The DAB on Monday called on the authorities to clearly define what constitutes gross negligence, to better protect credit card holders who have fallen victim to fraud.

Under the Monetary Authority’s (HKMA) Code of Banking Practice, a cardholder's liability for card loss cannot exceed HK$500 unless the individual is found to have acted fraudulently or with gross negligence.

However, the party said it has received dozens of complaints from people who had been ordered to pay for the fraudulent charges, after their card issuers concluded that they had been grossly negligent.

One complainant said that three of her credit cards were stolen last year, resulting in unauthorised transactions totaling hundreds of thousands of dollars.

She said although one of the card issuers had given her a reimbursement, another bank demanded that she repay more than HK$300,000 in charges.

DAB lawmaker Edward Leung said the HKMA does not have a clear definition of what constitutes “gross negligence”, and relies on individual banks to come up with their own definition.

“In a lot of circumstances, the victims are defined as grossly negligent and the victims have to pay for these kinds of fraud,” he said, adding that there's a need for more clarify in this area.

He urged banks to send out SMS notifications to cardholders if they detect any unusual spending patterns before allowing the transactions to go through.

Responding in a statement to the DAB's calls, the HKMA said that whether or not customers are deemed to be grossly negligent depends on the actual circumstances of each case, adding that it was was working with the industry to strengthen customer protection in card fraud cases.

"Where suspicious card transactions are detected, banks should promptly take appropriate actions (including notifying the relevant customers), submit suspicious transaction reports to law enforcement agencies, and actively collaborate with relevant investigations," it said.

"Whether a customer has been grossly negligent or not should be determined based on the actual circumstances of the case. Banks should examine the details of individual cases. Each case may have its own circumstances and may not be generalised."

On the increased number of complaints, the statement added: "The HKMA has followed up each complaint case, and requires the bank concerned to handle the complaints appropriately... The bank must also assist the Police in its investigation."
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Last updated: 2023-04-10 HKT 22:14