## Facts

- Peter Belmont, a New York attorney proceeding pro se, had co-signed a MasterCard account with his son in 1987; the account was later owned by Associates National Bank (Delaware).
- Belmont sent a 1992 letter attempting to revoke his co-signer status and enclosed a check for the outstanding balance; the bank denied receiving the letter.
- After Belmont’s son filed for bankruptcy, the bank treated Belmont as the liable cardholder and sent him a May 5, 1998 statement seeking payment on an approximately $1,895 balance.
- Within 60 days, Belmont sent a detailed written dispute (received May 19, 1998) asserting he had no contractual obligation on the account and requesting proof (including the signed application).
- The bank responded on July 20, 1998 (62 days after receipt), asserted Belmont’s liability, refused to provide the application, and threatened negative credit reporting if payment was not made.
- Belmont’s credit report later reflected the account as delinquent.
- Belmont sued under TILA and Regulation Z for failure to follow billing-error procedures and for adverse credit reporting while the dispute was pending; both sides moved for summary judgment.

## Issues

1. Whether a claim that the consumer is not an obligor at all (a “wrong-person” dispute) qualifies as a “billing error” under 15 U.S.C. § 1666(b).
2. Whether Belmont’s letter satisfied TILA’s requirements for a timely “notice of billing error” under § 1666(a).
3. Whether the bank violated § 1666 and Regulation Z by failing to properly investigate and respond and by threatening or making adverse credit reports while the dispute remained unresolved.

## Decision

- The court held that a “wrong-person” dispute is a “billing error” within § 1666(b)(1) and (2).
- The court held Belmont’s dispute letter satisfied § 1666(a)’s notice requirements.
- The court found the bank failed to comply with TILA’s billing-error resolution duties, including providing an adequate response based on a reasonable investigation.
- The court held the bank violated § 1666(a)(3) and Regulation Z by threatening, and then reporting, delinquency while the dispute was pending.
- The court denied the bank’s motion to dismiss or for summary judgment and granted Belmont summary judgment in substantial part, awarding statutory relief and limiting collection of a portion of the disputed amount (including the first $50).

## Legal Principles

- A “billing error” under 15 U.S.C. § 1666(b) includes a statement reflecting an extension of credit not made to the obligor and can include a dispute over whether the billed person is an obligor at all.
- TILA’s billing-error protections apply to persons the creditor claims are obligors when they timely and adequately dispute liability.
- A valid billing-error notice must be written, timely (within 60 days of the statement), and identify the account and the nature of the asserted error.
- Upon receipt of a valid notice, the creditor must follow § 1666’s acknowledgment, investigation, and correction/explanation requirements within the statutory time limits.
- While a properly raised billing error remains unresolved under TILA’s procedures, the creditor may not treat the amount as delinquent for credit-reporting purposes, including by threatening or making adverse reports.

## Conclusion

The court treated Belmont’s denial of any contractual liability as a cognizable TILA billing error, required the bank to follow § 1666’s dispute-resolution process, and held the bank liable for failing to reasonably investigate and for threatening and reporting delinquency before completing the required procedures.


Belmont v. Associates Nat'l Bank (Del.), 119 F. Supp. 2d 149 (E.D.N.Y. 2000)