Defrauded! No help from CC company

diamonddogsuk

A couple of months ago a family member stole our card and PIN number and withdrew a few bits of cash off it. The card issuer called my husband because there was no activity on the card since it was issued to him, and we agreed we'd deal with it as the debt was manageable for the family member to repay. The card was cancelled, with the promise of another new card in the post.

A week or so goes by and we realised we hadn't received the replacement card, so OH calls them again only to find the card was sent out, had been activated, and a couple of grand in cash withdrawals had been made on it. The card issuer (MBNA) sympathised and gave us the choice of paying it back or reporting the card as stolen to the police, the implication being that if a prosecution was successful we wouldn't be liable for the debt.

After a good deal of heart searching, we decided that the family member needed to learn that you don't steal from family and we very reluctantly involved the police.

Fast forward to Friday, the family member presented himself at the police station rather than wait for them to arrest him at his workplace (we asked him to leave the family home and had no idea where he was staying so this was the only way they could get hold of him) as we wanted him to be taught a lesson, not ruin his life.

He was interviewed but not arrested, and the officer called my OH on Friday to explain the options - one of three things could happen: a) a caution; b) formal charges or c) we (the victims) opt for restorative justice, which basically means we draw up an agreement for repayment, and the moment he defaults he would be arrested. The ball was left in our court and we expect the officer to call to see what we've decided.

Meanwhile, my OH called MBNA on Saturday morning, and discovered that they will continue to take repayments from our bank account, and interest will continue to be charged on the balance. Both the fraud department and debt management say that they won't freeze payments or the interest until this is sorted out, and as far as we can make out, the debt will only wiped if we have the family member charged, and this is the best bit, a conviction is secured. This is the family member's first offence, so how likely is that?!

Obviously I'm really upset about this, because it goes against everything I believe in to call the police to one of your own (serious crimes excepted of course) so it took a hell of a lot to do it, and now we find that we still end up with a £3000 debt that's not of our making and we're technically liable for.

All this notwithstanding, I'm yet to receive the answer to the question of how this card was activated by someone who knows very little about us from a security question point of view (Capital One made me jump through all sorts of hoops to activate my new card a week or so back), and he claims he was able to retrieve the account password online!!!!

What's going on with MBNA? We were given incorrect information when we first reported the fraud, in spite of there being history of the card previously being used fraudulently they activate the new card with hopelessly inadequate security checks, and then tell us that someone (ie my OH, as the cardholder) has to pay daily interest charges on a debt incurred as a result of theft.

Can anyone please offer any help and advice as to what we do next?

ILW

What did your thieving relative do with the money, can they not return it to you and you can settle the account.

CLAPTON

I'm sure you are an honest and decent fellow but one can undertsand why a CC company might not fully believe the tale.

RadoJo

In fairness, I can see why they want to see a prosecution before writing off the debt, otherwise a person could run up an overdraft, report the card stolen and then finger any poor unsuspecting person as the culprit. If the police were unable to make a case against this person, then the card company have just lost thousands of pounds.

Is there any reason why you are not pursing it with the family member who stole the money from you? Whilst I agree that it might seem overly easy to pass their security checks, it doesn't really address the fact that the person who stole the money seems to be 'getting away with it' in terms of actually taking responsibility for repaying what they took.

The only other option would be to pursue a conviction - you seem to think that this is unlikely, but is that because the family member concerned is denying their liability in all this or because you don't want to go that far? To be honest, if the family member isn't prepared to pay you back, including all charges etc, then I don't see why you would want to be in debt to protect them from conviction, but obviously that's based on an objective viewpoint, and I do appreciate that it can be hard to do so where family's involved.

Littlesusie_2

I would ask MBNA to find the recording of the phone call in which you family member activated your OH card. This will prove if the questions asked were significant enough to prevent fraud and if the answers to the questions were correct and finally if the voice is that of your other half or not. If they won't do it I'm sure the police have the authority to get it in help with the investigation.
As to the not shopping one of your own I think most people would agree that he has broken the ultimate rule of don't s**t on your own doorstep. If he/she can break that rule then they have no right to expect loyalty from you. Trust and loyalty is not an automatic right just because you are related. They have stolen from you twice and personally I think 1 chance is more than enough. The only way the CC card company are going to believe your story is if you have this person charged.
The credit card companies T&C's will also state that you must keep your pin secret and not to have a written record, therefore as your family member stole the pin then it is not unreasonable for the CC to assume that it must have been written down or disclosed to someone. Only when someone else has been found guilty of the crime will they realise you from the debt as they believe you broke the T&C's. It's harsh for you but if they relented in every case like this then we would all have to pay for it through our interest rates

chattychappy

I disagree with the analysis so far. I don't think you should go down these routes any further.

