better banking

Lunch-time card fail led to complaint about bank’s poor service

17 Nov 2016

Mrs B attempted to use her debit card several times in a cafe, but each transaction was declined.  The receipt noted ‘refer to card issuer declined’.  Mrs B felt humiliated and embarrassed as she couldn’t pay for lunch.  She had previously checked her account balance and noted she had sufficient funds to make the purchase.

Mrs B contacted the bank which advised that her Eftpos card was blocked because the bank couldn’t contact her about her credit card arrears and wanted to prompt her to contact the bank. 

Mrs B was unhappy it hadn’t contacted her before stopping her card and complained.  The bank advised her it had contacted her on numerous times to discuss repayment options but that no repayment plan had been agreed.  As a result, the bank was concerned she wouldn’t repay the debt so had followed its standard escalation process and blocked the card.

Mrs B complained to us, seeking an apology and $2,000 compensation for humiliation and inconvenience suffered.  She believed the bank should have informed her before taking such action.

We explained to Mrs B that the bank was not required to notify her before suspending her card but that the Code of Banking Practice notes that banks will advise all account holders as soon as possible in such circumstances.  The bank’s general terms and conditions also noted that the bank would advise its customers as soon as possible when access to their accounts had been refused, why it had taken that action and if there was anything the customer could or must do before they could use the account again.

In light of the above provisions, we considered it would have been appropriate for the bank to have advised Mrs B her card had been blocked and that she was required to contact the bank to discuss her arrears to reactivate the card.  We also noted, that having reviewed the telephone calls between staff and Mrs B, it appeared Mrs B had indicated she would be in a position to repay the arrears when funds became available and that she had not declined to discuss a repayment plan, as the bank had suggested.

The bank accepted it should have contacted Mrs B after it had blocked her debit card and offered her an apology and $100 for the stress its actions had caused her.  Mrs B accepted the bank’s offer and the matter was resolved.

In addition, the bank queried what might be an acceptable method of notifying customers once a debit card had been suspended.  We confirmed that either a text message or call to a cell phone number would be the most effective way of providing a customer with timely notice, providing of course that the customer had elected that method of contact.  We didn’t consider advising a customer by way of letter would provide immediate notification.