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

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...

How much to invest in gold ?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) Let your motivation dictate the share of the yellow metal in your portfolio Enough has been said and written about gold as an investment option. The latest argument is that the craze for gold among Indian households is endangering our country's balance of payments. The policymakers are busy trying to find ways of discouraging investment in gold, but if households keep the common good in mind, they would be paying the market price for gas cylinders as they do for, say, their mobile phone bills. After all, private decisions are driven by private motives. So, how should a household look at gold from its own perspective? Gold is primarily acquired for its merit as a store of value. Even if the worst crisis hits a family, the gold that it holds could be put to use anywhere in th...

Compared to Bank FDs, Debt Mutual Funds are more Tax-Efficient

It is a security vis-a-vis returns battle between bank fixed deposits and debt funds In the past few months, banks have been consistently increasing their rates of interest on different fixed deposits. And after the Reserve Bank of India's Annual Monetary Policy, even the saving deposit rates are up at 4 per cent. For a six-month fixed deposit, you can easily get a rate of anywhere between 6 and 7 per cent annually. However, experts feel if one is looking to invest for less than a year, debt funds could make a better choice. The reason: Liquid funds and ultra short-term funds are giving annualised returns of 8 per cent. Financial advisors suggest retail investors opt for mutual fund schemes as they are more flexible and give higher post-tax returns. Opt for fixed deposits only if you are comfortable being locked-in for the tenure as a premature exit can attract a penalty. If your main aim is to ensure liquidity, debt funds are preferable. Though a fixed deposit gives you a...

Save Tax With Mutual Funds

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       Mutual funds are ideal as long term investment avenues for retail investors. To encourage investments in this avenue, the Government of India offers investors a spate of tax benefits thus ensuring maximum benefit from mutual funds held beyond a year. Sample some of the key benefits and refer to the table for a detailed list of tax rates for different types of schemes ·        Avail deductions under Sec 80C of the Income Tax Act by investing up to a maximum of Rs. 1 lakh in designated Equity Linked Savings Schemes (ELSS). Such investments have a compulsory lock in period of 3 years. ·        First time retail investors in equity with a gross total income of up to Rs. 12 lakh can invest up to Rs. 50,000 in specific MF schemes un...

Reliance Health Total

  Reliance Life Insurance has launched Reliance Health Total, a non-linked, non-participating and non-variable health insurance plan . It provides a fixed benefit cover for hospitalisation, critical illnesses and surgeries. The customer can also make a claim for over-the-counter health-related expenses. This is a regular-pay, five-year plan that can be renewed till the age of 99. The plan comes with two options: customers can choose a higher medical reimbursement benefit or a higher sum insured. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - I...
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