look news india
Today, amid the rapidly increasing spread of digital banking and financial services, credit cards have become an integral part of daily life. But at the same time, under the pressure of aggressive marketing and meeting monthly targets, many banks and non-banking finance companies (NBFCs) dispatch credit cards to customers’ addresses without their explicit consent or upgrade the cards without informing them. Many times customers get confused whether this card will be activated, whether annual fees will be deducted on it, or whether there will be any negative impact on their CIBIL score. If this has happened to you too or you are constantly getting unwanted credit card offers, then the ‘Credit Card and Debit Card – Issuance and Conduct Directions’ of the Reserve Bank of India (RBI) provides a very strong shield in your favor. The central bank has made such stringent provisions to protect the interests of consumers that if any financial institution issues a card without prior permission, it will not only have to immediately cancel the card but will also have to pay a heavy penalty as compensation to the customer. As a conscious consumer, you should know in detail about your 15 basic rights, which protect you from any financial fraud or arbitrariness of the bank.
As per the clear guidelines of RBI, no bank or card issuing institution can issue a credit card without the prior written or explicit digital consent of the customer. If an unsolicited card is sent to a consumer without his permission and any charges are levied on it, the bank will have to close the card immediately without any charges. Furthermore, if the bank has generated any charge or bill on that card, the bank is mandated to refund that charge as well as pay a penalty of double that amount to the customer as damages.
Many times the cards sent fraudulently remain lying in some corner of the house without being activated. RBI rules say that if the card is not activated by the cardholder by creating a one-time password (OTP) or PIN within 30 days of the customer receiving it, the bank will have to ask for re-confirmation from the customer. If the customer does not give consent to activate within the next 7 days, the Bank will have to automatically permanently close that credit card account without charging any fee or penalty and immediately inform the customer.
If you want to close any of your active credit cards, the bank cannot entangle you in unnecessary procedures. It is mandatory for the bank to provide direct option for card closure on its website, mobile app, helpline, SMS and email. The Bank must compulsorily close the Card within 7 working days of the Customer submitting the request for closure of the Card by paying all dues. If the bank fails to close the card within 7 days, it will have to compensate the customer at the rate of ₹500 per day of delay, provided there is no outstanding in the account.
Banks cannot increase the credit limit of the customer on their own will. Many times banks increase the limit without asking to encourage spending, which increases the risk of card loss or fraud. According to the rules, before increasing the credit limit of any cardholder, it is mandatory for the bank to obtain his express written or electronic consent. The limit increased without consent is considered completely illegal.
While issuing the card, banks have to give a clear document called ‘Most Important Terms and Conditions’ (MITC) to the customer. In this document, all the charges related to the card like annual fee, joining fee, cash withdrawal charge, late payment fee and Annual Percentage Rate (APR) should be mentioned in big and clear letters. If any charges are not already mentioned in the MITC document, the Bank cannot impose any such hidden charges on the customer in future.
If there is any cyber fraud or unauthorized transaction with your credit card, you do not need to panic. Under the ‘Limited Customer Liability’ policy of RBI, if there is a system failure or security lapse on the part of the bank, the customer’s liability is nil. Whereas, in case of any third-party fraud, if the customer informs the bank about the unauthorized transaction within 3 working days, then the customer will not have any financial responsibility for that illegal withdrawal and the entire amount will have to be borne by the bank.
Even if for some reason the credit card payment remains outstanding, the bank or its recovery agents are not allowed to behave rudely with the customer. As per strict RBI rules, recovery agents can contact the customer only between 8:00 am to 7:00 pm. They cannot under any circumstances threaten the customer, publicly humiliate them, use inappropriate language or harass family members, friends or colleagues by calling them. Doing so may result in heavy regulatory penalties being imposed against the concerned bank.
The salary date of every salaried person is not the same. Keeping this in mind, RBI has given the right to the cardholders that they can change the billing cycle and payment due date as per their convenience at least once in their entire card lifetime. With this, customers can avoid late payment fees by setting the date for paying the bill according to the time of their salary.
If your CIBIL or credit score gets damaged due to a bank’s technical error or a card issued without asking, you have the right to get it corrected immediately. If the credit bureaus and banks fail to correct the incorrect data within 30 days after filing the complaint, the complainant has a legal right to get compensation at the rate of ₹100 per day after the expiry of the 30-day deadline.
Often customers think that they have paid the bill by just paying ‘Minimum Due’ in the credit card bill. RBI has made it mandatory for banks to put a clear warning box in the monthly billing statement, clearly stating that repaying only the minimum amount will attract huge compound interest of 40 to 45 percent on the remaining amount and it may take several years to completely liquidate the debt.
When a customer completely closes his credit card account, the bank has a legal responsibility to inform all the four major credit information companies (CIBIL, Experian, Equifax, CRIF High Mark) within the next 30 days that the account is completely ‘closed’ and there is no outstanding on it, so that the future loan eligibility of the customer is not affected.
Banks often bundle personal accident insurance, card protection plan (CPP) or other paid services with credit cards without asking and deduct the premium every month. As per rules, unless the customer gives separate express consent for any such add-on product, the bank cannot deduct any premium from his account. If such deduction is made, the customer is entitled to a full refund.
The reward points collected by customers by shopping day and night are their property. Banks cannot suddenly reduce the value of reward points as per their wish nor can they expire them without any notice. As per the rules, it is mandatory for the bank to inform the cardholder through SMS or email at least 30 days before making any change in the rewards policy or changing the points redemption rules.
If you feel that an incorrect charge, unwanted subscription or incorrect transaction has been added to your bill, you can lodge an official complaint with the bank within 60 days of the bill being issued. Until the Bank completes an impartial investigation of the disputed transaction, the Bank cannot levy any late payment charge or interest on the particular disputed amount nor report the disputed amount to the credit bureaus as a default.
If the concerned bank does not resolve your complaint satisfactorily within 30 days regarding any credit card related issue, unwanted cards, wrongful recovery or abuse, you can directly lodge an online complaint with the ‘Reserve Bank of India Ombudsman’ (RBI Integrated Ombudsman Scheme). Complaints made on the RBI Ombudsman portal (cms.rbi.org.in) receive speedy hearing and if found guilty, the bank is ordered to compensate the customer for his entire loss as well as compensation for mental torture.