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CC Dispute- Purchase for Cancelled Trip

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Question: 
We received a complaint from an account holder who used their credit card to purchase a trip on 7/3/18 for over $2,600 from a travel company. He provided evidence to us on 8/11/18 that the travel company had closed and the trip would not be offered and there would be no refund for what he had paid. The information he was provided from the travel company said the purchase was non-refundable and he had not purchased trip cancellation protection. He filed a dispute with us on 8/11/18 asking for credit for the cost of the trip. He did not make any payments on the account between 7/3/18 and 8/11/18, so it seems to me he would have a valid claim under both Reg. Z 1026.12 and 1026.13 (since he didn't/isn't going to receive the services he paid for and he filed his dispute within 60 days of the date of the statement the charge appeared on and he had not paid for the charge before he filed his dispute. Our bank's disputes department declined his claim, so he filed subsequent disputes, but was told each time that he was not entitled to a credit. I work in Complaints, which is where this claim has now landed, and I believe we need to credit him for the purchase. Is my thinking correct?
Answer: 

.13(a)(3) would seem to be applicable as the merchant has "taken the money and ran." Generally "nonrefundable" means if the consumer cancels the trip they are not entitled to a refund. It would be interesting to see it nonrefundable includes the merchant or travel agent running off with the money. If there is no chargeback rights at this time I would believe the bank has an obligation here and wonder what reason was used for the claim denial.

If the merchant is regulated in any way, I would also consider pursuing that.

First published on 01/26/2020

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