Do you understand the terms and conditions of your credit card?

We present to you a case study involving a complainant who expressed concern about fraudulent activity on his credit card and a breach of agreement for nonpayment.The Case:

In October 2013, Johnny realized that his credit card was being fraudulently used since August of that year. He reported his findings to his commercial bank. An investigation was launched and his credit card was cancelled until further notice.  Johnny assumed that he was not required to make any payments on the credit card until the investigation was completed.

Upon completion of the investigation, the bank removed the fraudulent transactions on the credit card and informed Johnny of the outstanding balance and interest owed. However, Johnny argued that the entire amount on the card should have been removed. Being dissatisfied with the outcome from the bank, Johnny visited the Office of the Financial Services Ombudsman (OFSO).

What the OFSO did:

Johnny raised his issues with the Office and we communicated with the bank indicating that a complaint was lodged against them. The Bank was given fifteen (15) working days to respond to the complaint. The bank informed the OFSO, that communication was sent to Johnny advising him that while the investigation is a lengthy process it was prudent for him to continue making payments on his credit card. The bank also indicated to him that while there may have been fraudulent transactions on the credit card, there were legitimate transactions for which he was still responsible. The bank further stated that these legitimate transactions accrued interest in accordance with the credit card agreement signed by Johnny and as such he was required to pay the outstanding sums.

The OFSO informed Johnny of the bank’s policy and the terms of the credit card agreement. Tt was not prudent for the OFSO to continue to pursue the complaint. The OFSO advised Johnny to meet with the bank to discuss a payment plan that he could afford to reduce the debt.

Lessons Learnt:

1. Reconcile your credit card transactions regularly.

2. Report any unknown activity to the credit card centre as soon as possible.

3. Continue to make payments to reduce legitimate payments on your credit card.

This case study is a typical complaint brought to our Office. It reflects misunderstandings about the terms of use of a credit card and a breakdown in communication between the bank and the consumer. A credit card is a loan facility that incurs interests if not paid in full before the due date. It is the consumer’s responsibility to ensure that the terms of use are fully understood before agreeing to this facility.

Credit card fraud occurs when your card is stolen and someone uses your personal information or PIN without your permission to make purchases in store, online, by telephone or withdraws money from an Automated Teller Machine. There are a myriad of ways your card and information can be stolen:

1. By use of card skimmers to copy your information.

2. By stealing your mail and your personal information in your statements.

3. Email scams which ask you to send personal financial information to receive a ‘prize’ or send money to a friend in distress.

We urge consumers to discuss any of the above issues with their bank representatives to obtain a better understanding of the bank’s policies and procedures regarding risk assessments for loan facilities. Ask your bank representative about the protection you have if you become a victim of fraud. If you are not satisfied with the service provided by your bank in dealing with your issue, then visit our Office where one of our Resolution Officers will be available to discuss your matter and provide guidelines for redress.

Our Office can deal with issues related to deposit and loan accounts, investment services, trust accounts and mutual funds. However, our scope does not include complaints that are related to interest rates, fees and charges, risk management policies or pricing of products or transactions that have occurred prior to January 1, 2003.

Download the booklet Dollars and Sense which gives more in depth information on credit cards and other banking transactions.


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