Heavies Ruin Holiday – Take Care with Credit Cards

21 December 2012

Heavies Ruin Holiday – Take Care with Credit Cards

Banking Ombudsman Deborah Battell is urging Kiwis to take care with their credit cards over the holiday season, particularly if they are heading overseas.

The warning comes on the back of a recent case the Banking Ombudsman Scheme considered where a man, on holiday in Eastern Europe, was ‘heavied’ into paying $1,600 by credit card, allegedly for hospitality at a local bar.

Ms Battell said that cases where New Zealanders were forced to make card transactions under threat of violence were complicated, but customers should know that banks may not be able to help them get their money back.

“In this case, even though the man had not enjoyed the hospitality, the essential dispute was between the man and the local bar.”

“Unfortunately, the fact that the payment was made under duress didn’t alter the situation. The customer had authorised the transaction and correctly entered his PIN and so the bank was required to pay. The customer was therefore obliged to repay the bank,” said Ms Battell.

The man had called the bank immediately to cancel the transaction, but his bank could not do so as it is not possible to stop a credit card transaction. While the bank attempted a chargeback (a procedure followed by credit card companies where a transaction is disputed) it did not succeed because the PIN had been used, and the bar owners had provided a receipt and other documentation in support of the transaction.

“In situations like these, while customers should alert their bank and request a chargeback, getting their money back is most likely to be a matter for the local police.”

Ms Battell said that the best way to prevent situations like this happening was to be aware of the risks and take the following precautions when travelling:

• Remember tourists are targets, so do your best to keep yourself, your cards and your PIN number safe.
• Inform your bank that you are going overseas and which countries you will be visiting – banks can sometimes pick up unusual activity on your card, but remember they are not legally obliged to monitor your cards for you.
• Report any incidents to the local police and your bank immediately.
• Consider taking more than one card with you and having lower limits on each card.
• If there is a transaction that you wish to dispute, ask your bank to attempt a chargeback.

ENDS

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