Costly ‘free rides’

Financial giant National Commercial Bank (NCB) says it intends to recover sums amounting to millions of dollars from Visa Debit card customers whose payments to ride-sharing platform Uber were reversed due to a system error that resulted in ‘free rides’ for months.

More than 8,000 accounts, approximately one per cent of NCB Visa Debit cardholders, have been impacted.

In an emailed response to Gleaner questions yesterday, Danielle Cameron Duncan, vice-president, payments services and digital channels at NCB, said the bank had been alerted to an unusually high volume of Uber transaction reversals done over the period May to October this year.

Cameron Duncan said that in the normal course of business, transaction reversals are done daily by merchants for various reasons. However, the patterns observed for the Uber transaction reversals raised a “red flag” for further investigation.

“Charges were not applied to customers’ accounts. Instead, transactions were conducted in circumstances where customers’ accounts were not appropriately charged. NCB intends to recover these sums from the relevant customers. We are currently reviewing the period May to October 2024. Ultimately, a full investigation will be conducted,” the NCB vice-president said.

“Given the nature of the issue, it was necessary to act swiftly to recover the sums. Where customers request assistance with the amounts owing, they are invited to contact us at cem@jncb.com,” Cameron Duncan told The Gleaner in response to reports of hundreds of thousands of dollars being deducted from customers’ accounts on Tuesday without prior notice.

Attorney-at-law Chukwuemeka Cameron, who specialises in privacy law and commercial law, said he could not see the fault being the customers’.

He said it was the bank’s responsibility, under Section 27 of the Data Protection Act (DPA), to ensure that accounts are up-to-date and accurate though he said a lot of what had transpired would be governed by contracts that would have to be closely examined.

“There is recourse under the DPA as the data-processing standards require data controllers to maintain accurate personal data. [I] don’t see how customers can be at fault.

“The fourth standard is that personal data shall be accurate, and where necessary, kept up to date,” he said, noting that this covered an account balance belonging to an individual.

The NCB decision triggered a firestorm on social media, with customers, friends, and family members of customers calling for a boycott of the financial institution. Others called for persons to close their accounts.

However, Cameron Duncan explained that when customers book a ride with Uber, the payment is pre-authorised and the amount debited from their account.

She said where that amount changes at the end of the ride due, for example, to the ride distance being longer than expected or a tip being offered, that initial payment is reversed.

The new amount should then be debited from the customer’s account.

She said the bank’s investigation has, so far, revealed that in some instances, this new amount is not then debited from customers’ accounts. She said that NCB was still working with Visa to address the issue, which the bank detected earlier this month when the volume of transaction reversals was noticeably higher than usual.

She said the bank subsequently received a formal report from a customer in October but noted that this was received after NCB’s internal systems had already detected an issue and had begun working with Visa to investigate the root cause.

Asked if this amounted to a case where customers knew they were not being charged and took advantage of or abused the bank’s system, she said that based on the number of transactions carried out by some, this was possibly the case.

“Our review detected instances where individual customers completed an unusually high number of Uber transactions — some exceeding 700 rides within a single month — indicating possible misuse or exploitation of this issue. Approximately 300 accounts have been frozen for investigations to be completed,” she told The Gleaner.

Dozens of NCB customers posted their account statements online, some with liens of up to $300,000 while at least one customer reported a lien of over $700,000 and another, $1 million. Others complained of sums of $50,000 to $100,000 being pulled from their accounts.

One NCB customer, who did not want to be identified, said he had been using Uber for over a year without noticing the reversals.

He said he mostly used his credit card to cover his rides but that at certain periods of the month, he would use his debit card.

He explained that when booking a ride, Uber would display the minimum and the maximum cost of the trip.

On accepting the trip, he said he would receive a notification from NCB that the minimum cost had been charged.

When the trip is complete, another notification is sent from NCB of another charge, which is typically the actual cost of the trip, and the first charge would be reversed.

“Up to yesterday evening, I had just over $10,000 in my NCB account. At about 8 p.m., I saw persons commenting on social media about the adjustments NCB was making to their accounts. I checked my account without ever thinking that my account would be affected as I always get the notifications, and the money always leaves my account, but when I checked, the money I had was adjusted to some previous trips for September, and I have a $51,750.27 lien on my account.

“This is an account I use for most of my transactions - grocery shopping, bill payments, and even to get my salary,” he said.

Information technology specialist Andre Millwood said that two weeks ago, NCB froze his account, preventing any transactions.

He said he found out after one of his transactions was declined, and he called the bank and was told that there was something awry with his account and that he would have to go in to the branch to have it sorted out.

He said that after hours at the bank, a representative printed out a 150-page bank statement and told him to calculate the Uber reversals.

He went through 10 pages before quitting the process. Transactions up to that point (June) totalled approximately $184,000, he said.

Millwood said he was stunned because he was not aware that reversals had been taking place.

“I try to be a fair person. I try to be honest. I don’t have a problem if it is that I had to pay for it. I was trying to pay for these things in the first place. But to freeze the account and then expect me to have whatever lump sum it is going to come to - because I still don’t know what it is -I am not going to have that all at once,” he told The Gleaner.

He said the bank was unwilling to work out a payment plan and said that the matter had been escalated to the fraud department.

He said the bank has since said that it will update him in 30 days.

“Persons going about their business and not being aware of reversals happening cannot be treated as if they were fraud perpetrators. We didn’t know what was happening, and we didn’t ask for any refund or for these reversals to be happening. As far as I am concerned, it is the responsibility of the bank and their system to not have this happen. Now I am to be held liable for your system failure?” he questioned.

Still, NCB is holding firm to its position. Cameron Duncan said the bank is able to provide all the necessary transaction details so that customers may reconcile the amounts owed with the dates of the rides.

She said the bank understands the inconvenience the issue has caused and is working to resolve it as soon as possible.

Responding to whether customers should be concerned by the latest development, Cameron Duncan said the bank successfully processes over 200,000 Visa Debit transactions each day.

“This is a peculiar issue that we are working assiduously with Visa to resolve,” she said.

kimone.francis@gleanerjm.com