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Ramkrishna, a senior citizen, had some credit card dues towards which he made a full and final settlement in 2007. However, four years later the card issuing agency went after him, claiming that the past settlement was not valid. Luckily, he had preserved a copy of his payment, otherwise he would have been compelled to pay up again.
For Rohan, trouble came from an unsolicited upgradation to premium circle membership. When he did not pay the membership fees, the bank levied overdue charges on the card account.
Reserve Bank of India guidelines indicate that add-on card holders cannot be made liable for the dues of the primary card holder.
Their names too cannot be reported to credit information companies without their consent. Despite this, a bank did exactly the same to Rahul who got relief after approaching the ombudsman.
A look through the Annual Reports of the Banking Ombudsman (BO), available in the Web site of the Reserve Bank of India, reveals that such cases are aplenty. In 2011-12, cards were the single biggest grounds on which customers felt short-changed by their banks.
Card-related grievances formed one-fifth of the total complaints received by the BO.
Documentary evidence
To avoid unnecessary harassment for no fault of yours, it would help if you are aware of your rights as a customer. For instance, take wrongful billing. According to RBI’s Master Circular on Credit Card Operations of Banks (available on their Web site) in case you protest any bill, you have the right to ask for an explanation. If necessary, you can even demand documentary evidence of such billing from the bank. The bank is expected to oblige within a period of sixty days in such a case.
Written consent
Similarly, RBI insists that for unsolicited cards, written consent of the customer accepting the card is necessary. In case an unsolicited card is issued and activated without such written consent and the customer is billed for it, the bank is expected to reverse the charges and pay a penalty to the customer. The penalty amounts to twice the value of the charges reversed. The person in whose name the card is issued can also approach the BO.
In the case mentioned above, Rohan had only given a telephonic consent for premium circle membership. Subsequently on receipt of the letter detailing the scheme, he had found the scheme unsuitable and had conveyed his refusal to the bank.
However, when he did not pay the membership fee, the bank went ahead with levying overdue charges on the card and assigned it to an asset reconstruction company. Only after follow-up by the BO did the bank agree to reverse all such levies and settle the matter with the reconstruction company directly.
Rules on interest and charges
Likewise, it pays to know other guidelines given to banks by the RBI. One, banks must give you at least a fortnight’s time for payment (before interest starts getting charged) from the time you receive your credit card bill.
Two, without getting your prior consent, banks cannot levy any new charges that were not indicated to you at the time of issue of the card.
Three, changes in existing charges (other than interest) can be made only with prospective effect, after giving you a notice of at least one month.
Grievance redressal
Be it refusal to issue credit cards for lame reasons, incorrect bills or charges, pestering from recovery agents or telemarketers, or sharing of confidential information by the bank, remember that you a have a time limit of 60 days to make your complaints.
While you can try to get it sorted out through the call centre during this period, you also have the option of going to the bank.
Every bank is expected to have grievance redressal machinery and has a duty to mention the name and contact number of the grievance redressal officer in the credit card bills. You can approach this officer as a second step.
If you do not get satisfactory response from the bank within a maximum period of thirty days from the date of lodging the complaint, you have the option to approach the office of the concerned BO.
Apart from compensating any financial loss, BO can also ask the bank to make good the loss of your time, expenses incurred and harassment you’ve undergone.
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