1. Keep your cards close
During the festive season, protect your cards, shield your PIN, and never share your bank details. If your card goes missing, contact your bank immediately. Under the Code of Banking Practice, banks must compensate customers for unauthorised transactions unless customers have breached the terms and conditions of their card, or they haven’t taken reasonable steps to protect their banking details.
Last year, 582 of Banking Ombudsman complaints related to cards (or 13% of total cases) and the meaning of “reasonable” is often considered. For example, when out at the pub on a business trip, a thief watched Marcel* closely as he paid for drinks, picked his pocket, and spent $30,000 on his bank card. Marcel’s bank wouldn’t compensate him – they said he’d disclosed his PIN and contributed to the loss. The Banking Ombudsman didn’t agree. Marcel didn’t know he was being watched, and the facts suggested he’d taken reasonable care when he entered his PIN. Marcel was reimbursed with interest for all unauthorised transactions. See our quick guide on cards and PINs.
2. Take care to avoid scams
Scammers are getting smarter and sharper, and the stakes are high for banks and their customers. “Scam complaints are on the rise,” says Ms Sladden. “Last year we received over 370 complaints about scams and fraud, and that’s just the tip of the iceberg. When shopping online, only use your card on trusted sites. Beware of random texts (such as the bogus package delivery text), or emails asking for login details, PINs or passwords. Before clicking links, stop and think, is this for real?”
While banks have a general obligation to reimburse customers for fraud from unauthorised transactions, sometimes - such as in romance or investment scams – customers authorise payments. In these cases, we consider whether the bank acted with reasonable care and skill. For example, when Jamie* authorised a transfer of $43K to ‘Sarah’s’ overseas account, he didn’t mentioned they’d met on an online dating site, and said Sarah was a trusted friend. The bank couldn’t warn Jamie about something it didn’t know about. Similarly, when Sue and Chris* lost their life savings to an investment scam, they told the bank the $100K was for family and a holiday.
Other scams include phone PIN scams (never give out your PIN or password), Mule scams (never accept money into your account for transfer to others), Phishing scams (delete emails that appear to be from your bank asking for passwords - banks don’t do this), and remote access scams (don’t give access to your personal devices or provide codes and passwords). See our quick guide on scams.
3. Remember payments aren’t processed over public holidays
If you’re making or expecting a payment over the holidays, check the cut off times with your bank. Payments to other banks aren’t processed over weekends or on public holidays. Payments made on non-business days will be processed the next business day. See our quick guide on payments.
Most importantly, take care and have a relaxing break.
Meri Kirihimete from BOS.
Please attribute all comments to Nicola Sladden, Banking Ombudsman