Module 5 · Banks, cards and payments
When card payments go wrong, and paying abroad
What to do if your card is lost or misused, how to dispute a purchase, and how to avoid the hidden costs of paying in another currency.
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In this lesson
- Tell an unauthorised payment from an authorised one that went wrong, and choose the right remedy
- State your maximum loss for a lost or stolen card in the EU
- Calculate the cost of dynamic currency conversion and avoid it
Andrej, 58, is on holiday in Zurich. The restaurant’s card terminal asks: “Pay CHF 150 or €170.45?” Paying in euros feels safer. A few days later his wallet is stolen, and his app shows two payments he never made. What should he do, and what will each choice cost him?
The key question: did you authorise it?
Your rights depend on one question: did you agree to the payment?
An is one you did not agree to: a thief used your card, or a criminal used your card details. Under EU rules:
- Block the card and tell your bank without delay, and at the latest within 13 months.
- The bank must refund you by the end of the next business day, unless it suspects you of fraud and reports this to the authorities.
- For a lost or stolen card, your loss is at most €50.
- It is €0 if the payment needed no : a check with two of three things — something you know (a PIN), something you have (your phone or card) and something you are (a fingerprint or face).
- Your loss has no limit if you acted fraudulently or with gross negligence, for example by keeping the PIN with the card or reading a code from your banking app to a caller.
payments without a PIN are a common case of “no strong authentication”. In the EU, a tap without a PIN is allowed up to €50 per payment. After 5 taps in a row, or €150 in total, the terminal asks for your PIN.
When you approve an online payment in your app, the screen shows the amount and the shop. Read it. If you approve a payment you did not start, it may count as authorised.
A payment can also be authorised but go wrong: the goods never arrive, they are faulty, the shop goes bust, or you are charged twice. First ask the shop. Then ask your bank for a : a card-scheme rule, not a law, that lets your bank reverse a card payment. It works for debit and credit cards. Time limits are often about 120 days, counted from the payment or from the date you expected the goods or service. Bank transfers have no chargeback.
Paying in another currency
Abroad, a terminal or ATM may offer to charge you in your home currency. This is (DCC). It uses the terminal’s own rate, which usually includes a markup of several percent; consumer groups in Europe have found markups above 10%. Choosing the local currency is usually cheaper.
An is the extra margin a provider adds to the exchange rate. EU rules require terminals offering DCC to show the markup as a percentage over the ECB reference rate before you pay. Your own bank may also add a foreign-currency fee, so check its price list before you travel. Euro payments in any EU country must cost the same as at home.
At ATMs abroad, up to three costs can appear: your bank’s fee, a fee from the ATM’s owner, and a DCC offer. Decline the DCC offer.
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