The starting point is were these transactions carried out by the cardholder(s) or not? It is for MBNA to prove that they were - see paras 114, 115 of the Lending Code which MBNA has subscribed to. Note also that para 112 makes it clear that the customer will be not be liable if the card is used before receipt by the customer.

Given the involvement of the police, it would be very difficult for MBNA to prove that they were made by the cardholder.

The exception to this is whether the customer acted "fraudulently or with gross negligence" (paras 112 and 114).

It was probably negligent to have allowed the PIN to be known to the family member in the first place. But this was rectified and you covered MBNA'a loss in this respect. You fully disclosed what happened and the card was cancelled. We don't know what security checks were carried out by MBNA when replacing the card and it seemed they didn't change the PIN. Or maybe they did change the PIN and the advice was sent in a way that could be intercepted. Whilst this might have been foreseeable, I do not see how you could have been gross negligent in allowing this to happen. It's certainly not your job now to investigate what happened. You have shown candour and acted with good faith at all times. Evidence of this is involvement of the police and removal from the home. There is no need for you to establish that MBNA's security procedures may have been flawed.

This only leaves the question of fraud by the cardholders - this is very difficult to establish in law. Again, it's for MBNA to establish, not for you to disprove. Very difficult against this background IMHO.

I would add that MBNA were always free to decline sending a replacement card in the circumstances. That is what risk assessment is about - risk includes risk of fraud. The risk is theirs.

So I would write a letter to MBNA. Keep it simple, but refer to the Lending Code. The transactions were not made by you or on your behalf. Quote the police report reference. The police appear to be satisfied that the transactions were fraudulent and accordingly you expect your account to be credited forthwith.

As for the police consulting you about what action to take against the culprit, this is jolly decent of them and in many ways you are a victim. But MBNA must ultimately bear the cost of this - so they are the "real" victim.

Acceptance of a police caution is an admission of guilt. That would be handy, but not essential in getting this resolved. It maybe be unwise to request that the police take or avoid a particular course of action. Perhaps MBNA would like to say what they would like the police to do.

You may wish to make payments to MBNA in the meantime just to reduce the hassle of reversing negative CRA reports later.

It is for MBNA to take a civil action against the family member if they wish to recover the money.

Jammi

The options laid before you by both the Police and MBNA appear to be perfectly reasonable.

Its up to you and your partner to make the difficult choice. One could cost you money, the other a family relationship. Inspite of their reputation, MBNA have done no wrong in your situation. It wasn't wise to accept MBNA offer of a replacement card when you had not removed the risk that led to the initial theft, i.e your relative's access to the card. Activating the card itself would require information that your relative would have known or been able to find out, such as date and place of birth, and mother's maiden name.

MBNA's insistence on a conviction in order to wipe the debt makes the police option of a caution pretty much redundant in your case, unless you are prepared to take on full responsibilty for this debt. Even as a first offence, your relative will receive a conviction if found guilty. The fact that it is a first offence may affect the sentence he receives not the determination of guilt.

The police option of restorative justice appears to me as the best way forward. Get the relative to pay the debt, including the interest. If he defaults (somehow I think he will ), fall back on the open option of arrest and charges. That way you would have given him a fair chance to redeem himself.

bengal-stripe

Why do these extraordinary tales only happen to new posters?!?

"Curioser and curioser" said Alice.

chattychappy

Jammi wrote: »

The options laid before you by both the Police and MBNA appear to be perfectly reasonable.

See
http://www.thisislondon.co.uk/news/article-23390837-fraud-victims-told-go-to-the-bank-not-the-police.do

The police have responded with good intention and compassion perhaps, but they have failed to identify the "true" victim. See the article above about who is to be treated as the victim. It may seem harsh, but it is logical. Failure by the police and MBNA to "get this" is at the root of this matter.

