Tuesday 25 September 2007

Credit Card Negligence

Yesterday, I was checking my credit card balance and transactions using Visa's automated telephone system and noticed a charge of $1600 from Air Canada that I had not made. A worried call to the TD Visa security center and a review of recent transactions suggested that it wasn't fraud but negligence, both on Air Canada's part in submitting the charge under my card number and on Visa's part in accepting the charge with - obviously - insufficient validation.

Air Canada does not have my card details on file. The Visa rep could not tell me what actual validation took place, though I know it can have only been to accept the card number presented, i.e. no expiry date, name of cardholder, address or other details was required by Visa. Air Canada could not have had the full details, even using Aeroplan, since the card details that were stored on Aeroplan (not any longer, since they've now been erased ... at least, I think so; who knows whether Aeroplan has kept them anyway) included an old expiry date. So any transaction that would have referred to Aeroplan would have had the wrong expiry date and the transaction would/should have been rejected by Visa. Ironically, yesterday I did try to make a booking on Air Canada through the Internet using Aeroplan's old card details / expiry date and Visa rejected my genuine attempt to book on Air Canada.

The Visa ''I only deal with fraud'' rep then blithely told me it was my ''dispute with the merchant'' and I had to get in touch with Air Canada to get my money back. There was no question of simply cancelling the charge, even despite the fact that the charge is so recent that it hasn't appeared on my current balance due statement.

Huh? How does this happen? Any merchant with an account with Visa can simply supply your card number and Visa will stick any charge up to your credit limit on your bill? And on top of that, the error which you had no part in creating is one where you must chase after the merchant to get a reimbursement? Apparently so.

TD Visa's published security advice on this matter is vacuous and insultingly misleading:
''Check your monthly statement carefully and report billing errors to your credit card issuer as soon as possible and always within 30 days of the statement date.'' They neglect to add, ''so we can tell you to go fix them yourself.''

Incidentally, the incorrect charge by Air Canada was apparently a telephone transaction, not one via the Internet, so it isn't a question of online security. I learned this by contacting TD Travel Rewards, the travel agency connected to the TD Visa card, which I had phoned in trying to figure out what was going with the charge.

There, fortunately, the rep did help by contacting Air Canada and finding someone there who admitted that the charge was an error and who promised to reimburse my account within 48 hours (fingers crossed that it actually happens). Kudos to Sheng at TD Travel Rewards for outstanding customer service since she didn't have to fix it since the error had nothing to do with TD Travel but knew where to go and extracted the promise to reimburse me from Air Canada. A raspberry to TD Visa for its unfair policy and to rep Jomo for crappy customer service in refusing to do anything about TD Visa's negligence.

The big question is how to prevent this from happening again in future and short of cancelling all credit cards, I am a bit at a loss. Peripherally, it may help a bit to never leave any credit card details on any website or with any vendor. Having as low a credit limit as possible probably would help too but then, with too low a limit, what good is having a card?

Maybe some folks out there have some suggestions? Are some cards better than others or is this endemic to the way all credit cards run their operations? This website describes a system used for large scale fraud that appears to have similar holes to that which caused my problem. It's very scary, especially since the information on the website dates back to 2002 and one wonders if the banks and credit card companies have essentially made any improvements since. Has anyone else had this problem with Air Canada? Are some vendors better or worse than others and is there some list or website that tracks this?

Update September 30 .... Well, haven't I been surprised at the further developments! It turns out the original error was committed by TD Travel who used my credit card by mistake to pay for another family's travel booking. The error was compounded and abetted by both Air Canada and Visa, neither of whom bothered to verify anything beyond the correct card number and expiry date. All that rigamarole we go through as individuals for web bookings to authenticate ourselves apparently doesn't apply to travel agencies. TD Travel say they are very concerned about the slip-up and are investigating their internal processes. They agreed to give me some compensation (in the form of more of their travel points) for all my trouble. The compensation has now been provided, though my Visa account has not yet been credited for the actual ticket reimbursement.

It also turns out that Visa will look into a charge that a customer like me officially reports as not being their own. During several initial contacts, neither customer service nor security at TD Visa
mentioned this facility. Meantime, despite explicit recognition that it was a case of error not fraud, TD Visa still blocked my card for a few days till I phoned them back to ask the block to be lifted.

All in all, none of Air Canada, TD Visa or TD Travel comes out looking very pretty in this incident. We'll see if TD Travel chooses to make a public statement on this blog since I told them I would be writing about the outcome and offered to print their comments, should they have any.

Update Oct. 2 - My Visa has finally been reimbursed so I am ''whole'' again. Whew!

1 comment:

Anonymous said...

Interesting post.

I've had a few charges made "in error" on my card and never had a problem in calling the merchant (it never occurred to me to call Visa) and had the charges reversed.

In all three cases that I can think of, the merchants were someone that I had dealt with and they either charged twice for something or in one case they charged me for a service that didn't happen (but I had used them in the year previous).

Good luck with the $$!


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