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PIN compromised and card stolen while travelling overseas

PIN overseen?

One evening, while travelling alone through the Ukraine, Craig met a group of international travellers at a café. After enjoying an evening together, they invited him to go with them to a nightclub. The doorman explained they would need to pay the entry fee in cash, and pointed Craig to an ATM where he could withdraw some money. Craig’s first withdrawal attempt was unsuccessful, but on the second attempt he withdrew some money, paid the doorman, and entered the nightclub.

Shortly after arriving, Craig was approached by a man who had heard his accent, discovered he was from New Zealand, and struck up a conversation about Lord of the Rings. The man bought Craig a drink and they spoke for a little while. Craig then went to dance with his friends, who also bought him a couple of drinks.


Card stolen?

The man approached Craig again, and asked him if he would like to get another drink at a bar across the road. Craig went with the man, and after having a couple of drinks at the other bar, decided to re-join his friends. When the nightclub doorman said Craig would have to pay another entry fee, Craig decided it was time to call it a night and return to the backpackers’ hostel where he was staying.

When Craig checked his wallet, he discovered his card was missing. At this point Craig began to feel quite unwell. Craig acknowledged that he had been drinking, but said he felt more than just drunk and thought his drink may have been spiked. Craig knew he had to return to the backpackers’ hostel, and report his card as stolen.


Craig attacked

Craig’s night out went from bad to worse. While walking back to the backpackers’ hostel, Craig was set upon by two men. He was beaten, robbed of a family heirloom ring, and his mobile phone. When Craig regained consciousness the next day he called the police, returned to the backpackers’ hostel, and called the card provider to cancel his card.


$15,000 stolen

Before Craig’s card was cancelled the thieves were able to withdraw about $15,000 from his account either in cash or by buying goods at a department store. Craig asked the card provider to reimburse the money stolen from his account.

When the card provider declined to reimburse Craig, he complained to FSCL.


Travel card provider’s view

The card provider said Craig’s card and PIN had authorised the withdrawals. The card provider also pointed to the two-hour delay between Craig’s last transaction and the first disputed transaction, saying it considered it unlikely he had been overseen by a thief entering his PIN.


Craig’s view

Craig considered he was most likely overseen entering his PIN at the ATM outside the nightclub, and that the man who bought him a drink shortly after entering the nightclub was trying to steal his card. Craig was unsure about whether the men who attacked him were connected with the first man, but in any event said that the attack prevented him from notifying the card provider his card had been stolen until the next day.



We considered Craig had been the unwitting target of well-organised criminals, and that the card provider’s terms and conditions obliged it to reimburse the loss. It seemed to us most likely that Craig was overseen entering his PIN at the ATM before entering the nightclub, and that the man who approached him was looking for an opportunity to steal Craig’s card. The delay between the last genuine transaction and the first disputed transaction could be explained by the thief not being able to steal from Craig on the first opportunity, prompting him to invite Craig for a drink at another bar where he was able to steal the card.

We also considered that Craig had reported the theft of his card as soon as reasonably possible. Unfortunately, the attack delayed Craig reaching the backpackers’ hostel, and he could not have reported the theft any earlier.

However, we also considered that Craig may have contributed to the circumstances allowing his card to be stolen. Craig acknowledged he had been drinking for many hours, and we considered the alcohol consumption may have contributed to his carelessness.



We recommended that the card provider reimburse 75% of the funds stolen from Craig’s account. Craig accepted our decision and the complaint was resolved on this basis.


Key insight

Provided the evidence available to us indicates the cardholder has not breached the terms and conditions with respect to the care of card and PIN, the travel card provider will be liable to reimburse loss suffered, not because the travel card provider has done anything wrong but because the travel card provider is contractually liable to do so.

We will take into account any contributory fault by the cardholder such as in this case, where we thought that excess alcohol may have impaired the complainant’s judgment.