While plastic has become the scourge of the planet, plastic money, on the other hand, has become virtually indispensable. As India moves towards becoming a paperless and cashless economy,credit cards can be very useful forsecuring extended credit periods.However,if not used with care, they can be a sure-fire recipe for financial disaster.
Even when the card holder uses the card with care and pays all dues on time, there may be cases when he ends up in a dispute with the card company. Credit card disputes can occur over incorrect interest rates charged, erroneous or fraudulent transactions, payments demanded even after the card is closed and settled, or charges levied even for “free” cards or unsolicited upgrading of cards.
Most card holders have no clue on the grievance redressal mechanism to pursue in such cases and sometimes end up losing money due to wrong steps taken. Here is what you can do if you find yourself in the unfortunate situation of a dispute with your credit card issuer.
Collect all documentation: As a first step, it is important for the cardholder to collect all documentation possible. This is one reason why you should maintain payment records of closed credit cards as well.
Take the case of Raj who had closed his credit card from a leading bank 12 months ago by paying the outstanding amount in full and final settlement. The bank contacted him after 12 months of closing the card with a letter that some dues were still pending. As Raj had the correspondence from the bank stating that the card balance was settled, he was not required to undergo the hassle of proving his bonafides in disputing this claim.
Maintain all correspondence in writing: Nowadays all banks have a customer care cell which handles complaints and queries. As a result, most credit card holders get in touch with the call centre and file the complaint. While this is important for immediate actions like blocking the card, a telephone call may not be sufficient proof when you dispute wrong credit card charges.
Always maintain all correspondence in writing – either by sending a letter with acknowledgement due or by email, which is quicker and more preferred.
Approach the bank: After collecting all the proofs, the cardholder should first approach the bank with the complaint. Banks usually give details of the mode of submitting a complaint on their website along with the name and contact details of the concerned officer. The level of escalation is also specified. As credit cards are not issued at the branch level, you may be redirected to another person even if you complain at the branch.
However, as a first step, it is recommended to approach the nearest branch of the credit card company and lodge the complaint. Remember to give all the required details while lodging the complaint. You should also email your complaint to the bank's grievance redressal officer concerned – details of which will be available either in your credit card statement or on the bank website.
Credit card holders are given a time limit of 60 days for filing the complaint. RBI has directed all banks to mention the escalation process of an unsolved complaint and also establish a system of acknowledging such complaints.
Approach the office of the Banking Ombudsman: Banks and credit card companies are required to redress grievances of customers promptly and provide all documentary evidence for the same. However, if within 30 days of lodging the complaint, the customer does not receive a favourable response, he can approach the office of the concerned Banking Ombudsman for grievance redressal.
RBI has constituted the Banking Ombudsman scheme, which came into force from Jan 1, 2006 to redress customer complaints in banking services. Banking Ombudmen are persons appointed by RBI and are present in different cities in the country. Details of the Banking Ombudsmen are available with the banks and also on RBI’s website.
A complaint can be filed by writing on a plain paper or online in RBI’s website or by writing an email to the Banking Ombudsman. Banks also prescribe a format for filing a complaint. Whatever be the mode of filing the complaint, one should remember to include all relevant details in the complaint. The Banking Ombudsman then passes the order after studying the merits of the case.
Approach the appellate authority: In case if you are not satisfied by the order passed by the Banking Ombudsman, you can approach the appellate authority against the Banking Ombudsman’s decision. The Deputy Governor of RBI is the appellate authority. The appeal should be filed within 45 days of receipt of the award by the Banking Ombudsman. The appellate authority will then decide on how to deal with the appeal.
Credit cards can be risky if not used with care. It is up to the credit card holder to secure his card information, use his card carefully and constitute necessary checks in place like using a secure 3D PIN for online transactions or using a chip-based card to secure transactions in merchant outlets. However, despite all these checks, if a dispute arises, the credit card holder can follow the above steps to redress his grievance.