State laws may also deal with billing disputes. Generally, if a state law on this subject conflicts with the federal statute, the federal statute will control -- but there's one exception: a state law will prevail if it gives a consumer more time to notify a creditor about a billing error. For example, as explained above, the federal law gives a consumer 60 days after receiving a bill to notify you of a billing error. If a state law gives a consumer 90 days to notify you, the consumer will be entitled to the extra 30 days.

In addition to telling you how to handle billing disputes, the Fair Credit Billing Act requires you, in periodic mailings, to tell consumers what their rights are.

3. The Equal Credit Opportunity Act

You may not discriminate against a credit applicant on the basis of race, color, religion, national origin, age, sex or marital status. The Act does leave you free to consider legitimate factors in granting credit, such as the applicant's financial status (earnings and savings) and credit record. Despite the prohibition on age discrimination, you can reject a consumer who hasn't reached the legal age for entering into contracts.

4. The Fair Credit Reporting Act

This law deals primarily with credit reports issued by credit reporting agencies. It's intended to protect consumers from having their eligibility for credit thwarted by incomplete or misleading credit report information. The law gives consumers the right to a copy of their credit reports. If they see an inaccurate item, they can ask that it be corrected or removed. If the business reporting the credit problem doesn't agree to a change or deletion or if the credit bureau refuses to make it, the consumer can add a 100-word statement to the file explaining his or her side of the story. This becomes a part of any future credit report.

5. The Fair Debt Collection Practices Act

This statute addresses abusive methods used by third-party collectors -- bill collectors you hire to collect overdue bills. Small businesses are more directly affected by state laws that apply directly to collection methods used by a creditor.