In recent times the usage of credit card has increased. According to data available the usage of credit card is going up by the day 27 million credit cards were in circulation till June 2008. So is the increase in the complaints against them, from the annoying practice of issuing unwanted cards to a range of unexplained fees charged by banks, the piling list of grievances has forced RBI to keep check on them.
The central bank recently conducted a survey on credit card operations seeing the rise in the allegations of lack of transparency and excessive interest rates. The apex bank has issued a set of guidelines, which are not only proposed to streamline operations but also authorize the customers.
Although it’s not compulsory for the banks to adopt these recommendations, but these guidelines will help the customers become more aware of their rights and serve as a basis for redressal of complaints. Here are some deadly issues which may help you in dealing with more competently:
1. Many times you are burdened with a credit card that you never wanted and you have to go all through those troubles and harassments to chase customer care executives to cancel it. RBI in its guidelines has advised the banks that they can issue a credit card or any other product only after getting a customer’s explicit consent-meaning that it cannot be processed on an implied understanding. And by chance such a card is lost and misused; it shall be the bank’s sole responsibility and not yours. On the contrary, if a bank rejects your application for a credit card, it has to provide to you in writing the reason for doing so. You can also choose the chards with options of photos, PINs and laminated signatures, as advised by RBI to reduce the risk of stealing or misuse of cards.
2. In case you find that you are paying a higher rate of interest than your neighbor, you can ask for the explanation regarding this from your bank - whether it’s due to your poor payment and default history or some other reason, as banks have been advised to publicize through their Website and other means the interest rates charged for various categories of customers. Also, regarding the extremely high interest rates being charged by banks on payment rollover, RBI has suggested that they prescribe a ceiling rate, including processing and other charges.
Banks are liable to clearly specify any charges that were hidden earlier and emerged as a vicious surprise along with the bill. In case you have taken a card that is free of issuance charges only for the first year, banks will have to specify it. If you always pay only the minimum dues, leaving the balance for the next month in the hope that it shall also constitute free credit period, now bank has to inform you that the rollover amount is not interest-free. This will help you to use your card with greater care.
3. If you have always worried about the constant delays in receiving bills or statements, expect online dispatches in future if you are not getting them already then RBI has instructed banks that customers are entitled to at least 15 days’ time to pay the credit card bill before the interest begins to be charged.
Banks have also been asked to take the customers’ acknowledgement for the bills’ receipt in order to keep up with the complaints of delayed or lost statements. There is also a clause that a bill cannot be sent after an indefinite period of, say, two years. A set time-frame has to be specified and adhered to by the banks regarding the settlement of any outstanding claims or rectifying any errors by the card-holder.
4. There are very few customers who have not had to spend hours stuck to a phone to correct a billing fault. If you have been one such discontented card-holder, RBI has provided some respite. RBI has asked the banks to have qualified call centre staff members who can deal with all complaints competently, and also to automatically forward the unresolved complaints from a call centre to higher authorities. It has also suggested that the details of such a mechanism should be put up on the banks’ Websites to provide information to the public.
In case, if the mistake is on your part and you have defaulted on credit card payments, the banks will now give you sufficient notice period to either settle the dues or to inform you that they are reporting your default status to CIBIL or any other Credit Information Company authorized by RBI. In fact, banks shall make sure that they stick to a procedure duly approved by their board.
5. In case you inform the bank that you want to close your credit card account, banks will have to honor your request immediately. More significantly, if you’ve lost your card and want to block it, the banks have to follow your instructions and do it the minute you inform them, and the formalities, if any, including the lodging of an FIR, should follow within a reasonable period of time.
Another customer-friendly recommendation by RBI has included is the provision of an insurance cover by banks to take care of the liabilities arising out of lost cards. According to this only those card-holders who are ready to bear the cost of the insurance premium shall be provided an appropriate cover with respect to lost cards. In addition to the blocking or closing of a credit card, RBI has also issued guidelines on its issuance. An important suggestion it gave that you will not be obliged to share personal information or card history with any other agency, and the bank cannot make it conditional for issuing a card. It is, however, mandatory to share it with Credit Information Companies/CIBIL.
Moreover the direct sales agents or direct marketing agents (DSAs/DMAs) have been instructed to provide to customers only the documents or papers that have been authorized by banks. In turn, the banks have been advised to design the terms and conditions in such a way that no dispute arises between the customer and bank at a later date. Most of the complaints of misselling are credited to DSAs/DMAs.
As for the constant complaints about telemarketers, RBI has suggested that banks should register all their telemarketers with the Department of Telecommunications.
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