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**Credit Card nightmare**
Check your credit card rules
There's nothing like a banking glitch to send you into consumer hell. And from the looks of this story, credit card problems can be even worse - especially if your Visa card is issued by the Royal Bank Financial Group.
To go further
RBFG Visa cardholder agreement
Visa website
MasterCard International website
To join us
Columnists
It seems that Jacques and Jill, fine, upstanding Canadian consumers, have been attacked via the back door. It is quite easy for a smart programmer to write a little applet that will cull your credit card information when you make an online purchase from the wrong place. In this case, their purchase transactions with a particular site were apparently monitored by a program that took in the credit card numbers of both their US and Canadian dollar gold cards, and, eventually, transmitted those numbers to someone who used them to charge the costs of online casino gambling to the tune of several thousand dollars.
The transactions were processed through FireCash, part of the Surefire Commerce Inc. operation. In this column I won't get into the issue of whether or not online casinos are legal - or whether or not credit card merchant accounts should be granted to such organizations. The fact of the matter is, Jacques and Jill didn't gamble online and did bring the matter to the attention of the bank in a timely manner.
While it is true that the transactions have now been charged back to the merchant, I have received a spate of documentation from the victims, including copies of several letters to the bank describing the bank's lack of communication as well as the length of time taken to address and eventually resolve the problem. The US account was cleared only this first week of December, nearly half a year after the initial contact.
A senior manager for Visa Canada described Visa's fraud tolerance policy in an e-mail to Jill:
"I would like to first start by saying that Visa cardholders are protected from unauthorized use of their Visa credit card when shopping online or in merchant outlets through a program we have called Zero Cardholder Liability. Introduced in October 2000, the policy formalizes and standardizes the manner in which all the Visa issuing financial institutions in Canada treat cardholders who experience credit card fraud. "
I took a look at the websites for both Visa (http://corporate.visa.com/av/regions/canada.shtml) and MasterCard International (http://www.mastercard.com/general/zero_liability.html), as well as National Bank, Bank of Montreal, and Toronto Dominion Bank. On each site I found a similar statement. CIBC's site was not as clear, and they offered to send me a copy of their cardholder agreement by mail. Then I looked at the Royal Bank site.
To their credit, RBFG has posted their Visa cardholder agreement (http://www.royalbank.com/cards/documentation/ch_agreements/ch_agreement.html) in the requisite plain language. That, however, makes it all that much easier to be quite shocked by what you read there. Let me give you a few examples:
"If someone gets hold of your VISA Card and your PIN in a way that enables them to be used together, you will be liable for all their use of the VISA Card."
"If someone gets hold of your VISA Card and your security codes together, you will be liable for all their use of the VISA Card."
And then there is this clause:
If You Lose Your VISA Card You must tell us right away:
if your VISA Card is lost or stolen
if you suspect that someone else is using your VISA Card, or
if you suspect that it is missing.
Then, comes contact information along with the assurance that, once informed, they will be able to block the card from future use. Now comes the best one:
"If your VISA Card is used with your PIN or security code, you must pay us the full amount charged to your VISA Account, before you tell us that your VISA Card was lost or stolen."
That's right - before you tell them that the card is lost or stolen. And that Zero Liability clause espoused by Visa Canada doesn't seem to be anywhere in this document.
There is also a clause that states, "You may not use your VISA Card for any illegal or unlawful purpose." I did say I wouldn't get into the legalities of Internet gambling, but the information I have is that some of the sites promoting that activity are indeed considered illegal in many jurisdictions. So, why do they have merchant accounts?
There are some other really interesting clauses in this agreement, pertaining to how the bank can access any account you have with them, without your consent, in order to service your credit card account. Or how they can change the terms of the agreement without telling you. By the way, if there is a mistake on your statement and you don't tell them within thirty days, the records are considered to be accurate.
The moral of the story is: read your credit cardholder's agreement and check your statements as soon as you get them.
