§ 703. Notice of error and response. If a creditor, having transmitted
to a consumer a statement of the consumer's account, receives from the
consumer at an address designated therefor by the creditor in accordance
with section seven hundred five of this article, within sixty days of
the mailing of said statement, a written notice, on a document other
than a document provided by the creditor to accompany payment, setting
forth sufficient information to enable the creditor to identify the
consumer and the account, the amount and transaction shown in the
statement which the consumer in good faith believes to be a billing
error, and the facts providing the basis for the consumer's belief that
the statement is in error; the creditor shall:

1. Not later than thirty days after receipt of the notice, mail a
written acknowledgment to the consumer; and

2. Not later than ninety days after receipt of the notice and prior to
taking any action to collect the amount believed by the consumer to be a
billing error, (a) make appropriate corrections in the account of the
consumer and mail to the consumer a written notice stating that the
amount believed to be in error has been corrected and will be shown on
the next statement mailed to the consumer or (b) send a written notice
to the consumer setting forth the reasons why the creditor believes the
account of the consumer was correctly shown in the statement; and

3. Not communicate unfavorable credit information concerning the
consumer to any person, including but not limited to credit bureaus or
credit reporting agencies, based upon the consumer's failure to pay the
amount believed by him to be a billing error, until the creditor has
complied with this section.