Skip to main content

Credit Card - How to guard against fraudulent activities adopted by them

IF ONLY life were as good as the ads portrayed it to be. You could travel to exotic locations, shop till you drop, indulge in the choicest delicacies — with nothing but that sleek plastic card in your wallet. In fact, freedom is the trump card that credit card companies always play up to sell their gold, silver and platinum cards.


However, the reality is that when you come back home from that fancy vacation or shopping spree, at your doorstep will lie a bill that, as much as you try, you cannot wish away. And if you’re not the kind of person who cares for detail — remembers where or when you spent what — chances are that you may be paying more than you actually spent. To help you guard against fraudulent activities by credit card issuers (generally banks and NBFCs),


COMMON ACHES


If you’re one of those who haven’t given this a thought, here is a chance for you to find out if you are being victimised or not. You need to know that no bank has the right to forcibly issue a credit card. But there have been cases when the bank has sent individuals credit cards without their consent and then begin to charge them for the same.


However, one of the most common complaints among individuals has been with regard to the interest rates. In some cases, individuals have found that while they were issued a card at 0% interest, after the initial period of a few months, they were charged interest. Some have also experienced a sudden increase in their interest rates. While banks have the discretion to make changes, the RBI has now released guidelines stating that the total annual percentage rate cannot be more than 30%.


Another pretext that credit card companies often use is that of late payment, especially as interest begins to get charged on all unpaid balance. This often happens to people who put their cheques into drop-boxes on the day when the payment is finally due, especially as there is no mechanism to mark the date in which you have deposited the cheque. Moreover, a few banks have recently introduced the concept of charging people for not using their credit cards. There could also be innovative methods adopted especially with regard to insurance covers on credit cards. For instance, a reputed credit card issuer who offered an insurance cover on the unpaid balance, initially promised to pay the premium. However, after three months, the premium was charged to the credit card holder.


IS IT UNFAIR?

The list above is by no means exhaustive. In fact, it is only the tip of the iceberg as the means of defrauding multiply on a regular basis. Acknowledging this, the RBI released fresh guidelines on the credit card operations of banks in 2008. However, while the RBI has issued a list of guidelines, these are generally not issued to the consumer. Experts, however, say that if a company uses a misleading or false statement to sell a product such as promising to offer a free service and then charging for it, then this would be unfair. Moreover, withholding of information by the credit card issuer is also considered an offense. Banks are also expected to be transparent especially in their terms and conditions. In fact, the RBI has ordered that the terms and conditions should be printed in a size that is easy to read and in a manner in which it should be easy to understand.


APPROACH THE AUTHORITIES

If an individual finds that there is something wrong with regard to credit card transactions, the first thing to do is to create a record of the incident by writing to the head office of the card issuing organisation. Most banks now have a dispute redressal mechanism in place these days. If you are registering a complaint on the phone, remember to note the name of the person who you are speaking to and the time and date at which the conversation took place. If your complaint is not acknowledged and no action is taken within a month, then you have the option of lodging a complaint with the banking ombudsmen appointed by the RBI. The other option, which is available to individuals, is to appeal to the consumer courts. But the process tends to be more complicated in this case and often takes much longer.


SAVE YOURSELF


In addition to finding means to correct follies, you also need to constantly guard against them. For instance, when an issuer tries to sell you a product on the phone, you must ask the person to send the terms and conditions, application forms and so on before you agree to take a credit card. If you decide to take the card, make it a point to file those terms and conditions safely. Also, ensure that all verbal promises are given to you in writing, so that you have a record just in case a dispute comes up. Make it a priority to fill in all application forms yourself instead of simply signing on the dotted lines and allowing others to fill your forms. Also choose your credit card company only after reviewing all the specifics such as interest rates, processing charges and so on. If you are faced with the same problem for the second time, then use the opportunity to get the best bargain from the bank, which will be concerned about retaining customers.


Steps to follow if you feel defrauded

  • Send an official complaint to the head office. Keep a copy of the letter
  • If the complaint is registered via phone, note down details like the name of person, date and time of conversation
  • If no action is taken, then approach the banking ombudsmen
  • Alternatively, you could appeal to the Consumer Court

Popular posts from this blog

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...

ICICI Lombard to provide weather cover in 10 states

ICICI Lombard General Insurance Company has been given the mandate to provide weather-based crop insurance for rabi season (2010-11) in Madhya Pradesh, Bihar,Tamil Nadu, Karnataka, West Bengal, Chhattisgarh, Jharkhand and Himachal Pradesh.    The insurance company will cover 69 districts — 30 loanee districts (farmers who have taken loans) and 39 non-loanee districts. The major crops that ICICI Lombard covers for the season are winter paddy, cotton, wheat, mustard, barley, maize, onion, potato, tomato, lentil, peas, arhar, jowar, fenugreek, coriander, cumin, methi, isabgol, brinjal among other crops.    Weather-based crop insurance provides cover against weather-related risks such as excess or deficit rainfall, variations in temperature and fluctuations in humidity. This scheme facilitates immediate compensation based on certified data collected from independent third party bodies such as Indian Meteorological Department ( IMD ) and National Collateral Management Services Ltd. ( NC...

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...

Financial Planner - Do Integrity & Dependability Check

How does one can find value proposition when it comes to financial planning, which is a new area? There is nothing to benchmark it with. So, how does one figure what is the right fee to pay? Look at what you want. You probably want to hire a financial planner to get a blueprint for your life ahead and want to know how to achieve your goals. For creating a tailor-made financial plan, our experience is that it takes 25-30 man-hours in all. Taking an average of Rs 500 per hour for hiring the services of a qualified financial planner like one who has a CFP(CM) certificate, the fee would come to Rs 12,500 to Rs 15,000. But the per-hour rate can be higher or lower depending on the process adopted, the experience and expertise of the planner, etc. That's how planners arrive at their fee. Now, is that value for money? For that you need to find out what benefits you would derive by engaging them. The financial plan will give you clarity, direction and pathway to achieve your goals. Th...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now