Money Blog: Left High and Dry By Credit Card Firms
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Left High and Dry By Credit Card Firms
By Nic Cicutti
Jun 20, 12:26 PM
Ever had the experience of your credit card being rejected by a shop or a restaurant – and then discovering that you didn’t have the cash to settle the bill?
That’s exactly what happened to me earlier this week during a brief holiday in Sweden. Not just me in fact, but dozens of people I was travelling with, all of whom found themselves in similarly embarrassing circumstances.
Frankly, I was and still am livid about it and so was everyone else whose card, ranging from Barclaycard to Liverpool Victoria and First Direct, was rejected.
Basically, we were all heading to a vintage Lambretta scooter rally in Sweden. Many, though not all of us, had contacted our card providers to inform them that we were going abroad and would be using our cards on the journey.
Despite this, as the days wore on, one person after another had his card transaction refused, leaving him scrabbling desperately for cash. The rest of us ended up clubbing together to pay for their fuel with our working cards, or lending them money from our dwindling stash of cash.
In my case, initially I thought I’d got away with it. In fact, I was feeling pretty smug about it, until my Liverpool Victoria card was rejected at a restaurant as I was trying to settle a £40 lunch bill.
I should stress that the issue was most definitely not one of us not having enough credit. A quick call to my card issuer on my return confirmed this fact.
What is clearly happening is that card companies have been hit hard by a huge wave of overseas–linked fraud. Despite the introduction of chip and PIN cards, which were supposed to make life much more difficult for criminals, total losses from card fraud while abroad rocked by more than 85 per cent in 2007 to £207m. At £532m, total fraud is higher than it has ever been.
So the card companies are randomly many more rejecting “dubious” transactions, never mind that they are likely to be ruining many thousands of people’s holidays this summer. It seems that we are being made to pay for the fact that they are incapable of controlling our cards’ safe use.
Yet, these same issuers are offering credit to millions of consumers without asking for their financial details. According to the price comparison site uSwitch, 84 per cent of people successfully applying for cards in the past 12 months were not asked for proof of income, while 14 per cent were not even asked to give details of their salary on their application.
These institutions really ought to get their priorities right.
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