Fraudulent transactions on stolen card
I have been a customer with Citibank for 15 years. On December 5, 2014, my sister Kiran Bijlani, holding a Citibank Citilife Visa Infinite supplementary card, lost her purse in a mall in New York, US. She had other cards and valuables that were lost along with this card. The card was blocked shortly thereafter, but until then, there were four fraudulent transactions that had passed, which Citibank’s agent told me that he had allowed, even though he had noted these transactions were suspicious. His reason was he did not want to disturb me. This conversation is in Citibank’s records.
I was also surprised that Citibank allowed these transactions, even though neither the Pin number nor the signature was verified by the vendor and these are both security features.
A criminal case was filed with the New York Police Department and a police report was furnished to Citibank’s Fraud team, along with the dispute form. I was assured that a strict investigation would be undertaken for recovery from the vendor.
Another Visa card issued by another bank was also abused at the same retailer, before the other bank blocked the card through their own vigilance. The fraudulent transactions were reversed by the other bank on December 12, 2014, after completion of their investigation.
To my surprise, I noted that all these fraudulent transactions showed up on the monthly card statement, to which I immediately objected, as Citibank had not yet reported the completion of their investigation. Rubbing salt into the wound, in January and February 2015’s statement, I noticed that finance charges were also added to the fraudulent amount, which still shows as outstanding.
I finally received a negative reply from them on February 8. From the onset, I sensed the bank’s lapse in protecting the customer and their laidback attitude. I am further terrified that they want to penalise their diligent customer, who furnished the police reports, too, while other banks, on receipt of the same legal documents, reversed the charges and closed the case in a matter of days.
I urge Gulf News to take up this matter and help resolve it.
From Mr Pawan Bijlani
Dubai
The management of Citibank responds:
Thanks for bringing this inquiry to our attention. We have already responded directly to Ms Bijlani on the same inquiry. Following Gulf News’ inquiry, we have again investigated the matter and we’ve come to the conclusion that Ms Bijlani stands liable for the transactions in question.
A customer stops being liable for credit card transactions once he/she reports the loss of the credit card via Citiphone or in writing. The four transactions executed on the card were unfortunately made before the card was reported stolen. In fact, the realisation that the card was stolen or had gone missing, came to the attention of the customer after Citibank’s team alerted the customer to the possibility of potentially unauthorised transactions being attempted on the card. At that particular point, the four transactions had already taken place, but the pro-active card blockage by the Citibank’s team, even before the customer confirmed the card as being lost, prevented further fraudulent transactions amounting to Dh5,700.
As for the Chip and Pin security features, please note that the transactions have taken place in the US which is a non-EMV market (Europay, MasterCard, and Visa), that is Chip and Pin technology is not implemented yet, so cards are read through magnetic stripe only and not through chip.
Ms Bijlani remains a valued customer of Citibank, but I assure you that we have gone out of our way to address her inquiry, all within the bounds of the terms and conditions that govern the credit card relationship.
Mr Bijlani responds:
Thank you Gulf News, for taking up my issue. This communication has been sent to me by Citibank, too. I have pointed to them the following:
1. The card was blocked shortly thereafter, but until then, there were four fraudulent transactions that had been passed, which Citibank’s agent told me that he had allowed, though he had noted these transactions were suspicious.
2. It is surprising that credit card companies are incorporating security features like Chip and Pin in their cards but not enforcing them, in spite of clear directives from Central Bank. It is even more surprising that a basic signature verification from the vendor is not enforced. This is negligence, which leaves the card holder totally vulnerable. The bank should not give credit to vendors for transactions where even these basic verifications are not complied with. In my case, there is no way that the signature would have matched, thus the thief could have been caught by the vigilant vendor, but alas, the bank prefers to penalise their patrons.
3. I was pleasantly surprised when I saw in my April credit card statement, a reversal of one of these four fraudulent transactions. I believe Gulf News’ efforts have borne fruit. As they have reversed this transaction, now they should reverse the other three, too. I have requested the same.
The management of Citibank responds:
Thank you for your follow up on this matter. We have spoken to the customer again and investigated the matter further and we have come to the conclusion that Mr Bijlani still stands liable for the transactions in question on his supplementary card.
As previously confirmed, a customer stops being liable for credit card transactions once he/she reports the loss of the credit card via Citiphone or in writing. At Citi we offer 24X7 fraud monitoring and real-time transaction alerts to our customers as a value added service. In this case, the card was pro-actively blocked by the agent, based on his suspicion, when the alert triggered on Citi’s fraud monitoring system. After blocking the card, the agent sent an email and a text message to the customer, which is when the customer realised that the card was lost.
As part of the terms and conditions of using a credit card, acknowledged and accepted by a cardholder before the credit card is issued, cardholders have the responsibility of protecting the card and notifying the bank immediately in the event of loss of the card. The cardholder is liable for transactions with the card till such time that the loss is reported, as stated in the mentioned contractual terms and conditions, which is consistent with local market practice in the UAE.
The reason for the reversal of one of the transactions has been explained to the customer. The reversal was due to the fact that the merchant was not able to provide the required documents for that particular transaction. For the remaining three transactions the merchant provided us with documents that are considered valid, as per the Card Association (in this case, Visa) rules.
In terms of the Chip and PIN (EMV) mandate, chip acceptance is, in fact, mandated by the Central Bank of the UAE for transactions performed in the UAE. However, the US are still not on EMV mandate. Hence as per Visa rules, there is no liability shift applicable for transactions in the US until EMV mandate is implemented there.
Regarding the signature verification, as per Visa rules, merchants are not obliged to validate that the signature on the charge slip matches with that on the back of the card.
As a gesture of goodwill, Citi will reverse the finance charges that got accrued to the client on the card due to non-payment of these amounts. This has been communicated to the client.
Mr Bijlani continues to remain a valued customer of Citibank.
(Process initiation: March 24. Response from organisation: April 5. Process completion: May 13.)