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In the US, from what we understand, if a credit card customer reports a strange charge on their card to the credit card issuing bank or financial institution is required by law to hold or stop the payment from the card company to the merchant. In Japan, the story is quite different. Most credit card companies will refund your money if you get a charge from somewhere you don’t know or remember.

However, if you get a charge that is extraordinarily high or incorrect, the majority of the Japanese card companies require you to resolve the issue with the merchant. If you cannot resolve the issue, you will just have to pay. We found this policy with JCB, UC Card, and even the American owned Citicard Company (Citibank). If you are ever put in the situation, it could be very ugly and frustrating.

What does this mean? This means that if you get an incorrect charge, and you cannot get through to the customer care department of the merchant. Or in a worse case, you cannot get a resolution with the merchant then you have just been ripped off. The only way to stop payment is to remove the automatic payment option for the credit card company in question at your bank account that they are withdrawing the money from. Then, instead of dealing with the one particular charge in question; you’ve got the possibility of being charged interest on your whole statement for that month as they would not be able to deduct your balance from your bank account.

We know that Japan is a bit behind the West in the service sector in general. But it is a scary thought to give unfettered access to merchants and credit card companies into your bank accounts. You may want to make sure that you know what type of merchants you are dealing with. It is not so much the places that you don’t know that you have to worry about. It is more the places that you do know. Places like that charge the monthly fees from the cell phone carriers, ISP, telcos, membership fees, and other recurring charges that bill you regularly.

There is light at the end of the tunnel. After a bit of research, we found that American Express International, Inc. (AMEX) in Japan will protect actually protect it’s card members. If you have a situation where you cannot catch a merchant (due to something like a web-based purchased or an under-staffed call center) or cannot get a resolution on the incorrect amount charged to your card the good news is American Express will work with you to resolve the issue.

Be careful who you give your credit card numbers to. With the exception of AMEX, access to your credit card is access to your bank account. Not being careful in this area could almost be like writing your PIN number on the back of your bank card and leaving it lying around the office. In short, use those cards wisely. We hope that Japan will get online with the West on protecting its citizens from dubious “merchants” and credit card companies who refuse to protect their paying members.

If you have any good feedback on consumer protection in Japan, please be sure to submit your feedback in the comment area below.