John purchased $600 worth of clothes from Clothing Mart. He paid for the clothes with a credit card. When he received his statement, he sent the credit card company a check for $600. The credit card company mistakenly recorded his payment as $60. When John received his next statement, he noticed the $540 error and contacted the credit card company. A few days later when he attempted to use his card to buy gasoline, he was told by the cashier that the card had been canceled and she was instructed to take his card. John was shocked, embarrassed, and angry. When he contacted the credit card company, it pointed out a provision in his initial contract for the card that stated the company could revoke his card privileges at any time with or without cause. What federal law applies to this particular situation?

In this example, the credit company is to be blamed for their mistake when issuing John's billing. Moreover, they are also responsible for the way in which they dealt with this dispute. The federal law that would address this matter is the Fair Credit Billing Act. This act protects consumers from unfair billing practices, including unauthorized charges and charges for unaccepted or undelivered goods and services.