Written by Ng E-Jay
29 July 2009
If consumers have their credit cards stolen or used fraudulently, they may be liable for all transactions made even though they may have done nothing wrong.
This is yet another sorry example of how the Government proudly sells the image of Singapore as a world-class financial hub, yet fails to offer consumers even the most basic protection against theft and fraud.
Credit card holder Tan Shock Ling found this out the hard way when she was saddled with a $17,100 bill after having had her credit cards stolen. The banks insist that she must pay up and the Government sides with the banks. (See here and here.)
Banks in Singapore claim that this policy is stated in the fine print on the contract consumers have signed, and will at most review cases individually.
Only Maybank and American Express (Amex) have limited liabilities for lost and stolen cards, capped at $500 for Maybank and $100 for Amex. However, this is subject to the clause that the credit card holder must have “acted in good faith and exercised due diligence”. How exactly the banks determine that and whether there is any fairness or transparency in the process is anybody’s guess.
Compare the situation in Singapore to that in the United States, where the US Truth in Lending Act (also known as the Consumer Credit Protection Act) has special provisions which limit cardholders’ liability to $50 for fraudulent charges. (See here and here.)
But far from being ashamed at the gross lack of protection for credit card holders in Singapore, the authorities here have the temerity to literally ask consumers to scram if they don’t agree with the terms and conditions.
Singapore Retailers Association executive director Lau Chuen Wei was quoted by the Straits Times as advising consumers to “vote with their feet and walk away if they disagree with the terms and conditions of the issuing bank.”
Consumers Association of Singapore (CASE) president Yeo Guat Kwang agreed with this, saying: “Consumers can choose to take cards from banks that offer them terms they are satisfied with.” (ST, “Credit card stolen? Mind the pitfalls”, 28 July 2009.)
This is an absurd proposition, given that consumers here have very limited choices as every bank offers similar terms and conditions.
Apart from Maybank and American Express, all other banks in Singapore offer little or no protection to consumers against credit card fraud.
It is even sadder to know that CASE prides itself on being the protector of consumer rights in Singapore. Obviously they are not walking their talk.
Banks in Singapore are allowed to get away with this because the Government has chosen to ignore the rights of consumers in favour of Big Business.
The Government can do so because it has disallowed the existence of independent lobby groups that can campaign for consumer rights, and there is no one to hold the Government accountable to consumers.
Why Consumers Need Greater Protection Against Credit Card Fraud
Even if consumers take the effort to inform credit card companies promptly of lost or stolen cards, there may be a lag between the time the consumer realized what had happened and the time the report was made, due to factors beyond the control of the consumer. It is ridiculous to penalize the consumer for fraudulent transactions made in this period.
Secondly, fraudulent transactions can be made on credit cards even if there was no physical theft or loss of the cards.
A customer service officer can easily copy down the credit card details when the consumer isn’t paying attention and use it to purchase merchandise online. The consumer may not even realize that the card had been fraudulently used until the monthly statement is printed.
Similarly, if the consumer uses his card for online shopping, and the credit card details are subsequently stolen by computer hackers and fraudulent transactions are made, it may be a long while before the consumer finds out about it.
In these cases, will consumers in Singapore still be liable for all transactions made on the cards?
Consumers in Singapore clearly need much greater protection against credit card fraud. Current laws are skewed too much in favour of the banks to the point of being illogical and absurd.
Credit card holders in Singapore pay an annual fee to the banks. Banks are supposed to use this annual fee as a form of insurance premium paid to cover fraudulent losses that are not the consumer’s fault. Instead, the banks here push the buck back to consumers and leave them vulnerable and deprived of their basic rights.
All this is done with the consent and collusion of the Government. And the Government dares to call us a financial hub and a democracy.