The regulation of consumer credit transactions

The credit card has increasingly become a common mode of payment in Malaysia. Initially perceived as an object of status for the rich, today the credit card is within the reach of a large segment of the population and is regarded as a convenient means of payment besides the credit that is also available. Despite the large number of credit cards in circulation, the credit card industry is subject to minimum supervision from the authorities. The legal position of the parties to a credit card transaction is largely based on the contracts entered into between them. The aim of this paper is to consider three important aspects in a credit card transaction. These are: (1) whether the credit card transaction moneylending transaction and caught Moneylenders Act, 1951?1 is a by the (2) the liability for unauthorised transactions - who should bear the loss, the card issuer or the cardholder? (3) the liability for defective goods or services - should the card issuer bear part of the responsibility together with the supplier? On the second and third aspects, the question is also whether current contractual terms are fair to the cardholder or whether some form of regulation should be introduced. In this regard, the provisions of the United Kingdom Consumers Credit Act 1974 would be considered as a possible model. A discussion on credit card will be incomplete without reference to credit card fraud. This undesirable phenomena has caused much loss to credit card companies and cardholders and to the nation as a whole as it acquires the reputation of one of the world's largest credit card fraud centre. The question is whether the available penal laws are adequate to prosecute and deter offenders or whether new legislation is needed to combat credit card frau