Unauthorised transactions

Declan used his travel card during an overseas trip in 2016. The card still had funds loaded on it when Declan returned to New Zealand, but Declan put the card away, intending to use it again on a future trip.

In June 2019 Declan became aware that a total of $706 had been withdrawn from his card account during 2017. Declan told his travel card provider that unauthorised transactions had occurred, but the provider declined to reimburse Declan. The provider said that, under the card’s terms and conditions, Declan was obliged to notify it of the unauthorised transactions within 30 days of the transactions occurring.

 

Dispute

Declan said it was unreasonable to expect him to check his card account every 30 days while he was not using the card. He only became aware of the fraudulent transactions in mid-2019 and had notified the provider within 30 days of becoming aware of the transactions.

The provider said that because Declan only advised it of the unauthorised transactions 21 months after the fact, the timeframe in which the provider could investigate the unauthorised activity had expired. The provider said unauthorised transactions had to be reported within 30 days of the transactions occurring. The travel card provider also said that Declan could have checked his balance from time to time online, or by telephone, and could have become aware of the unauthorised transactions much earlier.

 

Review

We looked at the provider’s terms and conditions and noted that the terms relating to notification of unauthorised transactions were ambiguous.

The terms and conditions said, in one place, that a customer would be liable for an unauthorised transaction if they had failed to notify the travel card provider on becoming aware of a transaction on the card which they did not recognise. A separate clause in the terms and conditions said that the customer must notify the travel card provider within 30 days of the relevant unauthorised transaction occurring.

It was clear that Declan had advised the travel card provider of the unauthorised transactions within 30 days of becoming aware of them. The second clause in the terms and conditions stating that unauthorised transactions had to be reported within 30 days of the date of the transaction contradicted this.

Given that there was an ambiguity in the card’s terms and conditions, we applied the doctrine of contra proferentem. That is, we preferred the interpretation of the terms and conditions that favoured Declan, because he was the party who did not draft the contract.

 

Resolution

We recommended that the provider reimburse Declan for the unauthorised transactions (a total of $706). The provider accepted our recommendation and the complaint was settled.

 

Insights for consumers

It is a good idea to regularly check the balance of your card accounts, even if your card is not used regularly. As soon as you become aware of or suspect that there has been unauthorised use of your card, you should report the unauthorised use immediately to the provider.

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