Question

In recording the sale of a coffee maker by credit card over the phone, a sales clerk in your company accidentally put in $1,000 instead of $100. The customer didn't realize the mistake until he received his credit card statement. He wrote to his credit card company the next week, notifying them of the error in his bill. The coffee maker works and the customer is pleased with his purchase, except for the improper charge. Under federal law, what must his credit card company do for him?

Answer 1

The credit card company must investigate the incorrect charge error when the customer disputes it as per federal law. If an error is confirmed, the transaction must be corrected and any related finance charges refunded.

Step-by-step explanation:

Under federal law, if a customer disputes a billing error on their credit card statement, the credit card company is obligated to investigate the error. In this scenario, where the sales clerk from your company accidentally charged $1,000 instead of $100 for the sale of a coffee maker, the credit card company must address the customer's notification of the error. The Fair Credit Billing Act requires the company to acknowledge the customer's complaint in writing within 30 days and conduct an investigation. If the investigation finds that an error was made, the credit card company must correct the transaction and refund any finance charges incurred due to the error. If the investigation determines that there was no error, the credit card company must provide the customer with written explanation and evidence of the charge's validity. The customer may request copies of documents used in the investigation. During the investigation, the customer does not have to pay the disputed amount.