ALKHOBAR, 1 June 2007 — As in other modern nations, Saudi Arabia is gradually shifting from cash payments to card payments. This is leading to an increase in credit card theft and fraud, and since the incidents of abuse aren’t being publicized, consumers don’t know that they should be on guard.
The first case that came to my attention on this subject involved an Eastern Province-based expatriate, whose credit cards had been issued on a European bank. One night the man noticed that two credit cards were missing from his wallet. He reported the theft to his bank, but it was too late. The thief had already spent SR10,000 on the credit cards.
According to the terms of the credit card agreement, the man was responsible for paying most of that money, since the charges to the cards had been made before they were reported stolen. The bank did oblige him by disclosing that the largest purchase of SR7,000 had been at a jewelry shop in Alkhobar. When the man went to investigate that purchase, he found that the jewelry store clerk knew the name of the man, a Saudi, who had used the credit card. The expat was shocked to learn that one of his colleagues had removed the two credit cards from the wallet when it had been left on the desk during the workday.
How could it be that an Arab used a credit card issued in a Westerner’s name? I discovered that it’s so easy to do. For the last month, my husband Muhammad and I switched credit cards. I went around town charging everything I bought. From the supermarket to the shopping mall, no one stopped me when I used “Muhammad’s” credit card to pay for my purchases. No clerk asked me for identification. No salesman even inquired if “Muhammad” was a relative. With my face covered, no one had a clue who I was — except that I certainly wasn’t Muhammad!
Reports of credit card fraud are becoming commonplace. One father explained how a supposed friend of his son had removed a credit card from his wallet and then used it to purchase mobile phones, which can be easily resold for cash. A woman forgot her credit card at a store after making a purchase. The card was used by someone else at several shops in the mall, until the card limit was reached.
In both of these cases the credit card holders were held liable for the purchases because they did not comply with the “Terms and Conditions” laid out by the respective card issuers. These terms and conditions vary widely. Many credit cards issued in the Kingdom come with the following stipulation: “The cardholder will be responsible for any unauthorized card transactions affected before written notice of the loss or theft has been received by the bank’s card center.” Some banks also demand police reports in cases of card theft.
I went back to the merchants who had accepted “Muhammad’s” credit card from me and questioned them as to why they had not declined to take the card or asked me for identification. Every one of them said that if the transaction is accepted by the electronic approval system, then the purchase is good. Plus, the clerks, all of whom were male, stated that they would never ask a woman for identification.
“Once I asked a Saudi man for ID,” replied Muhammad Shaife, a clothing store clerk. “The man became angry and accused me of treating him like a criminal. I quickly apologized but he just threw the goods at me and left the store. To this day I don’t know if I lost a sale or deterred a thief. When I discussed the situation with my store manager, he told me not to ever ask for ID.”
The clerks don’t compare the signatures on the credit cards with the signatures on the receipts either, although they do keep the signed receipts. The paper receipts are only turned in to the banks if they are requested or if a bank does not deposit cash for the purchase to the merchant’s account. In this last case, the signed receipt allows the merchant to show that an approved transaction was made.
“Debit cards are much safer than credit cards because a PIN must be entered before the transaction is authorized,” said Babu Shetty, manager of a small electronics shop. “Another problem we see a lot these days is with ‘void’ transactions. These are transactions that are not approved and the system spits out a ‘transaction void’ receipt. In a void transaction often the bank transfers the money to the merchant’s account anyway. The banks don’t always realize the error and the charge goes to the customer’s credit card bill. This causes a lot of headaches and customers get really angry with us. Customers should keep the void transaction receipts, if any, and check their credit card statements before the ‘pay by date’ each month to avoid problems.”
In a statement, Ihab Ayoub, Saudi Arabia country manager, Visa International, CEMEA region, advised that the contract for credit cards in Saudi Arabia is between the card issuing banks and the cardholders and that cardholders must deal with the banks directly to resolve issues in regards to theft or fraud.
“Our member banks are pro-actively working to increase security measures,” said Ayoub. “Current initiatives include the migration to chip cards and in the virtual world by adopting the ‘Verified by Visa’ (VbV) e-security program for secure online shopping. Additionally, many banks have introduced technologically-advanced cardholder tracking and monitoring systems designed to identify untypical spending patterns, which help identify potential fraud cases at an early stage.”
If a credit card is lost or stolen, it is of course essential to call the issuing bank immediately. In such a situation most consumers are quite frantic, which is why preparing for the worst is wise. Consumers should create a list of all their credit card numbers along with the issuing bank and the bank’s customer service telephone number which can be dialed internationally — not a toll free number. One copy of the list should be kept in safe place at home but also send the list to a personal e-mail account at a major e-mail service such as Yahoo. With this method, if the card is lost or stolen at the mall or while on vacation, then it will be easy to immediately access the list using any Internet connection and quickly begin the process of canceling and replacing the lost or stolen credit cards.
