The need for ver­i­fi­ca­tion

The Star Malaysia - Star2 - - INSIGHT -

ALARGE per­cent­age of the pop­u­la­tion owns credit cards. How ac­tively or ag­gres­sively the holder uses them is an­other mat­ter. Though con­cerns have been raised about credit card debts, is­suers of credit cards con­tinue to ac­tively pro­mote their us­age.

At one time, a credit card was viewed as a sta­tus sym­bol. How­ever, to­day the credit card has be­come a util­ity item.

Con­ve­nience aside, there is also the prob­lem of be­ing chased when a card­holder does not pay on time. One such card­holder nar­rates his ex­pe­ri­ence of be­ing called up by the bank when his pay­ment was over­due. He was not only re­minded about the pay­ment but also put through a se­ries of ques­tions per­tain­ing to per­sonal de­tails be­fore the re­minder was con­veyed.

The reader wants to know why the card is­suer – which refers to the rep­re­sen­ta­tive who called up on its be­half – can’t just ask the card­holder to pay up in­stead of putting him through a list of ques­tions? Af­ter all, the card­holder is not ask­ing for any additional or new fa­cil­ity or spe­cial terms.

A card­holder may feel that if he is ap­ply­ing for a fa­cil­ity or for bet­ter ben­e­fits or an in­creased credit limit, it may well be rel­e­vant to ver­ify his iden­tity. But if it is merely to ask him to pay up, what is the need for ver­i­fi­ca­tion?

Need to call

To start with, such calls when they are made and re­ceived, are due to the card­holder hav­ing de­faulted in his pay­ment. There­fore, one can also say that if pay­ment had been made at the ap­pro­pri­ate time as agreed, there would have been no such calls in the first place. It is im­por­tant for banks to as­cer­tain the iden­tity of credit card­hold­ers be­fore pro­ceed­ing fur­ther when mak­ing calls.

On the other hand, from the point of view of the card­holder, he may no doubt have de­faulted and is even­tu­ally go­ing to pay. In fact, he will be charged in­ter­est and per­haps other charges which may be sub­stan­tial, con­sid­er­ing the rate.

So from the point of view of the card­holder, any de­lay does not ac­tu­ally prej­u­dice the card is­suer. On the con­trary, it gen­er­ates more earn­ings. So why is there a need to go through all those ques­tions to con­vey a sim­ple re­minder?

Ver­i­fi­ca­tion

Whilst the card­holder may con­sider such calls as a ha­rass­ment, the card is­suer may con­sider it­self as be­ing kind to the card­holder and was us­ing the oc­ca­sion merely to re­mind the card­holder to pay up, in­stead of act­ing more harshly, what­ever that may mean.

Card is­su­ing or­gan­i­sa­tions may well re­alise the an­noy­ance fac­tor of a long list of ques­tions be­fore ac­tu­ally talk­ing about the over­due pay­ment. Such an­noy­ance by it­self may well serve a pur­pose in mak­ing the card­holder pay up promptly in fu­ture to avoid such calls.

How­ever, the card is­suer may have bet­ter rea­sons than this. What is ha­rass­ment to the card­holder may well be pru­dence in the eyes of the card is­suer in ask­ing for all per­sonal de­tails be­fore talk­ing to him about the over­due ac­count. This ac­tion is called ver­i­fi­ca­tion.

Herein lies the need to ver­ify. This is be­cause the card is­suer may very well call the tele­phone num­ber of the card­holder but some­one else may pick up the phone and re­spond at the other end. The card is­suer may there­fore be speak­ing to a third party and not the card­holder. They will then be giv­ing de­tails of the de­fault, the debt and the amount ow­ing to a third party. Such com­mu­ni­ca­tion to a third party may be defam­a­tory to the card­holder.

In the con­text of present day de­vel­op­ments and tech­nol­ogy, it is un­likely that such mis­takes will oc­cur. How­ever, the pos­si­bil­ity can­not be ruled out. Steps to ver­ify the iden­tity are there­fore a mat­ter of pru­dence.

Of course, if at the time the card­holder is in­deed in­debted to the card com­pany and has de­layed pay­ment, it is an­other mat­ter. In such case the state­ment, even though con­veyed to a third party, could be true and there­fore the de­fence of jus­ti­fi­ca­tion avail­able.

Obli­ga­tion

There is an­other as­pect to the card is­suer seek­ing ver­i­fi­ca­tion. Cards are to­day is­sued mainly if not in­vari­ably by banks and here the is­sue of the se­crecy obli­ga­tion may be a rel­e­vant con­sid­er­a­tion.

The card is­suer who has called the card­holder will nec­es­sar­ily need to give de­tails of the pay­ments made, cred­ited and due, if the per­son on the other side of the phone asks for them. Whilst the phone may be­long to the card­holder, the in­for­ma­tion may other­wise be dis­closed to a per­son who is not the card­holder. This could have civil and statu­tory im­pli­ca­tions.

Whilst the need for the card is­suer to ver­ify the iden­tity of the card­holder is im­por­tant, in many cases the card­holder also re­ceives calls from or on be­half of the card is­suer through un­listed numbers.

This cre­ates a risk to the card­holder that he may be dis­clos­ing per­sonal in­for­ma­tion to an un­known per­son. There­fore, it is also im­por­tant for the card­holder, while com­ply­ing with the re­quest for ver­i­fi­ca­tion, to pro­tect him­self. A card­holder should only give in­for­ma­tion rel­e­vant for the pur­pose of the credit card and noth­ing else.

On the part of the card is­suers, it would help their cus­tomers if a mes­sage could be left on the phone where pos­si­ble to ask the card­holder to re­turn the call about their ac­count.

At the end of the day, it can­not be de­nied that card­hold­ers who have used up their credit will need to pay. The card is­suer needs to get its money back. Ev­ery­one should make things eas­ier for each other to en­sure a bet­ter so­ci­ety for all.

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