Credit Cards-Devil within

A friend of mine had a very interesting experience with his credit card. Cards were stolen from bags left outside front door of his flat [this is an interesting story which I may write about one day]. The cards were misused that night itself and the next day. He did not go out for two/three days. The credit card operator telephones him to confirm some transactions which were suspicious according to them. He immediately informed all the concerned Companies about loss of cards.

Now as per requirement of the Company he went to the local Police Station to register the FI R. Police agreed to register the FIR only when told that card was used at an ATM in Pune [ruling out the train] and since the purse was not taken the theft cannot be in the bus[no pickpocket will put the purse back]. The most likely place of theft was outside the flat when the bags were left unattended. The credit cards had been used at various locations for about Rs 40,000. The issue has not been resolved yet, however it made me wonder whether his experience was unique or others are also facing similar problems. I am sure many are.

Problem is who pays for Rs 40,000 for which the cards were used. Everyone I have asked this question without hesitation says it has to be paid by my friend. This does not appear fair to me. In a situation like this there are three main stakeholders

1. The Bank which issued the credit card.
2. The credit card holder.
3. The commercial establishment which accepted the card in lieu of cash.
   

All three stakeholders are benefiting from the use of the card and hence have an obligation of trust and fair play towards each other. The Agreement which each stakeholder signs have to be within this perimeter. Unfair advantage by any stakeholder will invoke the Consumer Protection Act. Amongest all three stakeholders the commercial establishments have the most crucial role to play. Misuse of credit cards is not possible if laid down procedures are followed by all stakeholders.

This in short means that No 2 should inform No1 the moment the card is stolen. No 1 should block all transactions thereon. The main success would depend on No3. Why? The credit card consist of two parts- the physical part and the signature part. Commercial establishments would check the signature on the charge slip with that on the card and only then accept it as payment.

We know that the level of expertise available at the premises of No3 cannot identify 'good' forgeries. But to expect the expertise of a reasonable prudent person in matching the signatures cannot be faulted. Unfortunately this is not being done. We all must have noticed or can notice now, that normally the credit card is returned to us along with the charge slip for signature. In such situation even a causal glance at the signatures is not possible. No1 expects No2 to pay for all cases irrespective of blatant crude forgeries or still worse, no signatures at all.

The question arises why is No1 reimbursing No3 in such cases and demanding payment from No2. Simple answer would be that two business groups are joining hands to take undue advantage of the helpless unorganised No2. This would become an issue once the proposal to create an all India data-base of all loan takers is in place. No2 would be forced to succumb to the dictates of No1 as otherwise he is likely to be blacklisted by all loan giving agencies. If this is not the reason then what can it be?