Monday, May 24, 2010

A letter worth reading

There is an interesting letter today (May 24) in the Today newspaper's Voices page
headlined, Why can't I terminate credit card Giro payments?, sent in by Charis Low.

I am reproducing it here for those who do not get a copy of the newspaper because I feel that this is something everyone ought to know.

Charis wrote: "I was shocked to discover recently that upon signing up for payment of recurring bills by credit card Giro, the cardmember cannot terminate the arrangement by giving instructions directly to the bank. The bank only takes instructions from the merchant and not its cardmembers. The only way for a cardmember to stop the arrangement is to cancel the card.

This is different from stopping Giro deductions from bank accounts, where the bank will stop payments to the billing organisation upon receipt of the customer's instructions.

I see no basis for the bank to refuse to accept the customer's direct instruction to stop the arrangement since:

1. The instruction pertains to future bills, and the bank has neither made, nor is under any obligation to make, payment to the merchant for such future bills.

2. The customer has a direct relationship with the bank and there is no reason why the bank should refuse to accept a direct instruction from its customer, but insist on taking instructions from a third party.

3. The Giro forms for payment via credit cards and bank accounts are not any different, with the customer required to only sign and provide details of the account from which payment is to be made in both cases. How then can the customer's authorisation in the case of credit card Giro possibly be construed as being irrevocable?

This practice, which they claim is in line with industry practice, compromises the rights and interests of customers. Why can't the bank leave the customer to sort out any payment due to the merchant separately?

I think card-issuing banks owe their customers an explanation as to the legal basis of this "industry practice" and how it comes about without it being articulated in the cardmembers' agreement.

I've read the agreement, including the latest version available through the bank's website, which is applicable to my credit cards, and there is no provision that states the cardmember cannot revoke any Giro authorisation by instructing the bank directly.

In the meantime, I would urge everyone to reconsider paying by credit card Giro."


  1. Hi, would like to share my experience with you please. My mum was misled by a famous travel agency into signing up for a tour package. I called Citibank to cancel payment but I was told that Citibank is unable to stop it. I had to go back to the merchant (the famous travel agency) and they had to RESOLVE it. I told Citibank, what if it's forgery? They said the SAME thing. What if it's stolen? They said to report card loss. So, eveyone pls take care of your very-fragile card...*not sure if all Banks are like that?*

  2. Anonymous, your mum's case is interesting. If you could provide me with more details, I am sure readers would be able to learn from it. Please give your name and contact number in case the bank would like to contact you.