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Expat Investor : January February 2008
Fair play on plastic purchases A selection of cases showing how the UK's Financial Services Ombudsman deals with complaints involving foreign travel and problems with credit cards, debit cards, electronic money transfers and currency exchange. TEN TIMES OVERCHARGED While on a short holiday in Brittany, Mr B used his credit card to pay for several large boxes of cigarettes and cigars. When the transaction appeared on his next credit card statement, Mr B noticed that his credit card account had been greatly overcharged. The actual cost of his purchases was 291.80 but his card had been debited with 2,918. Mr B contacted his bank to complain, which said it was unable to help as there had been no error in processing the transaction. Mr B was certain there had been a mistake. However, he was unable to get any further with the bank so he took his complaint to the Ombudsman. Complaint upheld The receipt and other details that Mr B sent confirmed that his purchases had totalled 291.80. The Ombudsman was satisfied that he had believed he was authorising that amount on his account. The error in entering the amount as 2,918 had been made by the retailer in France, not by Mr B's bank. However, the Ombudsman considered the bank to have been wrong when it had insisted it was unable to help Mr B. If it had initiated a 'charge back' through the credit card network it was part of, the bank could have tried to 'claw back' the money that Mr B had been charged in error. There was only a limited amount use the card and had to borrow some money from one of the friends who was travelling with her. When she returned to the UK she complained to the bank, saying it should compensate her for the inconvenience and worry she had been caused. Complaint upheld After looking into the details of the case, the Ombudsman concluded that the bank had acted reasonably in putting a stop on the card. It had good grounds for suspecting that Mrs D's card had been used without her knowledge. However, the Ombudsman thought that once it had become aware that Mrs D had made the transactions herself, and that she was relying on the card while she was abroad, it should have sorted the situation out quickly. The delay had caused Mrs D considerable worry and some embarrassment, in addition to the inconvenience. The OFFSHORE MONEY TRANSMISSION expatinvestor.com 18 EXPAT INVESTOR January/February 2008 Ombudsman ruled the bank should pay her £400 in compensation. DELAY IN ELECTRONIC TRANSFER After inheriting some money, Mr and Mrs J bought a house in Malta to use as a holiday home. The house needed quite a bit of work doing to it, and as soon as they had appointed a firm of builders, the couple opened a bank account in Malta. They thought this would simplify things when paying for the renovation work, particularly since they would continue to be based in the UK for most of the year. Several months later, Mr and Mrs J booked a short trip to Malta. They were keen to see how the building works were progressing, but they also needed to make a scheduled payment to the builder. The builder had asked to be paid in cash -- and in euros. So a few days before their trip, Mr and Mrs J instructed their UK bank to make an electronic transfer of £4,000 worth of euros to their Maltese bank account. However, when they arrived in Malta and visited the bank, they were told the money had not been transferred. Unable either to pay the builder or to discover what had happened to their money, they cut short their trip and returned home. Mr J then complained to his UK bank. He said it should reimburse him for the cost of the wasted trip. But the bank refused, saying it had not been at fault. It told Mr J that the money had definitely reached the Maltese bank the day after he had asked for the transfer. So it said the problem must have been caused by the Maltese bank and it was down to the Maltese bank to compensate him for any losses he had incurred. Mr J was unhappy with this response and felt certain there was more that the UK bank could do to help him. Unsure how best to pursue the matter, Mr J then contacted the Ombudsman. Complaint upheld_ The Ombudsman looked into the details of Mr J's complaint. The investigation included listening to a recording of the conversation between the member of staff dealing with the transfer at Mr and Mrs J's UK bank branch and the member of staff at the UK bank's processing centre. The Ombudsman also looked at communications that of time during which that option was available to the bank and, by the time Mr B brought his complaint to the Ombudsman, that time had passed. In the Ombudsman's view, if the bank had requested a charge back when Mr B first queried the transaction, it would probably have been successful in reclaiming the amount charged in error. It was not considered fair that Mr B should lose out simply because he had not realised that the bank had been wrong in saying it could not help. So, the Ombudsman ruled that the bank should credit Mr B's account with the difference, adjust the interest so that he was not disadvantaged in any way by the initial higher transaction and pay him £250 for the inconvenience he had been caused. BANK STOPS TRAVELLER'S DEBIT CARD Shortly after retiring from her job as a primary school teacher, Mrs D went on a trip to Belize with three friends. Soon after she arrived she used her bank debit card without difficulty in several different shops. However, when she tried to make a purchase with the card a few days later she was alarmed to discover that the transaction would not go through. Mrs D knew there were sufficient funds in her account to cover the purchase. And she had been intending to use the card later that day to withdraw the cash she needed for food and other expenses during the remainder of her trip. So she rang her bank urgently to find out what had gone wrong. The bank said its fraud department had identified some of the shops where she had used the card as 'suspect'. So, thinking that a fraudster might be using the card, the bank had placed a 'stop' on it. The bank agreed to get the stop lifted, but to Mrs D's considerable annoyance, it told her that somebody would need to come into her branch in person before it could arrange this. Mrs D telephoned her daughter, Mrs J, back in the UK and arranged for her to go into the bank to get the stop lifted. However, by then it was the Saturday of a bank holiday weekend in the UK, so Mrs J was unable to do anything until the bank opened again on the Tuesday. Meanwhile, Mrs D was unable to "It was not considered fair that Mr B should lose out simply because he had not realised that the bank had been wrong in saying it could not help." "The delay had caused Mrs D considerable worry and some embarrassment, in addition to the inconvenience."