Most of us use plastic for our purchases because of the ease and convenience it offers, so understanding how to safeguard our cards is more important than ever as we move towards a cashless society.

The Sunday Times highlights two scenarios relating to credit card disputes provided by the Financial Industry Disputes Resolution Centre (Fidrec).

Case 1: Financial institution wins

Mr Tommy Lim (not his real name) went to a pub one evening and stayed till the wee hours. At 3am, a tipsy Mr Lim paid for his drinks using one of his credit cards.

He took a taxi home and slept for the next 10 hours. Upon waking up at 2pm, he found that his credit card was missing. He immediately made a police report and called his bank to report the loss.

Meanwhile, in the period between 5am and 2pm, the thief had gone on a shopping spree with Mr Lim's card, buying jewellery to the tune of $7,000 at a 24-hour store.

The bank billed Mr Lim for the purchases. He disputed the bill.

MEDIATION: The bank offered to settle the matter with Mr Lim by giving him a 50 per cent "discount" which reduced the bill to $3,500. Mr Lim refused. He was only prepared to pay $100. He opted to have his case adjudicated at Fidrec.

WHAT MR LIM SAID: He pointed out that he had notified both his bank and the police of the loss or theft of his credit card as soon as he realised it. This was some 12 hours after it was lost. Therefore, he argued that he had satisfied a clause in the agreement made between the bank and him, that stated that his liability was limited to $100 if he had done precisely that.

WHAT THE BANK SAID: The bank countered that this could not absolve Mr Lim of liability. It argued that he had not demonstrated that the loss or theft of his credit card was not due to his negligence.

WHAT THE ADJUDICATOR SAID: The adjudicator ruled in favour of the bank, having found Mr Lim was unable to recount how his card went missing. It was not disputed that he was inebriated when he paid the bill with his credit card at the pub.

VERDICT: The adjudicator ruled the loss of the credit card was due to Mr Lim's negligence, and he was held liable for the full $7,000.

Case 2: Customer wins

Ms Melissa Wong (not her real name) rented a room in a four-bedroom flat. She shared the flat with seven other tenants who were unknown to her.

She left for a week-long holiday in Thailand and locked her room before she left. She was horrified on her return to find that the door was unlocked and the room burgled.

Among the items stolen was her credit card, which she had kept locked in a wooden cabinet. She immediately called her bank, which then blocked her card. She also made a police report.

Unfortunately, the thief had made off with $6,000 worth of purchases while Ms Wong was away. Her bank, although sympathetic, insisted she was fully liable for the fraudulent transactions of $6,000.

Ms Wong protested and filed her claim at Fidrec. When mediation could not resolve the matter, she opted to have her claim adjudicated there.

WHAT MS WONG SAID: At adjudication, Ms Wong argued she was not liable as she was a crime victim. She contended that she was not negligent for the theft of her card as her room was properly locked.

WHAT THE BANK SAID: But the bank said she was negligent in not ensuring that her credit card was kept safely in a metal safe instead of a wooden cabinet, especially since her flat was shared with seven other tenants not known to her.

It also noted that police investigations showed no signs her room door had been tampered with, suggesting an easy entry by the thief.

The bank argued that Ms Wong had not been vigilant, and said that she should have kept all her credit cards with her all the time.

WHAT THE ADJUDICATOR SAID: The adjudicator decided in Ms Wong's favour, holding that she had not been negligent. He said that although the flat was shared with seven other tenants unknown to her, when she went overseas for a week, her room had been locked.

Also, her credit card was kept in a wooden but locked cabinet in her own room. The adjudicator also agreed with Ms Wong that the burglar could have used a master key or picked her lock.

VERDICT: The adjudicator ruled in her favour.

• Disclaimers: The two cases are fictitious and any resemblance to real-life people or actual cases is unintended. They are not indicative of adjudication outcomes at Fidrec.