It is not an issue of "options" from MBNA. It is a question of cardholder liability as per the Lending Code. This was drawn up to reflect law and FSA guidance. I suggest the OP looks at http://www.lendingstandardsboard.org.uk/docs/lendingcode.pdf, pars 112 to 115. It is very clear.

Jammi wrote: »

Its up to you and your partner to make the difficult choice. One could cost you money, the other a family relationship. Inspite of their reputation, MBNA have done no wrong in your situation.

MBNA HAVE done wrong. They are raising the spurious issue of needing a conviction before they will accept that liability is not with the cardholder. This is misrepresenting the position in law. They must be able to prove that the transaction is genuine. They cannot select a different level/burden of proof. I doubt whether MBNA has said this in writing. If not, they should be asked to do so. Then even better for the OP because it's evidence that they are not treating the cardholder fairly - something the FSA requires them to do. (TCF initiative.) My guess is that compliance will stop such an assertion being made in writing.

Jammi wrote: »

It wasn't wise to accept MBNA offer of a replacement card when you had not removed the risk that led to the initial theft, i.e your relative's access to the card. Activating the card itself would require information that your relative would have known or been able to find out, such as date and place of birth, and mother's maiden name.

Irrelevant. MBNA issued the card and it was used before it was received by the cardholder. It is for MBNA to ensure adequate procedures are in place. Clearly those procedures failed and this exposed them to risk. Whether it was wise for a new card to be issued is a matter for MBNA, not the cardholder. Yes, perhaps with hindsight alot of hassle could have been avoided. But liability for what has happened doesn't depend on whether the OP was wise or not. Not being wise is not being gross negligent.

Jammi wrote: »

MBNA's insistence on a conviction in order to wipe the debt makes the police option of a caution pretty much redundant in your case

They have no basis to insist on this. They must prove that the cardholder made the transactions or was grossly negligent or fraudulent. This is the legal position. A caution (admission of guilt) or conviction obviously helps the OP, but neither are necessary.

Jammi wrote: »

The police option of restorative justice appears to me as the best way forward. Get the relative to pay the debt, including the interest.

I would not enter any discussions about this. It is "going along" with a fundamental misunderstanding by the police of the position - understandable given the helpful approach by the cardholder. They seem to be treating it rather as if the relative stole money out of the cardholder's handbag. The money has been stolen from MBNA, not the cardholder. The cardholder is a potential witness. This crime is a s2 offence under the Fraud Act 2006 - fraud by false representation. CPS charging practice is at http://www.cps.gov.uk/legal/d_to_g/fraud_act/. The representation was made to MBNA (eg by using a PIN or giving the card details over the phone), not the cardholder. The police should refer to the CPS if in doubt.


Summary: it seems that MBNA are setting the agenda, with the well meaning but slightly confused police close behind. I feel strongly that the OP shouldn't be lulled into this "vision" of what has happened.

All that is relevant to the OP is the issue of civil liability between them and MBNA. What to do about criminal liability is a matter between the police, the relative, and MBNA. These issues should not be blurred in order to let MBNA off the hook.

diamonddogsuk

bengal-stripe wrote: »

Why do these extraordinary tales only happen to new posters?!?

"Curioser and curioser" said Alice.

Your point being????

Is advice only available to people with hundreds of posts under their belts then? I'm sorry, I didn't realising I was intruding on a private party.

Lots of good advice coming, for which I'm grateful. There's a few unnecessary comments, accusations and misunderstandings, but on the whole it's useful.

opinions4u

diamonddogsuk wrote: »

Your point being????

Is advice only available to people with hundreds of posts under their belts then? I'm sorry, I didn't realising I was intruding on a private party.

Lots of good advice coming, for which I'm grateful. There's a few unnecessary comments, accusations and misunderstandings, but on the whole it's useful.

You are an exception to the rule. These pages are excellent on the whole. Unfortunately long winded tales of "I was conned" or "bank robbed me" or "mis-sold loan" are common from people who mysteriously post once and disappear. In other words they are trolls who have made a story up and enjoy reading the responses their story has generated.

Back to the subject in hand though. I think Chatty has provided some excellent information and it's worth following through.

I don't know why the police are involving you in prosecution options. MBNA will, eventually, be recorded as the victim of crime here, not you.

Get back to MBNA and pursue a claim for fraud. As for your relative? I hope he gets everything he deserves.