Credit card disputes may be referred to FMB

Credit card disputes may be referred to FMB
Thursday, 09 July 2009 07:50am
©The Sun (Used by permission)
by Giam Say Khoon


KUALA LUMPUR (July 8, 2009) : Credit cardholders not happy with bank investigations into disputes over fraudulent transactions, may refer their cases to the Financial Mediation Bureau (FMB), Deputy Finance Minister Datuk Chor Chee Heung said today.

In replying to a question from Senator Datuk Daljit Singh Dalliwal, Chor said whenever there is a dispute over unauthorised transactions, the credit card issuers will conduct a thorough investigation to ensure that the complaint is real.

“However, if the cardholders are not happy with the results of the banks’ investigations, they can refer to the FMB, which was established by Bank Negara in 2005 as an independent body to help resolve disputes between consumers and financial service providers.

“If cardholders are still unsatisfied with the decision of the FMB, they may choose to take legal action to resolve the dispute. However, banks issuing the credit cards will need to accept the decision of the body,” he said.

Daljit had in his question accused Bank Negara of not enforcing the guidelines for fradulent credit card transactions.

He also posed a supplementary question as to why authorities did not order banks to stop a transaction when they knew that it was a fraudulent one.

In reply, Chor said the banks cannot be blamed for all credit card fraud because cardholders’ negligence contributed to the number of cases.

“Therefore, Bank Negara has a set of guidelines and a system that allows for investigations to be carried out. If the cardholders are not happy with that, they can go to the FMB,” he said.

Chor added that of the 11 million credit cards issued in Malaysia, only 541 cases of fraudulent transactions were reported.

On second supplementary question by Senator Datuk Rizuan Abd Hamid, Chor said the Bank Negara cannot stop a financial institution from issuing credit cards. However, credit cards would only be issued to applicants who meet the three major requirements, namely a minimum monthly salary, as well as good credit standing and payment record.

He added that Bank Negara monitors credit card issuers to ensure that the guidelines are followed and that the central bank has the power to act against the financial institutions that fail to do so under the Payment Systems Act 2004.