CREDIT card issuers take the financial rap for fraud, accepting liability if a customer confirms that payments made on his or her card are fraudulent. But credit cardholders who have fallen victim should stay on the alert, even after they think the problem has been resolved.

When fraud is identified, it is standard policy for the bank or card company to check with the customer that the suspect payments are fraudulent and freeze the account. But if delays or errors occur in the processing of the refund, interest charges and late-payment fees may still be unfairly applied.

Kelly MacNamara discovered this the hard way with her Virgin Money credit card after fraudulent cash and retail transactions amounting to almost £900 were made in July.

After confirming that Ms MacNamara had not made the payments, Virgin Money froze her account. However, MBNA, the US credit card company which manages the Virgin card, refunded only the amount for the retail fraud and not the cash fraud.

Her next statement not only showed that she hadn’t received the full refund and was being charged interest on the incorrect amount, it also warned her that she had not kept up repayments and threatened to rescind her favourable rate of interest if payment was not received.

Hours spent on the phone to Virgin Money yielded no satisfactory response. Nor did a letter of complaint. Ms MacNamara says: “Virgin seems to think that the longer it can drag this out, the more likely I will be to cave in and pay the balance. I do not see why I should be spending so much time trying to correct its errors.”

After intervention by Times Money, Virgin Money refunded all fraudulent transactions, fees and interest resulting from the initial error. A spokesman said that the initial problem with the refund was a consequence of human error.

A spokesman from Apacs, the Association for Payment Clearing Services, says that customers should never suffer any financial loss from credit card fraud. “Although it will take the bank a period of time to recredit your account, refunds should be backdated to the time the fraud was committed and all fees and interest that may have accrued should be removed instantly.”

REBECCA O’CONNOR