William Krieger v. Bank of America NA
890 F.3d 429
3rd Cir.2018Background
- In June 2015 William Krieger discovered a $657 unauthorized Western Union charge after a remote-access tech scam; he promptly notified Bank of America (BANA).
- BANA initially agreed to investigate and issued a temporary $657 credit; Krieger received a statement reflecting that credit and believed the dispute resolved.
- In mid-September BANA notified Krieger that Western Union provided a sales slip and that the charge was valid; BANA rebilled the $657 on the September 18 statement.
- Krieger sent a detailed written dispute on September 29; BANA responded that it would not remove the charge, and Krieger paid the bill and sued.
- He sued under TILA via (1) the Fair Credit Billing Act (FCBA), alleging his written dispute was timely and BANA failed to investigate/credit, and (2) TILA’s unauthorized-use provision, alleging BANA imposed liability above the $50 statutory cap.
- The district court dismissed both claims as untimely (FCBA) and as not actionable (§1643 provides no private reimbursement remedy); the Third Circuit reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the 60-day FCBA written-notice period start if a creditor removes then later reinstates a disputed charge? | The 60-day period restarts when the consumer receives the first statement that again reflects the reinstated charge (Sept. 18). | The 60-day period runs from the first periodic statement that ever reflected the charge (July 29); Krieger’s written notice was untimely. | Court held the clock restarts when the issuer reinstates the charge and the consumer receives the first statement reflecting that reinstatement; Krieger’s notice (Sept. 29) was timely. |
| Whether §1643 (TILA unauthorized-use provision) supplies a private cause of action or relief for actual damages when an issuer rebills a consumer for an allegedly unauthorized charge above $50. | §1640 provides a private right to sue for violation of §1643; actual damages (not just reimbursement) are recoverable when issuer imposes liability in excess of the statutory limit. | §1643 does not give a cardholder a right to reimbursement and functions only as a limit on issuer recovery; liability is only imposed by litigation. | Court held §1640 authorizes suit for violations of §1643 and that billing/rebilling an account can impose “liability” under §1643 such that a consumer may seek actual damages. |
| Whether prior Third Circuit cases (Sovereign Bank, Azur) bar §1643-based claims for damages here. | Those cases addressed different contexts (issuer indemnification; apparent authority) and did not resolve a cardholder’s §1640 claim for actual damages arising from rebilling. | Reliance on those precedents to foreclose any §1643-based remedy. | Court held those precedents do not preclude a §1640 action for actual damages where an issuer rebills despite knowledge the charge may be unauthorized. |
| Proper interpretation of Regulation Z / 12 C.F.R. §1026.13(b)(1) in the remove-then-reinstate scenario | Regulation should be read in context: “periodic statement that reflects the alleged billing error” contemplates a series of recurring statements and does not preclude restarting the 60-day clock after reinstatement. | Regulation’s plain language mandates measuring 60 days from the first periodic statement that reflected the error. | Court rejected the district court’s literal reading as inapplicable to the removal-then-reinstate facts and read the regulation consistent with FCBA text and consumer-protection purpose. |
Key Cases Cited
- Am. Express Co. v. Koerner, 452 U.S. 233 (1981) (describing FCBA’s creditor obligations when consumer alleges billing error)
- Azur v. Chase Bank, USA, N.A., 601 F.3d 212 (3d Cir. 2010) (holding §1643 does not provide a right to reimbursement in the context addressed there)
- Sovereign Bank v. BJ’s Wholesale Club, Inc., 533 F.3d 162 (3d Cir. 2008) (interpreting §1643 as not addressing issuer’s liability to others)
- Rossman v. Fleet Bank (R.I.) Nat’l Ass’n, 280 F.3d 384 (3d Cir. 2002) (TILA/Regulation Z should be viewed from the reasonable consumer’s perspective)
- Vallies v. Sky Bank, 591 F.3d 152 (3d Cir. 2009) (TILA remedies and meaning of actual damages under §1640)
- Mourning v. Family Publ’ns Serv., Inc., 411 U.S. 356 (1973) (TILA’s consumer-protection purpose and disclosure focus)