When bank staff get it wrong

In January I wrote about a nasty little scheme perpetrated by a business known variously as Euro-link, the World for Less and General Vision International.

The company had telephoned my mother, offering a "free trial" to some money-off schemes and then helped itself to £60 from her credit card, borrowing the details from a sister company from which she once bought something.

After I contacted the company it decided that it would give the £60 back, claiming that its staff would always ask for credit card details. I suspect many people would have left it at that, but I felt very concerned about the attitude of the Royal Bank of Scotland, which issued her credit card.

Can it really be the case that a credit card holder is liable for a transaction they have not authorised? Section 84 of the Consumer Credit Act makes it clear that customers are not liable for misuse of their credit cards by others. The only exception, which didn't apply here, is the first £50 of loss where the card is no longer in the customer's possession.

The law which provides that losses caused by misused cards have to be borne by card issuers rather than customers is not one of which banks are very fond, and some go to great lengths to pretend it doesn't exist.

When the World for Less sent a note to my mother saying it would refund the £60, I replied saying it had no right to access her credit card account for any reason and that any payment it made would be on account of damages for her inconvenience.

As far as I was concerned she had never been under liability to pay the bank £60 so there was nothing for the World for Less to refund.

When I wrote to the bank pointing this out the letter was not answered. Eventually (after abandoning its tortuous electronic queuing system) I spoke to the person in charge of RBS's credit cards. He confidently told me that once a business had a card number and expiry date and could state a customer's address, the customer became liable for any money taken regardless of whether or not it had been authorised.

But he became somewhat non-committal when I pointed out the Consumer Credit Act provisions made nonsense of this proposition.

I contacted the press office; again, I got a letter from a legal manager effectively accepting what I had said about the law was right.

I am quite sure everybody at the RBS I have spoken to has acted in good faith, and my own long experience of dealing with that organisation has led me to believe it is less awful than most banks.

However it must be a matter of concern that a senior manager can genuinely take a view of the law that is so misconceivedly in favour of the bank.

· Richard Colbey is a barrister