on a statement a payment made by the obligor or a credit issued to the obligor; [1981, c. 243, §25 (NEW).]
E. A computation error or similar error of an accounting nature of the creditor on a statement; [1981, c. 243, §25 (NEW).]
F. Failure to transmit the statement required under section 8-205, subsection 2, to the last address of the obligor which has
been disclosed to the creditor, unless that address was furnished less than 20 days before the end of the billing cycle for
which the statement is required; and [1981, c. 243, §25 (NEW).]
G. Any other error described in regulations of the administrator. [1981, c. 243, §25 (NEW).]
[
1981, c. 243, §25 (NEW)
.]
4. For the purpose of this section, "action to collect the amount, or any part thereof, indicated by an obligor under subsection
1, paragraph B" does not include the sending of statements of account, which may include finance charges or amounts in dispute,
to the obligor following written notice from the obligor as specified under subsection 1, if:
A. The obligor's account is not restricted or closed because of the failure of the obligor to pay the amount indicated under
subsection 1, paragraph B; and [1981, c. 243, §25 (NEW).]
B. The creditor indicates the payment of that amount is not required pending the creditor's compliance with this section. Nothing
in this section shall be construed to prohibit any action by a creditor to collect any amount which has not been indicated
by the obligor to contain a billing error. [1981, c. 243, §25 (NEW).]
[
1981, c. 243, §25 (NEW)
.]
5. Pursuant to regulations of the administrator, a creditor operating an open-end consumer credit plan may not, prior to the
sending of the written explanation or clarification required under subsection 2, paragraph B, subparagraph (ii), restrict
or close an account with respect to which the obligor has indicated pursuant to subsection 1 that he believes such account
to contain a billing error solely because of the obligor's failure to pay the amount indicated to be in error. Nothing in
this subsection prohibits a creditor from applying against the credit limit on the obligor's account the amount indicated
to be in error.
[
1981, c. 243, §25 (NEW)
.]
6. Any creditor who fails to comply with the requirements of this section or section 8-402 forfeits any right to collect from
the obligor the amount indicated by the obligor under subsection 1, paragraph B, and any finance charges thereon, except that
the amount required to be forfeited under this subsection may not exceed $50.
[
1981, c. 243, §25 (NEW)
.]
SECTION HISTORY
1981, c. 243, §§25,26 (NEW).
1981, c. 551, §3 (AMD).
Data for this page extracted on 03/09/2010 04:26:27.