BANK Negara should inform credit card holders that they do not have to pay more than RM250 for fraudulent transactions carried out using their lost or stolen cards if they had alerted the banks about these cards as quickly as possible.

Very often, these cardholders end up paying much more.

Credit card holders are protected under Clause 13.2 of Bank Negara’s Credit Card Guidelines: “The cardholder’s maximum liability for unauthorised transactions as a consequence of a lost or stolen credit card shall be confined to a limit specified by the issuer of credit cards, which shall not exceed RM250 provided the cardholder has not acted fraudulently or has not failed to inform the issuer of credit cards as soon as reasonably practicable after having found that his credit card is lost or stolen.”

Banks know about Clause 13.2 but have chosen to ignore it. Instead, they pursue cardholders for payment for the fraudulent transactions.

The banks tell cardholders that a clause in the credit card contracts states that all transactions carried out before the loss of the cards were reported are deemed to be carried out by them.

Many cardholders then pay up because they are unaware of the RM250 limited liability.

Bank Negara has a responsibility to ensure that this matter is widely known to cardholders.

It should, therefore, rule that:

- The RM250 maximum liability on fraudulent transactions is highlighted to cardholders in the card agreements as well as in the monthly card statements;

- Banks are not allowed to insert any clause in the card agreement that is contrary to Clause 13.2; and,

- Banks should refund all money in excess of the RM250 collected from cardholders whose cases clearly come under Clause 13.2.

Bank Negara should not have problems implementing the above suggestions because it would not have included Clause 13.2 in the guidelines unless its intention was to protect cardholders.

We trust that Bank Negara will do the needful.

Source: NST – December 24, 2007