Bank entitled to cancel card without notifying holder

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Bank entitled to cancel card without notifying holder

Categories:

Fraud & scams,

Summary:

In February 2023, Salvador's bank noticed that someone had made three attempts to fraudulently use Salvador's company credit card. The bank put a temporary block on the card while it investigated. It considered a fraudster was making “testing attempts” – trying to determine whether stolen card details were valid in order to make purchases – and concluded the card details had been compromised. It decided to cancel the card and issue a replacement. However, it did not issue a replacement until at least two weeks beyond the usual replacement time, and only after Salvador had made several follow-up calls to the bank. Salvador complained that the bank had acted illegally in cancelling his card without his permission, and that its delay in sending a replacement had caused significant inconvenience in the running of his company.

Published:

August 2024

Our investigation

We looked at the terms and conditions of the credit card and found the bank was able to cancel the card without notice. It had done this on the basis it believed the card’s details had been compromised. However, the delay had inconvenienced the company, and we recommended the bank pay $500 compensation.