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#2228646 - 01/09/20 05:27 PM Dispute under Reg Z 1026.12 and 1026.13
vicki61956 Offline
New Poster
Joined: Nov 2019
Posts: 14
I need advice on a dispute we received. The customer purchased a non-refundable international trip with his cobrand credit card. Within a month after purchasing it, he received notice that the travel agency he purchased it from had been shut down by the government and that he would not receive the trip. He was told that he would not receive a refund from the travel agency because it was non-refundable and he had not purchased the trip cancellation insurance. The customer wrote to us well within 60 days of the statement on which the charge appeared asking for credit for services not received, and provided all the documentation showing what had occurred. He had not paid anything on it before we received his dispute. Aren't we obligated to credit his account for the cost of the trip since he is not going to receive what he purchased (through no fault of his own)? I feel like this would qualify under both Reg Z 1026.12 and 1026.13. (Please assume it meets all the regulatory limitations such as being sent to the correct address, and the distance restrictions, etc. found in Reg Z 1026.12(c)(3)).

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#2228798 - 01/10/20 08:04 PM Re: Dispute under Reg Z 1026.12 and 1026.13 vicki61956
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,278
Illinois
1026.13 (a) Definition of billing error. For purposes of this section, the term billing error means:
(3) A reflection on or with a periodic statement of an extension of credit for property or services not accepted by the consumer or the consumer's designee, or not delivered to the consumer or the consumer's designee as agreed.

The consumer never received delivery of the services (the international trip).

I agree that this is a billing error provided that the consumer submitted the claim in writing. The fact that the trip is non-refundable is a red herring. (Note if the customer's dispute was that they wanted to cancel the trip after booking and couldn't because the trip was non-refundable, that's a horse dispute of a different color!)

If possible, the Bank should file a chargeback via VISA/MC using the "Services not rendered" chargeback reason in an attempt to recover the funds from the defunct merchant (or their sponsoring bank).
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#2228927 - 01/13/20 10:58 PM Re: Dispute under Reg Z 1026.12 and 1026.13 BrianC
vicki61956 Offline
New Poster
Joined: Nov 2019
Posts: 14
Thank you so much! This is exactly what I thought and I couldn't find any reason why this wouldn't be the correct way to handle it, but for some reason, our disputes department felt differently. I need to schedule a meeting with them to find out why they don't think so. Thanks for confirming my thinking.

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