Discovering that your ATM or debit card is missing — and that someone has used it to make purchases — is alarming. The immediate question: is the issuing bank obligated to refund you? Supreme Court Decision No. 4568/2566 (2023) offers important guidance on this issue.
Card Use: “In-Store Purchases” vs. “Cash Withdrawals”
First, it is important to distinguish between the different ways a stolen card can be misused. This article focuses on cases where the thief uses the card to make purchases at a point of sale (POS), which typically requires a signature on the sales slip — not cases where the thief knows the PIN and withdraws cash from an ATM, where the liability framework may differ.
The Deciding Factor: When the Merchant Fails to Verify the Signature
Under the agreement between merchants and the bank that owns the EDC (Electronic Data Capture) terminal, merchants are generally required to verify the customer’s signature on the sales slip against the signature on the back of the card before accepting payment. If a card is lost or stolen and the thief uses it to make purchases — and the merchant neglects to verify the signature, or does so carelessly — the merchant is in breach of its agreement with the EDC bank.
Is the Issuing Bank Liable? Supreme Court Decision No. 4568/2566
When a merchant — acting as an agent of the EDC bank — breaches this verification obligation, the Supreme Court in Decision No. 4568/2566 established that the issuing bank (which functions as a principal to the EDC bank) cannot rely on the cardholder agreement to disclaim liability. In other words, even if the cardholder agreement states that the cardholder bears responsibility for losses from a lost card, when the loss results from the merchant’s failure to verify the signature, the issuing bank must refund the amount debited from the cardholder’s account. The cardholder is not required to pursue or sue the merchant directly.
You May Not Get a Full Refund: When the Cardholder Is Also Negligent
However, in the same Decision No. 4568/2566, the Court also considered the cardholder’s own negligence — specifically, the failure to exercise reasonable care in safeguarding the debit card. Where both parties share fault (the merchant/bank and the cardholder), the Court applied Section 223, paragraph 1, of the Civil and Commercial Code — the principle of contributory negligence — to apportion liability. In this case, the Court ordered the bank to refund three-quarters (3/4) of the total fraudulent charges. This is a crucial point: even when the bank is liable, if the cardholder was also negligent, the court may not order a full refund.
What to Do If Your ATM/Debit Card Is Lost
- Block the card immediately — Contact the bank’s call center or other available channels to block the card as soon as possible. The faster you act, the less damage can occur.
- Keep a record of your report — Note the date, time, and name of the officer who handled your call, or save the SMS confirmation of the card block.
- Review your account transactions — Check your account activity carefully for any unauthorized transactions after the card went missing.
- Dispute unauthorized transactions — If fraudulent charges are found, contact your bank branch immediately to dispute the transactions and request a refund.
- Gather supporting documents — Prepare your identification and relevant evidence (e.g., police report if available, card block confirmation, account statements).
- Consult a lawyer — If the bank refuses to accept responsibility or disputes arise, consult a lawyer to assess the facts, applicable law, and the best course of action.
Summary
When a lost or stolen ATM/debit card is used for in-store purchases, and the merchant fails to verify the signature, the issuing bank is likely liable to refund the cardholder, based on the principle established in Supreme Court Decision No. 4568/2566. However, if the cardholder was also negligent in safeguarding the card, the court may order only a partial refund. Protecting your card and blocking it immediately upon discovery of loss are essential.
If your card has been lost, used fraudulently, and the bank disputes your claim, OSP LEGAL is ready to advise you and assess your legal options. Contact us via Line: @osp-legal or call 02-578-8303 / 098-509-0956.
