O2 Phone Stolen and £600 unauthorised call charges

Silk

zagfles wrote: »

You're misreading that. It's saying the liability for the first £50 (in the case of negligence) or the whole lot (in the case of giving the card voluntarily to someone) is not specified by the CCA but can be specified in the T&Cs (and of course invariably will be).

I didn't misread it as I quoted before the liability still remains with the cardholder as per the T&C's ....

But they can be made liable for:

• losses arising from the use of a credit-token by someone who obtained possession of it with the cardholder’s consent; and
• the first £50 of any losses caused by the cardholder’s gross negligence in the care of their card or security details.

In the last two instances, however, the relevant part of the act does not impose liability – it simply allows the card issuer to do so. Whether or not a cardholder is liable in any particular case is likely to depend on the account terms.

The banks will then take proceedings to recover the money if they feel the holder has been negligent and it still stands

The LSB reveiwed the situation last year and still upheld the banks refusal to pay out
http://www.ft.com/cms/s/2/c0dad09c-5187-11e0-888e-00144feab49a.html#axzz22TF6JwQS

You will see it even gives an example of a woman taken to court for £2100 withdrawn on her card

LSB report for unauthorised credit card transactions here ...
http://www.lendingstandardsboard.org.uk/docs/Themed%20review%20of%20unauthorisedcredit%20card%20transactions%20February%202011%20FINAL.pdf

The £50 loss limit is applicable but only when the banks can't prove negligence, if they do it's game over I'm afraid

zagfles

Silk wrote: »

I didn't misread it as I quoted before the liability still remains with the cardholder as per the T&C's ....

Yes, you did. If it's unclear, try this bit:

[FONT=Verdana, Arial, Helvetica, sans-serif]What the Banking Code fails to say, and what some firms appear to overlook, is that using a card to create or increase an overdraft makes it a credit token for the purposes of the Consumer Credit Act 1974. This means that the customer’s liability for unauthorised withdrawals is limited to £50, even if the customer was grossly negligent. [/FONT]

And this:

Where the Consumer Credit Act, the banking code and the account terms do not say the same thing:

• the act takes precedence over the code and the account terms; and
• the code takes precedence over the account terms.

So because the act says that liability for unauthorised use of a credit-token is limited to £50, a firm cannot use the cardholder’s negligence in caring for the card and security information as its grounds for seeking to make the cardholder liable for more than £50

The banks will then take proceedings to recover the money if they feel the holder has been negligent and it still stands

The LSB reveiwed the situation last year and still upheld the banks refusal to pay out
http://www.ft.com/cms/s/2/c0dad09c-5187-11e0-888e-00144feab49a.html#axzz22TF6JwQS

The LSB is an industry organisation and their lending code, just like the previous banking code above, doesn't fully reflect the law. As the financial ombudsman points out above. The law trumps whatever they say, just like it trumped the banking code.

You will see it even gives an example of a woman taken to court for £2100 withdrawn on her card

Firstly it doesn't say whether it was a credit or debit card. Secondly 2 of the 3 reasons the judge supposedly gave would also apply to a credit card, ie if the customer had made the withdrawal or authorised someone else to make them then the customer is clearly liable for the whole lot.

LSB report for unauthorised credit card transactions here ...
http://www.lendingstandardsboard.org.uk/docs/Themed%20review%20of%20unauthorisedcredit%20card%20transactions%20February%202011%20FINAL.pdf

The £50 loss limit is applicable but only when the banks can't prove negligence, if they do it's game over I'm afraid

Tell the financial ombudsman they are wrong then, if you understand the CCA better.

In any case - it's a bit of a moot point. As the article proves, being careless with the PIN is never a good idea since the use of the PIN can be deemed evidence not necessarily of negligence, but of your authorisation (ie the bank can say you made the transation or authorised someone else to). In these cases, you are always liable.

Silk

zagfles wrote: »

Firstly it doesn't say whether it was a credit or debit card. Secondly 2 of the 3 reasons the judge supposedly gave would also apply to a credit card, ie if the customer had made the withdrawal or authorised someone else to make them then the customer is clearly liable for the whole lot.

Tell the financial ombudsman they are wrong then, if you understand the CCA better.

In any case - it's a bit of a moot point. As the article proves, being careless with the PIN is never a good idea since the use of the PIN can be deemed evidence not necessarily of negligence, but of your authorisation (ie the bank can say you made the transation or authorised someone else to). In these cases, you are always liable.

Ok first of all it was a Credit Card, a Halifax one as it happens

Secondly the consumer did appeal to the Financial Ombudsman and his claim was rejected

Like I pointed out earlier the act allows a choke to be applied for the £50 limit but it doesn't stop the bank applying to the court's to recover the rest of the money and obviously in the case in question the Ombudsman agrees

zagfles

Silk wrote: »

Ok first of all it was a Credit Card, a Halifax one as it happens

Secondly the consumer did appeal to the Financial Ombudsman and his claim was rejected

The article states "...or by a third party who had found out the PIN because the customer had not acted with sufficient care to protect it – all of which the customer denies.". So the customer denied negligience, so wasn't using that as a defence.

Where the FO deems negligence on a credit token they uphold the complaint for anything over £50, as they clearly demonstrated in the examples. In cases where they think the customer authorised the transaction or authorised someone else to use the card, they don't.

The example you gave was not clear cut negligence at all so it proves nothing. But cling onto that if you want, I'm through trying to explain, the FO are quite clear what the legal situation is, if you don't believe them that's your problem.

cherryblossomchris

Have you contacted them about paying it back in instalments?