Holly’s handbag was stolen. It contained a preloaded card she had received as a gift. The card was similar to a gift card, but it was accepted by most retailers.
Soon after Holly’s handbag was stolen, she tried to call the company that managed the card to block it, but she was unable to get through to an operator. She then logged onto the company’s website, but the card block function would not work for her. Holly then emailed the company, asking them to block her card.
The company blocked the card the following day, after completing an identification process. By this time, the alleged offenders had spent around $1,000 of the preloaded balance.
The company offered to send Holly a new card, with the remaining balance that was left on the card at the time it was blocked, around $600.
Holly was not satisfied with this because she believed she had done everything she could to quickly block the card. She wanted the company to refund the transactions she had not authorised. She submitted a disputed transaction form which she found on the company’s website.
The company acknowledged the form but they did not respond to Holly within the timeframe they gave. Holly then complained to FSCL.
The company believed their offer was fair because, under their terms and conditions, they were not obliged to replace lost or stolen cards, or to transfer the balance from one card to another.
The company also said there was no issue with the card block function on their website, and that there were no chargeback rights available against the merchants (the retail shops) where the card had been used.
Holly wanted the unauthorised transactions reimbursed. She maintained that there was a problem with the card block function. If this had been working, the card would have been blocked earlier and her loss would have been much smaller.
We explained to Holly that if she declined the offer, and FSCL fully investigated the complaint and made a decision on it, it was possible that the outcome may not be as favourable as what the company had offered.
When deciding a complaint, we must take into account the terms of the contract between the parties. In this case, the terms and conditions said Holly could not get her money back if her card was lost or stolen, and that the company were under no obligation to replace a lost or stolen card, or to transfer a balance from one card to another. The company were doing more than what they were contractually required to do by offering to give her a new card with the balance left at the time the original card was blocked.
Holly decided to accept the offer after speaking with us about the terms and conditions.
Insights for consumers
We had considerable empathy for Holly. She was a victim of a crime and she had done all the right things to protect herself. She registered the card when she received it as a gift. This meant it was possible to put a block on the card if it was ever lost or stolen. When the card was stolen, Holly acted quickly to contact the company to block the card.
However, it was the nature of this type of card product that the cardholder may be left out of pocket if the card is ever lost or stolen.