Cardholders protected from Nov 1 provided they are not negligent
By Chua Hian Hou & Lim Wei Chean 04 September 2009
Banks have decided to change a long-standing policy which made credit card holders liable for all charges incurred on lost or stolen cards before they are reported missing.
From Nov 1, cardholders’ liability will be capped at $100, provided they are not negligent or fraudulent and notify the banks as soon as they discover the loss.
In some cases, the banks may even waive the amount, according to an Association of Banks in Singapore (ABS) internal briefing note to banks obtained by The Straits Times.
ABS is expected to announce the cap today. Contacted yesterday, a spokesman for the association declined comment, but a check with some banks confirmed the change.
No reasons were given for what amounts to a change of heart among banks here.
It comes after weeks of debate between consumers and banks, triggered by a Straits Times report in July about a woman saddled with a $17,100 bill after her credit cards were stolen.
Human resource administration manager Tan Shock Ling, 39, realised she lost her wallet and credit cards only when a bank called to ask if she had bought a $5,700 Rolex watch.
By then, the thieves had used three of her credit cards to buy three Rolex watches, chalking up $17,100 in charges. Despite evidence which showed Ms Tan was innocent, including CCTV footage of the thieves using her cards, the Royal Bank of Scotland, United Overseas Bank and Citibank insisted that she pay up.
After the report appeared, The Straits Times Forum Page received about 100 letters, making this one of the hottest topics among readers this year. Many writers demanded greater protection for credit card holders.
But banks stuck steadfastly to their guns, saying the policy was ‘standard industry practice’.
ABS also issued a statement saying that ‘the first and primary line of defence is the customer, who has custody and possession of the card’.
Currently, only two card issuers, Maybank and American Express, have liability caps. The Amex limit is $100, while Maybank’s is $500.
Other banks hold cardholders responsible for all transactions made before a loss of card is reported. But some, like DBS Bank and Citibank, said they would review cases individually.
The switch to a $100 liability limit will bring bank practice here in line with that of several other countries.
In the United States, for example, the Truth in Lending Act has special provisions which limit cardholders’ liability to US$50 (S$72) for fraudulent charges.
Malaysia’s central bank, Bank Negara, limits consumer liability to 200 ringgit ($82) after a card is stolen.
According to the ABS memo, the changes are aimed at providing ‘transparency and to give cardholders more certainty about their credit card liability’.
Consumers Association of Singapore president Yeo Guat Kwang applauded the news and said: ‘This protection for consumers is long overdue.’
He said the consumer watchdog had been lobbying for greater protection for credit card holders for some time. But up till now, he added, banks had refused to consider it, saying the credit card terms and conditions were clearly spelled out.
For Ms Tan, whose case sparked the debate and who is still awaiting the outcome of her tussle with the three banks, news of the change was bittersweet. She said the change ‘comes too late for me, but I am happy that Singaporeans will get better protection from now on’.
The banks in her case have waived interest and late payment charges, pending the results of a police investigation.
Plastic has become increasingly popular in Singapore. According to the Monetary Authority of Singapore’s statistics, Singapore consumers held 6.28 million credit cards and used them to pay for upwards of $25.66 billion in goods and services last year.
From January to July this year, some 6.53 million credit cards had been used to ring up $14.11 billion in charges.
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$100 liability cap for lost credit cards
Cardholders protected from Nov 1 provided they are not negligent
By Chua Hian Hou & Lim Wei Chean
04 September 2009
Banks have decided to change a long-standing policy which made credit card holders liable for all charges incurred on lost or stolen cards before they are reported missing.
From Nov 1, cardholders’ liability will be capped at $100, provided they are not negligent or fraudulent and notify the banks as soon as they discover the loss.
In some cases, the banks may even waive the amount, according to an Association of Banks in Singapore (ABS) internal briefing note to banks obtained by The Straits Times.
ABS is expected to announce the cap today. Contacted yesterday, a spokesman for the association declined comment, but a check with some banks confirmed the change.
No reasons were given for what amounts to a change of heart among banks here.
It comes after weeks of debate between consumers and banks, triggered by a Straits Times report in July about a woman saddled with a $17,100 bill after her credit cards were stolen.
Human resource administration manager Tan Shock Ling, 39, realised she lost her wallet and credit cards only when a bank called to ask if she had bought a $5,700 Rolex watch.
By then, the thieves had used three of her credit cards to buy three Rolex watches, chalking up $17,100 in charges. Despite evidence which showed Ms Tan was innocent, including CCTV footage of the thieves using her cards, the Royal Bank of Scotland, United Overseas Bank and Citibank insisted that she pay up.
After the report appeared, The Straits Times Forum Page received about 100 letters, making this one of the hottest topics among readers this year. Many writers demanded greater protection for credit card holders.
But banks stuck steadfastly to their guns, saying the policy was ‘standard industry practice’.
ABS also issued a statement saying that ‘the first and primary line of defence is the customer, who has custody and possession of the card’.
Currently, only two card issuers, Maybank and American Express, have liability caps. The Amex limit is $100, while Maybank’s is $500.
Other banks hold cardholders responsible for all transactions made before a loss of card is reported. But some, like DBS Bank and Citibank, said they would review cases individually.
The switch to a $100 liability limit will bring bank practice here in line with that of several other countries.
In the United States, for example, the Truth in Lending Act has special provisions which limit cardholders’ liability to US$50 (S$72) for fraudulent charges.
Malaysia’s central bank, Bank Negara, limits consumer liability to 200 ringgit ($82) after a card is stolen.
According to the ABS memo, the changes are aimed at providing ‘transparency and to give cardholders more certainty about their credit card liability’.
Consumers Association of Singapore president Yeo Guat Kwang applauded the news and said: ‘This protection for consumers is long overdue.’
He said the consumer watchdog had been lobbying for greater protection for credit card holders for some time. But up till now, he added, banks had refused to consider it, saying the credit card terms and conditions were clearly spelled out.
For Ms Tan, whose case sparked the debate and who is still awaiting the outcome of her tussle with the three banks, news of the change was bittersweet. She said the change ‘comes too late for me, but I am happy that Singaporeans will get better protection from now on’.
The banks in her case have waived interest and late payment charges, pending the results of a police investigation.
Plastic has become increasingly popular in Singapore. According to the Monetary Authority of Singapore’s statistics, Singapore consumers held 6.28 million credit cards and used them to pay for upwards of $25.66 billion in goods and services last year.
From January to July this year, some 6.53 million credit cards had been used to ring up $14.11 billion in charges.
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