My post two weeks ago on Shittybank received an incredible number of hits, with several thousand readers from here and abroad not only reading the post, but spending an average of 8-9 minutes on it, an eternity in the blogosphere where clicks and attention spans are measured in nanoseconds. Here is my follow-up to that Shittybank post and the earlier post on liabilities on stolen cards. I find that the subject matter is incredibly timely, given all of the recent press regarding credit card identity theft (e.g., unscrupulous waiters swiping your card and selling the info) and a recent conference on credit card fraud. I suspect, and sincerely hope, that this credit card discussion will shortly become a national issue, in the same manner that those massive godawful billboards have finally begun to come tumbling down (literally and figuratively). And that took many years after several intelligent folks started to criticize them in their columns and speeches.
If you recall, I left off in the last Shittybank post waiting for a definitive written letter of explanation/apology from the bank. I am happy to report that they did in fact have a definitive verbal answer for me within 40 hours of my writing the post and with the help of several readers who forwarded my rant to the right people at the bank. I would describe the essence of their verbal answer in the following distilled version, as voiced by an Assistant Vice President of the Quality Office and earlier conversations with Credit Card Staff:
1. On the issue of the unauthorized breach of my supplementary card credit limits…
– The bank confirms that I had requested limits of PHP20,000 for employee A and PHP30,000 for employee B on their supplementary credit cards; this was on file for nearly two years. My main card for this account had a PHP75,000 credit limit.
– Sometime in May 2006, the bank increased my credit limit without first seeking my approval and simply informed me after the fact in their monthly statement. I called them at the time and requested that the limit be reduced back to PHP75,000. I asked for no changes to the limits of the supplementary cards.
– In May 2006, when the request for reduced limits came in, someone at the bank’s maintenance or administration unit decided to increase the credit limit of Employee A to PHP75,000. It is now not clear if Employee B’s limit was likewise raised, one banker says yes, the AVP says no. Both are on tape.
– In October 2006, Employee A breached his presumed limit by PHP20,000+ and I called the bank and that resulted in the Shittybank post two weeks ago.
– The bank personnel/managers all agree the breach of limit should not have occurred.
The bottom line? The bank verbally agreed that I indeed had lower limits on the supplementary cards, I never requested that they be subsequently increased, that I did reduce my overall limit when they doubled it last May and that Employee A did in fact breach a pre-stated and pre-approved limit of PHP20,000.
2. On the issue of potential liability in the event my card(s) are stolen and used by the thieves before I have a chance to call Shittybank (including time spent unable to reach Shittybank due to highly congested telephone lines and voice recordings)…
– Several staff and managers confirmed that YES, THE CARDHOLDER IS LIABLE FOR ALL CHARGES THAT ARE MADE ON STOLEN CARDS until the card is reported lost (the only exception I have found so far is American Express).
– Therefore, it follows that if my Employee A’s card was STOLEN and used by thieves, we could have been liable for up to PHP75,000 instead of the PHP20,000 limit we thought we had.
The bottom line? Consumers may be liable for the entire amount of their credit limit if they are unable to report their card lost and thieves use it to charge items on your card. I never even had the discussion what happens with IDENTITY THEFT where they get your information but you never lose your card.
So that all sounds good right? The bank clarifies that they were completely in the wrong. That they somehow inadvertently increased my Employee A’s limit without authority and defying any cross-checks and balances that should have been in place. And better yet, they tell me that THEY WILL CREDIT ME WITH THE ENTIRE EXCESS OVER APPROVED LIMIT IN THE AMOUNT OF PHP20,831.34 — A RELATIVELY UNPRECEDENTED STEP FOR A BANK. WOW! ADMIT MISTAKE AND REFUND SERIOUS MONEY AS WELL!!! I was actually impressed with the verbal discussion and I asked that this all be placed in writing and sent to me. That was late on a Friday evening, October 13. On October 16, late in the afternoon, I received this facsimile letter which I reproduce here (except names):
October 15, 2006
Dear Mr. Marketman,
This is in reference to the phone conversation we had last Friday, October 13, 2006 regarding your account.
First of all, let me thank you for the feedback as it gave us the opportunity to take action.
We are pleased to inform you that we re-adjusted the credit limit of the supplementary card (####), assigned to Employee A, from PHP75,000 to PHP20,000 on October 11, 2006.
We understand your disappointment over this incident and wish to extend our apology. Rest assured that this is an isolated case and that a reminder has been issued to all concerned to prevent a repeat of the incident.
In closing, we wish to confirm that we have reversed the transaction amount in excess of the assigned credit limit of your supplementary card as mentioned in our phone conversation. The credit adjustments will be reflected in your November 2006 statement of account.
Once again, thank you for bringing the matter to our attention.
I was out of town when this facsimile and subsequent original arrived but I did play phone tag with the person until Wednesday when I made it clear in no uncertain terms that the letter did not mirror what was discussed verbally. I requested that they put the actual cause of the mistake, how it happened, when it happened and what was going to be done to correct it. Then I also asked that the amount that they were refunding should be put in the letter as well. They refused. They were standing by their letter and were not willing to change it to, in my personal opinion, explicitly state that the error was completely theirs and that the large refund was a result of their careless error.
So here is my conclusion from this entire affair. I am grateful that the bank verbally and on tape admitted candidly that they were completely at fault in this case. I am grateful that they saw fit to completely refund the excess charges of PHP20,000+ above the approved credit limit. However, I am disappointed that they couldn’t take the next step and record this on paper, the first step to really truly acknowledging the gravity of the issue and forcing them to take real action. I even assured them I wouldn’t think to sue them if they just sent me the letter with the facts. But no go. Hmmm, I wonder how many lawyers were consulted for this brief paper of correspondence. What are they afraid of? That this isn’t an isolated case and that others may start clamoring for refunds in similar situations? That admitting the error in writing will cause them more losses than the refund offered? That their bosses would nail them if they admitted liability in writing? And oddly, the stationery had nary a phone number, fax number or email address on it. And more, the fax sent to me didn’t show the fax number of the sender — thank Buddha I have caller ID on all our phones now; yes, I have the numbers of the powers that be thanks to so many readers and others who have forwarded them to me.
So read on to see WHAT MARKETMAN IS GOING TO DO NEXT!
I am seriously thinking of taking the entire PHP20,831 windfall as a result of my complaint and I will add my own money to it to take out a 1/8th page or 1/4th page (whatever I can afford) advertisement in the Philippine Daily Inquirer and/or Businessworld that warns all credit card users in the Philippines about the possible liabilities in the event of card loss and the recent practice of credit card companies of increasing credit limits without first seeking cardholder approval. I would consider this Marketmanilaâ€™s Christmas present to the several hundred thousand credit card holders in the Philippinesâ€¦ (Postscript: The entire amount was donated to a Feeding Program for Undernourished Public School Children)
In addition, if I find the time and energy, I intend to write Speaker of the House and an intelligent Senator to try and raise awareness about the consumer unfriendly nature of the credit card laws currently in place in the Philippines. I might even volunteer to testify at any public hearings on the matter and do some research and presentations necessary to get this issue the attention it deserves. I would ask all of my readers to give your friends and colleagues a heads up about rampant increases in credit limits and the risks of loss if and when their cards are stolen. I actually hope this isn’t the end of the issue yet… Do you think it’s worth the effort???