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...

Myths about Exchange Traded Funds (ETFs)

1) ETFs Are Similar to Individual Stocks: Like MFs, ETF consist of an underlying portfolio of securities that's designed to follow a specific index or investment strategy. Hence, they are as diversified as various mutual funds. 2) ETFs Only Invest in Equity: Since they are listed on the exchange, the general belief is that ETF only consists of equity asset class. Globally, ETFs are available across asset classes – equity, debt, commodities, real estate and so on. In fact, over the past couple of years, India has also seen the emergence of Gold ETFs. 3) All ETFs Are Index Funds: ETF started as a fund which used to track indices and hence they were branded as index funds that are listed. However, ETFs have progressed rapidly and are no longer associated only with passive index funds. Globally, we have seen the launch of actively-managed ETFs. In India, also we recently saw the emer gence of fundamentally-weighted ETFs on Nifty, which busts the myth that ETFs are index funds and can...

REC Tax Free Bond Issue

Tax Saving Mutual Funds Online Current open Infra Bond Application form   Download REC Tax Free Bond Application Forms REC (Rural Electrification Corporation) is going to issue tax free bonds and the issue will open on March 6 2012 and will close on the 12th of March 2012 When you buy 80CCF infrastructure bonds, the amount you invest in those bonds get reduced from your taxable income but in these bonds that's not going to be the case. The interest on these bonds will be tax free and they are similar to the other tax free bonds like the HUDCO, NHAI and PFC issues. For the two of you interested in knowing this – these bonds are tax free under Section 10(15)(iv)(h) of the Income Tax Act. Now on to the issue itself and let's start with the high credit rating that the issue has got. The REC tax free bond issue has been given the highest rating by all issuers since the government owns the majority stake (66.8%) in REC, it has been consistently profit making,  this is a se...

Good Loan

Why Is It A Good Loan?: Loans against gold are cheaper and better than personal loans as the former are available at lower interest rates. In contrast, the interest rates on personal loans are not standardised and can vary from bank to bank. Also, a personal loan depends on a host of factors including, the borrower's salary, profession and the purpose for which the loan is being taken.      For instance, the interest rate on a personal loan of 5 lakh falls in a wide range of 15-30%. But loans against gold are available for as low as 11%. Secured borrowing such as a loan against gold, investments or property is cheaper because it is backed by some assets, which command a good value at any point of time. If the borrower defaults on the loan, the banks can liquidate the assets to settle the loan account.    Being a secured loan, the risk of default and credit losses is significantly lower in this loan compared to other forms of loan for personal use. Given the lower risk, gold loa...

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