You know the score, a payment appears on your credit card statement that you definitely didn’t make, you phone up your card issuer and under most circumstances, and normally pretty quickly… they realise that it wasn’t you that made the transaction and you are refunded within a few days.
So who actually pays to refund us consumers for fraudulent activity like this? It is actually an “acquiring bank”, the institution that ultimately pays the provider of the goods or services that you are buying with your plastic, and you pay back after however long. But you may be surprised to know that only one of these institutions is a common household name in the UK, as the High Street Banks for the most part just re-sell the services of the acquiring bank under their own banner. The acquiring banks in the UK are Streamline, First Data, Global Payments, Elavon and Barclaycard Merchant Services.
Fortunately for us consumers, credit card payments processed by Visa, MasterCard, American Express and Discover are subject to a “zero liability” policy – a guarantee that you will not be held responsible for any fraudulent charges. But it wasn’t always so. The first Bank of America cards issued back in 1958 had T&C’s that held the card-holder completely liable for ALL charges, including those resulting from fraud.
So I guess there is at least something that we should be grateful to the banks for!