If money is fraudulently taken from your credit card account, your provider is liable, right? What if the fraudster used your card’s correct Pin? Some banks think that this means you’re liable, not them.
Few things in the financial services industry can be considered holy, but Chip and Pin is about as close as you’ll get. Unless Derren Brown’s in the vicinity, your Pin is yours and yours alone, providing instant access to your funds wherever you may be.
But woe-betide he who falls foul of card fraud with a Pin. Despite the rules being crystal clear, a recent horror story of credit card fraud shows that, unfortunately, confusion still reigns. As reported in The Times, Eve Russell was stuck with a £16,000 credit card bill after someone applied for the card in her name.
Despite Barclaycard admitting that it didn’t know who had applied, that the card was sent to a different address, and that the spending was out of character, they argued that because the correct Pin was used, Eve was liable for the bill.
It took 15 months, and an appeal to the initial Financial Ombudsman ruling – which ruled in favour of Barclaycard – for the charges to be waived.
Let’s get a few things straight
However, under the Payment Services Regulations, your bank – not you – is liable for unauthorised transactions unless it can prove you authorised a payment, acted fraudulently, or because you failed to protect your Pin or password in a way that allowed the transaction to occur. That’s prove, not make an educated guess, supposition, suspicion or hint – prove.
As detailed by the Financial Services Authority, your bank cannot simply say that correct usage of your password, card and Pin proves that you actually authorised a payment. Just because your Pin was used doesn’t prove diddly. The bank has to prove you were grossly negligent or acted fraudulently.
This doesn’t mean you are free from responsibility. Writing down your Pin or sharing it with someone else is clearly not allowed, including close family.
But there are a variety of techniques used by fraudsters to get hold of your Pin that aren’t down to your personal negligence, such as pinhole cameras attached to ATMs, skimming and good old fashioned phone fraud.
At the end of the day, it’s down to staff training. We know the rules, you know the rules too, so why are bank staff unaware that they’re obliged to refund customers in cases like Eve Russell’s?
Any of us could be a victim of fraud, but you shouldn’t be out of pocket, even if the correct Pin is used.
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