Insights for consumers
Multi-factor authentication can help protect consumers from unauthorised activity on their credit card accounts. To verify that a consumer is the person making an online purchase, some card providers send a one-time code to the consumer’s phone for them to authorise the purchase by entering the code for the payment to go through.
Carefully review all items before entering a one-time code to authorise a payment. If you approve a transaction by entering a code, you won’t later be able to claim it was not authorised.
What happened?
Sione’s card provider contacted him to query transactions that appeared unusual. Sione said that he had been charged for transactions on his card that he did not make. The card provider’s fraud investigation found that Sione had entered a one-time code, sent to him by SMS, into the payment page of the merchant to authorise the payment.
The card provider’s terms and conditions set out the process for cardholders to dispute unauthorised transactions. The card provider noted that although Sione did not mean to make all the purchases, by entering the one-time code in the payment page, he had authorised them. This meant he could not dispute them as ‘unauthorised’ transactions.
The card provider said that Sione could contact the merchant directly to request a refund for the transactions he did not mean to make. Unfortunately, Sione had found the merchant via social media, and he could not remember how to contact the merchant again.
What were the parties’ views?
We agreed that Sione authorised the transactions. Even if he was confused about what he was buying, he could not rely on the chargeback for unauthorised transactions in the card provider’s terms and conditions.
While we empathised with Sione’s disappointment at having to meet the costs of purchases he did not mean to make, it was not fair to hold the card provider responsible since Sione had authorised the purchases by entering the codes sent to him.
What was the outcome of FSCL’s investigation?
As a gesture of goodwill, the card provider offered Sione $500 towards the disputed transactions. Sione accepted and decided not to pursue the complaint.
