Case Notes
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Credit cards - use of card overseas - ruined holiday - card not accepted by overseas merchants - compensation for inconvenience - factors to be assessed - deduction for customers failure to contact bank to make alternative arrangements
Ms S applied for and was issued with a Mastercard by the bank prior to her departure on an overseas trip in June 2007. The Mastercard was issued as a “sign only” card, and was not operable by use of a PIN or other electronic means.
During the period Ms S was overseas she was only able to use the card on four occasions. On other occasions the transactions were declined. As a result Ms S cut short her holiday and complained that the bank was aware or should have been aware that the type of card issued to her would encounter problems. She claimed approximately $17,000 for numerous expenses incurred as a result of her inability to use the card.
Upon receipt of the complaint the bank apologised and initially made an offer of a gift as settlement. When this was declined, the bank conducted further investigations, again apologised, and made an offer of settlement of just over $3,000, most of which was compensation for inconvenience. Ms S rejected the offer.
After investigation I found that there was no doubt Ms S had experienced difficulties using her Mastercard throughout Europe. The reason for the difficulties was not clear.
On balance, it was most likely that the problems were either caused by the merchants’ machines being faulty or by the incorrect card verification code being entered. The bank was not responsible for any problems associated with the merchant machines, as it had no control over the machines used by the merchants or the maintenance of those machines.
During her time overseas Ms S had attempted to resolve the problem by going to the Mastercard web site and some of the local banks in the areas she was visiting. However, she had not tried to contact her bank in New Zealand to rectify the problem.
The bank provided a reverse charges telephone service for its customers overseas. If Ms S had used this service the bank could have made alternative arrangements such as transferring funds to her Eftpos account or providing an emergency cash advance to resolve the problem. However, as Ms S had made no effort to contact the bank in New Zealand these options were not made available to her.
Giving these findings I concluded, and Ms S accepted, that the settlement offer made by the bank was reasonable.