I understand that
consumers can get their credit card charges reversed under the Fair
Credit Billing Act if a travel supplier goes out of business before
services are rendered. Are corporations considered consumers under
the act? What about individuals who use corporate cards?
A: Only "natural persons" -- individuals -- are
protected by the Fair Credit Billing Act. So your corporate account
does not have any rights under the act.
This fact will probably come as a shock to many corporate travel
managers and corporate-oriented agencies that have persuaded their
clients to sign up for corporate-card programs by using the act's
protections as a lure.
I believe, and would expect, that most corporate-card issuers
nevertheless have policies that extend to corporations the same
protections that consumers automatically get under the law.
Of course, mere policies can be changed at any time. Therefore,
if a corporation is in a position to negotiate the terms of its
contract with its trav-el-and-entertainment card issuer, it should
at least try to make sure these "policies" are incorporated into
the contract as actual promises.
If any corporate card issuers routinely put the provisions of
the Fair Credit Billing Act into their corpo-rate-account
agreements voluntarily, they should certainly make this fact
a key selling point, as they effectively are offering valuable
supplier default insurance at no charge.
The corporation could not get protection by giving each
traveling employee a card, either. Another provision of the law
states that the protections of the act do not apply to "extensions
of credit primarily for business purposes."
So, under a literal reading of the law, business travel really
is never covered. In fact, I would go so far as to say that a
business traveler using his or her own personal credit card would
not be covered, either, due to the words quoted above in the
previous paragraph.
However, a quick reading of my personal cards' member agreements
shows that the card issuers do not make any such business-related
exception, so personal card holders probably can safely rely on
those agreements instead of the act when they use their cards for
business travel.
Mark Pestronk is a Fairfax, Va.-based attorney specializing
in travel law. He answers your questions in the TravelWeekly.com Legal Ease forum.
To contact Mark directly, e-mail him at [email protected].