Future Business Leaders of America (FBLA) Business Law Practice Exam

What does the Fair Credit Billing Act require creditors to do?

1. Provide credit history updates

2. Correct billing errors reported by consumers

3. Disclose credit terms

4. Halt debt collection processes

The correct answer is: Correct billing errors reported by consumers

The Fair Credit Billing Act (FCBA) specifically mandates that creditors must investigate and correct billing errors reported by consumers. This law is designed to protect consumers from inaccuracies on their credit bills and to ensure that they have a clear process for disputing errors. When a consumer identifies a billing mistake—such as unauthorized charges, incorrect amounts, or failure to apply payments—creditors are legally obligated to respond to these disputes in a timely manner and correct any verified errors, helping to maintain consumer trust and satisfaction. This requirement is central to the FCBA's purpose, which focuses on protecting consumers' rights related to billing practices. Other options, while important aspects of credit management, do not directly fulfill the specific requirements set out by the FCBA. For example, while disclosing credit terms and providing credit history might be necessary practices for creditors, these actions are not the core responsibility defined by the Act. Similarly, halting debt collection processes is not a requirement of the FCBA, nor is there a requirement for regular credit history updates under this specific law.