India's banking ombudsmen received as many as 3,087 credit card-related complaints against foreign banks and 7,020 such charges against Indian banks in the financial year 2007-08.
The number of credit card-related complaints against foreign banks and Indian banks stood at 2,187 and 5,501, respectively, during the previous year, according to Finance Minister P Chidambaram.
The finance minister said in Rajya Sabha recently that the Reserve Bank of India had undertaken a study on the credit operations of banks, which also included issue of unsolicited calls.
*Credit Card Goof-ups by Banks
In the wake of the global economic crisis, it is important to note that banks in India are not very stringent in terms of assessing the credit worthiness of people before doling out plastic money. The credit card outstanding dues with all banks amounted to Rs 26,596 crore (Rs 265.96 billion) as on May 13, 2008.
It's only when defaults start rising that banks sit up and take notice. Many a times, a card may be misused by someone else taking the 'defaulter' by surprise. Despite the RBI's strict guidelines on issuance of credit cards, the problem persists and complaints continue to pile up against banks.
The central bank guidelines provide that any loss arising out of misuse of such unsolicited cards will be the responsibility of the card issuing bank only and the person in whose name the card has been issued cannot be held responsible for the same, Chidambaram said in the Rajya Sabha.
He added that an RBI circular issued earlier advised banks that unsolicited credit cards should not be issued.
"In case an unsolicited credit card is issued and activated without the consent of the recipient and the latter is billed for the same, the card issuing bank shall not only reserve the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed," the RBI circular stated.
The International Consumer Rights Protection Council states that ICICI Bank issued a credit card to a person who passed away 12 years ago. This card was misused and the statement was sent to the person's son for payment of Rs 36,000.
Recently, after a family of four committed suicide in Mumbai, it was found that two members of the family had 72 credit cards! How did they manage to secure so many cards? Who will pay up in cases like this?
The number of complaints received by the banking ombudsman offices has constantly increased, with more than a three-fold increase in 2005-06 from the previous year after the Banking Ombudsman Scheme 2006 was notified.
The increase was also observed in the year 2006-07 with a 22 per cent rise over the year 2005-06, said the Reserve Bank of India's annual report on banking ombudsman.
In 2006-2007, SBI Cards topped the list of complaints from credit card-holders, with the banking ombudsman receiving 2,654 complaints against it. There were 1,451 complaints against ICICI Bank.
In 2005-06, the ombudsman offices received 31,732 banking-related complaints. In 2006-07, the number of complaints received was 38,638.
The RBI had first introduced the Banking Ombudsman Scheme in 1995 to provide expeditious forum to customers resolving their complaints relating to banking services.
The complaints often related to deposit accounts, deficiency in servicing of loans and advances and delay in collection of cheques/bills.
In 2006-07, the largest share of complaints received were credit cards complaints, which accounted for 20 per cent. Among the complaints received, there were 7,688 credit card-related complaints and complaints on deposit accounts stood at 5,803.
The non-issue of credit cards, issue of unsolicited cards, non-despatch of account statements on time, levy of excessive service charges, levy of late fees despite payments being done on time are some of the common complaints.
Many people also face the problem of banks refusing to cancel credit cards, freezing of cards without informing the cardholder and harassment by recovery officers.
Here's how can you get your banking-related problems solved...
The RBI states that in the case of any banking-related complaint, the customer has to first try to get a solution from the bank. He can file a complaint before the Banking Ombudsman if a reply is not received from the bank within one month of the bank receiving his complaint. He can also move the Banking Ombudsman if the bank rejects the complaint or if he is not satisfied with the reply given to him by the bank.
The complainant can file his/her complaint in any form, including online. You can file your complaint onlinehttps://secweb.rbi.org.in/BO/compltindex.
The customers can also appeal to the Reserve Bank of India against the awards given by the Banking Ombudsman
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