I REFER to Tuesday's report, 'Credit card stolen? Mind the pitfalls'. By stating the obvious, that consumers can choose credit cards from banks that offer satisfactory terms, the Consumers Association of Singapore (Case) did not answer a question in the report as to whether this practice of holding customers responsible is fair or not.

Credit cards are mostly marketed by non-financial planners. These salesmen do not explain terms to customers. They simply focus on the waiver of annual fees and free gifts to get customers to sign up.

In fairness to customers, Case could have suggested the following:

• Allow only qualified financial planners to promote credit cards. As in the sale of any financial product, financial planners are bound by a code of ethics to highlight terms and conditions so customers can make informed choices, and there is transparency of product risks and benefits.
• Merchants should have some responsibility in credit card fraud. Holding them responsible for, say, 20 per cent of the cost would keep them on the lookout for fraud.
• Convert all credit cards to photo cards.
• In credit card transactions via Internet or phone, CVV numbers are not sufficient as they are found on the back of the cards. Credit card holders should be given a password they can change at any time on the Internet.
• Encourage credit card holders to buy credit card fraud insurance to limit their liability in non-authorised transactions.
• Impose a heavy punishment on anyone who tries to cheat on credit or debit cards.
• In transactions involving more than $5,000, the credit card company should call the credit card holder to verify the transaction.

Dr Harry Koh

This article was first published in The Straits Times.