Cardholders have the right to know that whenever their lost or stolen credit cards are used by others they should (in most cases) not have to pay more than RM250. Yet oftentimes they end up paying much more.
This is because Bank Negara has not informed cardholders that they do not have to pay more than RM250 for fraudulent transactions carried out using their lost or stolen cards, when they had not acted fraudulently and had informed the banks about the lost or stolen cards as soon as possible.
This protection is given under Clause 13.2 of Bank Negara’s Credit Card Guideline (the Guideline) “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.
They will tell cardholders that a clause in the credit card contracts states that all transactions carried out before the loss of the cards are reported to the banks, are deemed to be carried out by the cardholders.
Many cardholders then pay up because they are unaware of the RM250 limited liability.
Bank Negara has a responsibility to ensure that the maximum liability of RM250 is made known to cardholders.
Bank Negara 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 which is contrary to Clause 13.2 ;
- 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 Guideline unless its intention is to protect cardholders. We trust that Bank Negara will do the needful and not let consumers down.