Burden of Proof in Credit Card Fraud: A Landmark Thai Supreme Court Ruling

The Thai Supreme Court has reaffirmed a critical principle in credit card fraud cases: the burden of proof rests with the issuing bank, not the cardholder. This represents a departure from the general rule that the party asserting a claim bears the burden of proof. In doing so, the Court has clarified the allocation of risk between consumers and financial institutions in disputes involving unauthorized credit card transactions. Supreme Court Judgment No. 2624/2568 establishes an important precedent on liability for unauthorized credit card transactions and significantly strengthens consumer protection under Thai law.

Case Summary

This case arose from a claim filed by the issuing bank alleging that the cardholder failed to make payment on multiple outstanding debts arising from credit card transactions recorded under the cardholder’s account.

The cardholder consistently maintained that the credit card had not been used for the transactions recorded on the dates specified by the issuing bank. The cardholder further asserted that the credit card information had been unlawfully obtained and misused by a third party, as evidenced by a clear discrepancy between the signature appearing on the transaction records and the cardholder’s actual signature. The matter was subsequently reported to the inquiry officer.

In the court of first instance, the cardholder was ordered to pay the outstanding debt. On appeal, although both parties sought review of the judgment, the Court of Appeal upheld the cardholder’s liability and increased the amount payable, declining to consider the defense of unauthorized use on the grounds that it had not been properly raised before the Court of First Instance.

The Supreme Court reversed the lower courts’ rulings, holding that the burden of proof properly rested with the issuing bank, given its superior control over credit card security measures and specialized expertise in transaction authorization systems. As the issuing bank failed to discharge this burden, the claim was dismissed and the cardholder was found not liable. The Court further noted that both the issuing bank and the merchant bore partial responsibility for failing to conduct adequate verification and to implement appropriate preventive measures.

The Burden of Proof Issue

Once credit card fraud is alleged, the key issue is whether the credit card system issued by the bank was sufficiently secure against copying or counterfeiting, and consequently, which party bears the burden of proof.

The Supreme Court held that matters relating to credit card security concern manufacturing, design, and operational processes that fall within the issuing bank’s specific knowledge and control. Accordingly, pursuant to Section 29 of the Consumer Case Procedure Act B.E. 2551 (2008), the burden of proof rests with the issuing bank.

In this case, the issuing bank failed to adduce technical or expert evidence demonstrating the adequacy of its credit card security system. Moreover, evidence showed that other cardholders had lodged similar complaints involving counterfeit cards. As a result, the issuing bank failed to discharge its burden of proof.

Key Impact on the Consumer Protection Sector

1. Shift of the Burden of Proof

The burden of proof is shifted from the cardholder to the issuing bank, as the issuing bank possesses specialized knowledge and expertise in credit card systems and transaction security. Accordingly, cardholders are not required to prove technical matters beyond their reasonable capacity.

2. Enhancement of Bank Security Standards

Following this judgment, issuing banks are required to substantiate claims regarding system security with concrete technical evidence, rather than relying solely on general assertions or internal standards.

3. Promotion of Consumer Confidence

The judgment reinforces consumer protection based on principles of fairness, enhances public confidence in digital financial systems, and supports broader economic activity.

4. Precedent Value

This judgment establishes an important precedent affirming that issuing banks are responsible for implementing effective fraud prevention measures and ensuring the security of credit card systems. Future disputes involving credit card fraud may rely on this judgment in assessing bank liability.

Conclusion

Thai Supreme Court Judgment No. 2624/2568 marks a significant advancement in consumer protection law by placing the evidentiary burden on issuing banks in cases involving electronic payment fraud. The judgment reinforces fairness in the assessment of contractual obligations, strengthens protection for cardholders, and places increased pressure on financial institutions to enhance their security, authentication, and fraud monitoring systems.

Author: Panisa Suwanmatajarn, Managing Partner.

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