by Like :
1. The credit card holder (the user)
2. Credit card issuer Bank (e.g. ICICI, HDFC etc)
or
3. Credit card company (e.g. Mastercard, Visa etc)
or
4. Payment Gateway service provider (e.g. checkout etc)
or
5. Site owner (e.g. ibibo.com etc)
I have found this best, which was explained by Cvprasad…
I assume your question is focussed around the liability of an online transaction and NOT the traditional point of sale (POS) terminal transaction. The liability of fraud differs significantly in each of the cases. If it is the former, then liability lies with the merchant viz. Yatra.com, Makemytrip.com, ebay.in. To know why, we need to understand the differences between Card Not Present (CNP) and Card Present (CP) transaction.
In the CNP cases, the merchant is expected to collect adequate information from the user and authenticate the card holder before the processing the payment. In any case, after a fraud is reported by the card holder to thier issuing bank (ICICI, HDFC etc), it is treated as a dispute a.k.a chargeback. The chargeback is then forwarded to the merchant who is given about 25 – 30 days to contest the chargeback. The merchant is allowed to build a case on thier authentication steps followed, but the eventual decision lies with the issuer. In 95%+ of the fraudulent chargebacks, the online merchants eats the loss. In others words, if an online merchants recieves a fraud chargeback, it is as good they loosing that money. This is one of the reasons why you will see that large online merchants/payment processors (e.g. PayPal, Ebay, Amazon.com) build thier own sophisticated fraud prevention techniques, data models and manual workforce to combat fraud, while card issuing banks focus thier fraud mitigation efforts on the offline POS transactions. In fact, it is a key part of thier product offering to build trust with thier consumer and merchants accepting thier payment method.
In the Card Present (CP) cases, it is a different ball game. The card issuer will seek information from the merchant about the transaction to carry out thier investigation. Post investigation, if the transaction is determined to be fraud, the issuing bank will bear the loss. However, the fine prints of the policies of the bank may allow them to aportion the loss with the merchant. In the CP transaction world, the card holder signature on the charge slip is important. This is one of the many reasons why a merchant in the physical store will need to retain the charge slip that the card holder signs. If there is signature mismatch, the bank can pass on the liability to the merchant.
Visa/Master are regulators of the card industry. It is called as the Payment Card Industry (PCI). At a birds eye view, they monitor the entire fraud rates occuring out of their cards issued by various banks. If fraud rates increase beyond a threshold, the banks or the merchant can be fined.
In totality, the consumer is almost always safe and convered unless proven to have used thier card. Laws in the developed markets require the card issuer to provide provisional credit of the disputed amount untill the outcome of the case is reached.
For more info on CP and CNP transactions, see this guideline by Visa issued for merchants – http://usa.visa.com/merchants/risk_management/card_not_present.html
There is no liability for user :
Credit cards transactions in India are governed by Indian Contracts Act 1872. In fact, in most of the world Credit Card transactions will be covered by respective Contract laws unless specific laws exist to govern credit card usage.
Anyway getting back to the point, if you or your wife (since she holds a linked card) did not authorize the transaction, the contract formed between the merchant (in this case Air India) and the person who used the card is void in principle. Simply because whoever used the card is not legally entitled to get into a contract and guarantee through a payment instrument that you own. Only you or your wife can legally authorize this transaction.
The loss in this case will have to be borne by the Merchant. Its the onus of the merchant to prove the genuineness of the offer that eventually leads to a contract.
Call your bank back and ask them to initiate a charge-back with the merchant.