Cardholders have the right to know that whenever their lost or stolen credit cards are used by others, they should not (in most cases) have to pay more than RM250. Often 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 have informed the bank about lost or stolen cards as soon as possible.

Protection is given under Clause 13.2 of Bank Negara’s Credit Card 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 contract states that all transactions carried out before the loss of the card is reported to the banks are deemed to be carried out by the cardholders. Many cardholders 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. It should therefore rule that:

- The RM250 maximum liability on fraudulent transactions is highlighted to cardholders in the credit card agreements as well as in their monthly card statements.

- Banks are not allowed to insert any clause in the credit card agreements 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 guidelines unless its intention is to protect cardholders. We trust that Bank Negara will do the needful and not let consumers down.

The writer is president, Consumers Association of Penang (CAP).