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Man in dispute with broadband provider
By Nat Rudarakanchana
HE HAD arranged for his Internet broadband bill to be automatically charged to his credit card every month.
The arrangement, known as the recurring bill payment programme, worked fine until he had a billing dispute with his broadband provider last month. Mr Lim Heng Seng, 31, who works in healthcare, then called his bank, DBS, and asked them to cancel the billing arrangement.
Imagine his surprise when he was told that he was not allowed to do so. Instead, it was the billing organisation - in this case, his broadband provider - that had the authority to stop the arrangement.
Said Mr Lim: "I was the one who authorised my broadband provider to charge my bill to my credit card. "But why is it that my bank does not allow me to cancel this arrangement?
"In principle, I should be empowered to cancel the standing instruction any time that I wish because it is my credit card." He added that the bank would not suffer any loss because he was the one who would be liable for the charges he incurred with his broadband provider.
When contacted, DBS said the agreement to set up and terminate a recurring bill payment is directly between the customer and the billing organisation.
DBS senior vice-president and head of cards and unsecured loans Ms Ooi Huey Tyng said: "DBS' role is that of a payment enabler, acting on a customer's instructions to make payments to the approved billing organisation."
When a customer provides a retailer with his credit card details so that his bill can be charged to it, the process does not involve the bank directly as the arrangement is between the customer and the retailer.
"Hence, the bank has no jurisdiction to commence or terminate any billing arrangement between a customer and a billing organisation," said Ms Ooi. Other banks like OCBC and UOB have the same policy. Ms Alice Goh, head of credit cards at OCBC Bank, said: "The bank merely acts as a third party to assist with the payment."
But DBS said that a customer can cancel his credit card in order to stop further payments. Mr Lim said he called his broadband provider for three days to try and resolve the billing dispute, but could not reach them.
In the end, Mr Lim accepted the solution of cancelling his credit card and applying for a new one. He said: "Yet even if this solves the problem, it doesn't solve it in the right way.
"I previously authorised a retailer to charge my credit card, but what if the relationship between myself and the company later changes? "I would be unable to cancel my billing arrangement without the retailer's agreement."
Mr Lim also said that a DBS staff offered a "solution" of lowering his credit limit, thus reducing the total amount he could be charged without his consent. But he declined to do so.
Giro
Said Mr Lim: "She might as well offer to give me total protection by cancelling all my cards." The same policy does not apply for Giro arrangements, in which a customer authorises his bank to deduct money from his designated bank account on a regular basis.
Customers of all three banks can contact them to cancel a Giro arrangement. So why is there a discrepancy?
This is because a regular credit bill payment is a direct commercial arrangement between the customer and the retailer, while a Giro arrangement involves three parties, including the bank.
Ms Ooi said: "The benefit of using Giro lies in the ability to terminate the arrangement through the bank.
"However, a recurring bill payment arrangement allows customers to enjoy a one-month grace period in repayment as well as the ability to accumulate loyalty points.
"For example, customers using POSB Everyday Card enjoy up to one per cent cash-back on recurring bill payments."
[email protected]
By Nat Rudarakanchana
HE HAD arranged for his Internet broadband bill to be automatically charged to his credit card every month.
The arrangement, known as the recurring bill payment programme, worked fine until he had a billing dispute with his broadband provider last month. Mr Lim Heng Seng, 31, who works in healthcare, then called his bank, DBS, and asked them to cancel the billing arrangement.
Imagine his surprise when he was told that he was not allowed to do so. Instead, it was the billing organisation - in this case, his broadband provider - that had the authority to stop the arrangement.
Said Mr Lim: "I was the one who authorised my broadband provider to charge my bill to my credit card. "But why is it that my bank does not allow me to cancel this arrangement?
"In principle, I should be empowered to cancel the standing instruction any time that I wish because it is my credit card." He added that the bank would not suffer any loss because he was the one who would be liable for the charges he incurred with his broadband provider.
When contacted, DBS said the agreement to set up and terminate a recurring bill payment is directly between the customer and the billing organisation.
DBS senior vice-president and head of cards and unsecured loans Ms Ooi Huey Tyng said: "DBS' role is that of a payment enabler, acting on a customer's instructions to make payments to the approved billing organisation."
When a customer provides a retailer with his credit card details so that his bill can be charged to it, the process does not involve the bank directly as the arrangement is between the customer and the retailer.
"Hence, the bank has no jurisdiction to commence or terminate any billing arrangement between a customer and a billing organisation," said Ms Ooi. Other banks like OCBC and UOB have the same policy. Ms Alice Goh, head of credit cards at OCBC Bank, said: "The bank merely acts as a third party to assist with the payment."
But DBS said that a customer can cancel his credit card in order to stop further payments. Mr Lim said he called his broadband provider for three days to try and resolve the billing dispute, but could not reach them.
In the end, Mr Lim accepted the solution of cancelling his credit card and applying for a new one. He said: "Yet even if this solves the problem, it doesn't solve it in the right way.
"I previously authorised a retailer to charge my credit card, but what if the relationship between myself and the company later changes? "I would be unable to cancel my billing arrangement without the retailer's agreement."
Mr Lim also said that a DBS staff offered a "solution" of lowering his credit limit, thus reducing the total amount he could be charged without his consent. But he declined to do so.
Giro
Said Mr Lim: "She might as well offer to give me total protection by cancelling all my cards." The same policy does not apply for Giro arrangements, in which a customer authorises his bank to deduct money from his designated bank account on a regular basis.
Customers of all three banks can contact them to cancel a Giro arrangement. So why is there a discrepancy?
This is because a regular credit bill payment is a direct commercial arrangement between the customer and the retailer, while a Giro arrangement involves three parties, including the bank.
Ms Ooi said: "The benefit of using Giro lies in the ability to terminate the arrangement through the bank.
"However, a recurring bill payment arrangement allows customers to enjoy a one-month grace period in repayment as well as the ability to accumulate loyalty points.
"For example, customers using POSB Everyday Card enjoy up to one per cent cash-back on recurring bill payments."
[email protected]