There's nothing like a banking glitch to send you into consumer hell. And from the looks of this story, credit card problems can be even worse - especially if your Visa card is issued by the Royal Bank Financial Group.
To go further
RBFG Visa cardholder agreement
Visa website
MasterCard International website
To join us
Columnists
It seems that Jacques and Jill, fine, upstanding Canadian consumers, have been attacked via the back door. It is quite easy for a smart programmer to write a little applet that will cull your credit card information when you make an online purchase from the wrong place. In this case, their purchase transactions with a particular site were apparently monitored by a program that took in the credit card numbers of both their US and Canadian dollar gold cards, and, eventually, transmitted those numbers to someone who used them to charge the costs of online casino gambling to the tune of several thousand dollars.
The transactions were processed through FireCash, part of the Surefire Commerce Inc. operation. In this column I won't get into the issue of whether or not online casinos are legal - or whether or not credit card merchant accounts should be granted to such organizations. The fact of the matter is, Jacques and Jill didn't gamble online and did bring the matter to the attention of the bank in a timely manner.
While it is true that the transactions have now been charged back to the merchant, I have received a spate of documentation from the victims, including copies of several letters to the bank describing the bank's lack of communication as well as the length of time taken to address and eventually resolve the problem. The US account was cleared only this first week of December, nearly half a year after the initial contact.
A senior manager for Visa Canada described Visa's fraud tolerance policy in an e-mail to Jill:
"I would like to first start by saying that Visa cardholders are protected from unauthorized use of their Visa credit card when shopping online or in merchant outlets through a program we have called Zero Cardholder Liability. Introduced in October 2000, the policy formalizes and standardizes the manner in which all the Visa issuing financial institutions in Canada treat cardholders who experience credit card fraud. "
I took a look at the websites for both Visa (http://corporate.visa.com/av/regions/canada.shtml) and MasterCard International (http://www.mastercard.com/general/zero_liability.html), as well as National Bank, Bank of Montreal, and Toronto Dominion Bank. On each site I found a similar statement. CIBC's site was not as clear, and they offered to send me a copy of their cardholder agreement by mail. Then I looked at the Royal Bank site.
To their credit, RBFG has posted their Visa cardholder agreement (http://www.royalbank.com/cards/documentation/ch_agreements/ch_agreement.html) in the requisite plain language. That, however, makes it all that much easier to be quite shocked by what you read there. Let me give you a few examples:
"If someone gets hold of your VISA Card and your PIN in a way that enables them to be used together, you will be liable for all their use of the VISA Card."
"If someone gets hold of your VISA Card and your security codes together, you will be liable for all their use of the VISA Card."
And then there is this clause:
If You Lose Your VISA Card You must tell us right away:
if your VISA Card is lost or stolen
if you suspect that someone else is using your VISA Card, or
if you suspect that it is missing.
Then, comes contact information along with the assurance that, once informed, they will be able to block the card from future use. Now comes the best one:
"If your VISA Card is used with your PIN or security code, you must pay us the full amount charged to your VISA Account, before you tell us that your VISA Card was lost or stolen."
That's right - before you tell them that the card is lost or stolen. And that Zero Liability clause espoused by Visa Canada doesn't seem to be anywhere in this document.
There is also a clause that states, "You may not use your VISA Card for any illegal or unlawful purpose." I did say I wouldn't get into the legalities of Internet gambling, but the information I have is that some of the sites promoting that activity are indeed considered illegal in many jurisdictions. So, why do they have merchant accounts?
There are some other really interesting clauses in this agreement, pertaining to how the bank can access any account you have with them, without your consent, in order to service your credit card account. Or how they can change the terms of the agreement without telling you. By the way, if there is a mistake on your statement and you don't tell them within thirty days, the records are considered to be accurate.
The moral of the story is: read your credit cardholder's agreement and check your statements as soon as you get them.