Doesn’t anyone BOTHER TO CHECK?

Doesn’t anyone BOTHER TO CHECK?
In a TNP test, 2 Chinese women use Indian man’s credit card at 3 shops, 2 restaurants and a taxi ride. Hardly anyone asked questions, despite odd signatures
August 02, 2009 Print Ready Email Article

DO salesmen and waiters look at key details on a credit card before they swipe it for payment?

Click to see larger image
ALERT BUT…: Only one retailer questioned the reporters, when one of them used this oddly-drawn flower as a signature. –TNP PICTURE: CHOO CHWEE HUA

Aren’t the name and signature on a card important enough to warrant a second look?

Apparently not.

To put this to a test for the sake of better credit card practices among retailers, two women used the card bearing a man’s name, with the cardholder’s permission.

The result of the test was appalling.

The two women, reporters from The New Paper, were able to make purchases from four out of five retailers approached, all from a single mall.

No questions were asked.

Never mind that the card, borrowed from a colleague, bore a man’s name.

Never mind that the name on the card was clearly of a different race.

Even the signatures didn’t match.

In this experiment, the cardholder willingly paid for all the expenses charged.

But what if the card had been used by fraudsters?

In the debate over whether the card-issuer or consumer is liable for fraudulent purchases, one party seems to have got away blame-free.

We’re talking about retailers who are either careless, or couldn’t care less, and allow fraud to be committed.

Click to see larger image

Who bears the loss then?

Such a liability issue arose after Madam Tan Shock Ling, 39, a human resource administration manager, lost her credit cards and reported the loss only after crooks chalked up a $17,100 bill using her cards.

The credit-card issuers want her to pay because they are liable only for unauthorised transactions made after her cards’ loss was reported.

Madam Tan told The New Paper that she had to pay for bills she did not authorise after fraudulent purchases were made in ‘less than an hour’, as shown from the credit card slips.

In this ‘stress test’ of our own, our reporters went on a mini-spree in less than two hours. In that time, they managed to use the card to pay for small items like hair bands and socks, and have a leisurely dim sum lunch, followed by ice cream at another restaurant.

They then used the card to pay for the taxi ride back to the office. All that was needed was the card number and its expiration date.

No signature checks. No name checks.

But don’t try this on your own because you could be committing an offence.

Testing stores

At the first store, the reporters snuck around, whispering so they would not be overheard by the cashiers.

What should they buy? How to deliberately use an odd ‘signature’ that might raise attention?

When it finally came to the payment itself, they hesitantly offered the borrowed card, cringing in anticipation of being found out.

But nothing happened.

The cashier barely glanced at them, taking the card and approving the transaction.

Next, they strolled into two more shops, each time presenting the same credit card.

At the dim sum restaurant, they attempted to push the limits by signing the bill with Chinese characters while offering a card with an Indian name.

The cashier took one look, picked up the card, and smiled: ‘Thank you, come again!’

There was little traffic in the mall as they passed through cashier after cashier with little notice.

That is, until one of them drew an oddly-shaped flower as a signature. This prompted a double take by the cashier, who then asked whose card it was.

That was the sole query about identity they faced in the two-hour experiment.

Someone must bear cost of extra security

Upon learning that they did not own the card, the cashier simply accepted cash for the digital alarm clock they wanted to buy.

The cashier, who has been working in the retail industry for 30 years, said when the reporters identified themselves: ‘I would have withheld the card and alerted the authorities, but you offered cash so I let you keep the card.’

Should retailers bear some responsibility for fraudulent transactions?

Said Singapore Retailers Association executive director Lau Chean Wei: ‘We have to bear in mind that in any business, and whichever business model is adopted, someone has to bear the cost.

‘If the merchant has to bear the cost, they may factor in this risk in their cost of operations, and the cost may be passed on to the consumer in the form of higher prices. There is no one-size fits all solution.’

In the liability tussle between banks and cardholders, one thing’s for sure: In the retail trade, cashiers, unlike customers, need not be aware.

– Hoe Pei Shan, newsroom intern

Beware, don’t try this

USING someone else’s credit card could be an offence, even with permission of the cardholder.

Harry Elias Partnership’s head of criminal litigation practice, Mr Shashi Nathan, said that posing and signing off as the cardholder is both forgery and cheating and making unauthorised transactions can amount to fraud.

Who should take the BLAME?

CASE: Consumer, bank share blame

The executive director of the Consumers Association of Singapore (Case), Mr Seah Seng Choon: ‘We are of the view that each party owes a duty to prevent transactions using a stolen credit card.’

Case believes, however, that ‘the bank should have provided insurance coverage facilities for the consumer to opt in to protect the consumer against any possible loss as a result of fraudulent transaction due to loss or theft’. Said Mr Seah: ‘Even if the consumer did not opt in for the insurance or there is an absence of insurance facilities, the bank should limit the loss to the consumer up to the credit limit amount, after which the excess should be the responsibility of the bank.’

Twenty-six cases involving stolen/lost credit cards were reviewed by Case since 2007.

ASSOCIATION OF BANKS IN SINGAPORE: Consumer, bank share blame

The Association of Banks in Singapore (ABS) said that with most banks, cardholders ‘are liable for transactions effected before the bank is notified of the loss/theft of the card’.

ABS, which regulates the Code of Consumer Banking Practice, said that without this there would be no incentive for customers to take precautions or report a loss imemdiately.

While different banks practise varying customer-liability provisions, ABS maintained that if the cardholder has taken every reasonable precaution, including immediately reporting the loss of a card and no negligence is involved, the cardholder is not liable for any unauthorised purchases.

Added ABS: ‘Both parties (the bank and the cardholder) must take responsibility for its use.’


Said Singapore Retailers Association (SRA) executive director, Miss Lau Chean Wei: ‘We have to bear in mind that in any business, and whichever business model is adopted, someone has to bear the cost.

‘For example, if the banks are bearing the cost, the card-holder may end up having to pay higher annual subscriptions, or higher interest rates, etc.

‘If the merchant has to bear the cost, they may factor in this risk in their cost of operations, and the cost may be passed on to the consumer in the form of higher prices.

MAS : Consumer, bank share blame

Said a Monetary Authority of Singapore (MAS) spokesman: ‘MAS believes there should be an equitable allocation of liabilities between the customer and the bank when credit card theft occurs.’

MAS cautioned, however, that ABS ‘should carefully review the current Code of Consumer Banking Practice and individual bank’s practices to ensure this’.

According to MAS, the code ‘should provide clear incentives for both parties to act responsibly in the interest of preventing fraud and credit card misuse’.


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