Credit Card company wants me to pay the fraudulent transaction charged to my card

At 6:30pm yesterday, a CSR from Citibank called me to ask if I was using my credit card which at that time I was driving. She asked me to check if my card is with me, then I realized my wallet is being picked pocket. I was told to call customer service again to have the card replaced and they will block the card.

When I called Citibank later on at 830pm to request for replacement, a CSR named Archie told me that the P40k transaction was already charged and that it was the 2nd transaction amounting to P38k that they had blocked. He suspected that this could have been a GC purchase since it was a flat 40k amount. He asked me to call SM Makati GC counter to check if such a transaction occurred and request to have these GCs serial number blocked for usage or I will have to pay for this charges.

I called SM Makati GC counter. A lady answered the phone. I asked if there’s a 40k GC transaction just occurred she said yes and it was charged to a credit card that bears my name. When I asked about how such a big transaction was approved without a proper signature, she said the signature was the same and they pass my call to a manager on duty.

A Customer Service Manager talked to me over the phone. She explains her side how these GCs are impossible to hold. But with the technologies and system SM has, how can this be not possible?? Shouldn’t it be in the system that it can check for GC serial numbers and put to hold blocked GCs? I don’t know. But my concern here is, Citibank was already informed about such dispute and is aware of such a fraud. But if SM insists on having it claimed/reimburse, Citibank will force me to pay such an amount caused by carelessness of SM. Moreover, when I requested to see the charge slip for the signature, they told me only Citibank is authorized to do that. By then that amount would have already been charge and if I don’t pay, late payment charges and penalties could have already been piled up.

Apparently, SM is putting the blame to Citibank since Citibank issued an approval code, and Citibank on the other hand wants SM to be responsible for this. I’m being caught in the middle now don’t know what to do. Most of all, P40k is something I cannot afford. 

As of the moment, SM manager told me to wait for their feedback regarding this after she sought her senior manager’s advice. Citibank on the other hand, told me that they cannot file this as dispute since it happened before I called to block the card in which case, it’s Citibank who made me aware that I was picked pocket. What the Citibank CSR can do as of the moment is write a report and will give me feedback next week.

Now am point blank and worried and lost.

Dearest experts, what can I do to avoid being charged by this?

Voiding the GCs purchased through your credit card is not as simple as it seems. It is already expected that these GCs will be sold and eventually, they will land in the hands of innocent consumers. By voiding the GCs, SM will have plenty of irate consumers, i.e., holders of worthless GCs. This is the scenario that SM is certainly avoiding.

In any case, SM has the obligation to void the GCs as they were informed at the soonest possible time of the fraudulent transaction. Furthermore, SM should have exercised due diligence in verifying the identity of the purchaser of the GCs to ensure that he is the owner of the credit card especially because the transaction involves a huge amount. It appears that the SM cashier did not even bother ask for an ID from the purchaser of the GC. This, I believe, is negligence on the part of SM.

As for Citibank, R.A. 8484 or the “Access Devices Regulation Act of 1998” applies. Section 15 of the said law provides:

“Sec. 15. Loss of access devices. — In case of loss of an access device, the holder thereof must notify the issuer of the access device of the details and circumstances of such loss upon knowledge of the loss. Full compliance with such procedure would absolve the access device holder of any financial liability from fraudulent use of the access device from the time the loss or theft is reported to the issuer.”

Based on the above provision, you, as credit card holder, will be absolved from any financial ability arising from the fraudulent use of your credit card FROM THE TIME THE LOSS OR THEFT IS REPORTED to Citibank. Since the 40k transaction was already charged to your credit card at the time you reported its loss, Citibank will have to charge you with the 40k transaction if SM decides not to void the GC purchase.

To sum up, it is my opinion that you will have a cause of action against SM in case it decides to honor the fraudulent GC transaction primarily because there was negligence on the part of its cashier.

For now, just wait for SM's response and hope that it decides to void the GCs.

Tnx much AttyButterBean. SM called me just now to acknowledge receipt of my email. and that it's now being forwarded to their headoffice. My question now is, do i have the rights to question SM on how they handle their transactions?

as client of citibank, isn't it my bank's right to question their merchant's credit charges reimibursement and put such transaction on hold since i've already informed them of the dubious transaction when they called me for verification that day?