Unauthorised Online Transaction - Delay in Submitting Dispute Form

Adjudication by Ombudsman


1.       The Complainant is a principal credit cardholder of the Bank while his daughter holds a supplementary card thereunder.

2.       On 20/11/2017 around 7.30 pm, upon receiving several SMS messages from the bank, the Complainant discovered numerous unauthorised online transactions collectively amounting to the sum of RM7,335.35 charged his supplementary card. He immediately contacted the bank to block his card and it was cancelled accordingly.

3.       The Complainant contended that the supplementary card remained in his daughter’s possession and that she did not performed the said unauthorised online transactions.

4.       However, the chargeback period of 120 days had lapsed by the time the Complainant completed and submitted the dispute form eight and a half months later.

5.       The bank insisted that since the dispute form was received after the 120 days chargeback filing window, they were unable to process the refund. Nevertheless, the bank was able to recover the sum of RM109.25 from the Merchant through the acquiring bank.

6.       The complainant was not satisfied with the bank's decision as he wanted the bank to waive the remaining balance of RM7,226.10.


Investigation and Findings

1.       The disputed transactions were performed online through the merchant’s non-Three Domain (3D) secure platform which is approved without the need for authentication of the One Time Password (OTP).

2.       The bank received the Complainant’s call on the unauthorised online transactions on 20/11/2017 and thereafter his card was blocked immediately.

3.       The bank issued an auto-generated letter to the Complainant advising him to fill out and return the dispute form within 20 days from the statement date according to clause 5.2 of the card agreement which reads as follows:


“The records and entries in the Cardmember’s Card Account with the Bank as appearing on the monthly statement of account shall be deemed to be correct and binding on the Cardmember unless written notice to the contrary shall have been given to the Bank within Twenty 20 days from the Closing Date of Billing Period as stated on the statement of account”. 


4.       The bank alleged that chargeback can only be proceeded upon receiving the dispute form signed by the Complainant.


Adjudication and Reasons

The Ombudsman revised the bank’s decision and in applying the principle of fair and reasonableness, the sum of RM7,226.10 was awarded to the Complainant on the following basis:


  1. The Complainant had informed the bank of the unauthorised transactions immediately on 20/11/2017 and the bank was aware that the Complainant had disputed the transactions.
  2. The dispute form only serves as a formality for the bank to proceed with the chargeback. Given that the chargeback validity period is crucial, the bank should have followed up with the Complainant for the return of the dispute form.
  3. There was no evidence of any follow up by the bank to request the Complainant to return the dispute form which led to the delay.