Did you know you can default on a credit card you never owned? Here's how you can prevent identity theft
IT WAS the last thing that Ajay Deshpande would have worried about. All the formalities were done. The documents were in order, the loan application for an education loan for funding his daughter's education had been filled and submitted to the bank. Deshpande was confident he would get the loan since he had applied for a small amount, more so as his daughter had secured admission in an institution of national repute. Therefore, he was stunned when the bank told him that his application had been rejected because he had an 'unfavourable' credit history which was reflected in a credit information company's database.
A horrified Deshpande found out that his socalled credit history comprised records of credit card defaults that were written off by a leading private sector bank. He was certain that he had never signed up for a card in his life, let alone using it. He had never received any credit card bill either. Investigation showed that the address listed in the bank's database, too, was fictitious. Clearly, he had become victim of a fraudulent transaction where a trickster had managed to get a credit card issued in Deshpande's name. When he reported the matter to this card issuer, the situation deteriorated. Instead of acknowledging and rectifying the error, the bank despatched recovery agents to his house to coax him into 'repaying' the amount, causing considerable mental harassment. "The agents violated RBI norms laid down in this regard. They even landed up at the school where his wife was employed and resorted to intimidation, resulting in severe embarrassment for her," says VN Kulkarni, chief counsellor with the Bank of India-sponsored Abhay Credit Counselling Centre, whom Deshpande approached for help. Finally, after months of complaints and innumerable follow ups with the card issuer, his records were corrected and now, the company has sent a letter of apology to him.
While Deshpande's case did have a reasonably satisfactory conclusion, not everyone can hope to be that fortunate. Fraudsters will forever be on
the lookout to con people which means there is always a chance that you could
be the next unsuspecting target.
Identity theft, though not rampant in India, is certainly not unheard of. It is important you do not let your guard down while dealing with direct selling agents or even bank officials as a recent Citibank incident has demonstrated. Many banks, taking note of the constant risk, have set up fraud detection units or have outsourced the task to external detective agencies with forensic skills. However, some fraudsters can always manage to circumvent this filtering process and get a credit card issued without your knowledge. While you can't prevent scamsters from being on your trail, you can arm yourself with knowledge to help you wriggle out of the situation unscathed. So, keep yourself updated about your repayment record.
Get Your Credit Report:
"It is advisable to keep yourself posted about your credit history at least once in two years," suggests Kulkarni. Thanks to recent developments and more credit information companies entering the fray, obtaining a credit report is now simpler. You no longer have to wait until your loan request is turned down by a bank to get a copy of your credit report. But if your application has been rejected, you can always ask the bank or the financial institution for the copy, which they have to furnish for a fee of up to . 50. Credit information companies like Cibil (Credit Information Bureau) and Experian issue credit reports to individuals on request directly, without the involvement of any bank. Cibil charges . 142 for issuing a credit report while Experian levies a fee of . 138. The payment can be made either through a demand draft or via online channels. You have to submit the required documents to authenticate your identity.
Report Discrepancies:
Until a few months ago, loan-seekers who had the misfortune of seeing their loans not being sanctioned due to erroneous credit reports could do very little to reverse the wrong done to their credit records. Now, things have changed with the credit information bureaus taking an active interest in attempting to get the discrepancies corrected. "We offer a dispute-resolution service free of charge to individuals.
They can write to us at info@cibil.com. They need to provide a few details like the control number, name, address and nature of discrepancy. Subsequently, we approach the lender concerned for revalidation," explains
Arun Thukral,MD, Cibil. In case of Experian, you can download the query application form from its website (www.experian.in) and send the completed form, along with the details and documents asked for, to the company. "We will then liaise with the lender, who will revert with any instruction to amend the data after they have investigated the matter. Lenders have the ability to flag data they provide to us as being in dispute," adds Phil Nolan, MD, Experian Credit Information. However, according to the existing guidelines, changes can be effected only after the lender gets back to the credit information company with revisions, if any. "We are not authorised to change any data contained in the credit information report, and can only do so on the written instruction from the lender," says Nolan. And the time taken by the credit granting institution to revert with changes could vary. "By April this year, the structure of our database will see some changes, wherein a provision to indicate disputed records will be enabled," adds Cibil's Thukral.
Launching The Offensive:
Getting a clear picture of the nature of charges against you will help you strengthen your case against the erroneous entry. If alerting the lending institution through this route fails to elicit a positive response, you may have to approach them directly. Remember, touching base with the branch manager or even the customer care cell may not yield the desired results. Make sure you contact the bank's nodal officer or the credit grantor. Their names and contact details are mentioned on the respective banks' websites and that of the Indian Banks' Association (www.iba.org.in/nodallist.asp). If you hit a wall even here, the next step is to write to the Reserve Bank of India's customer service department and the Banking Ombudsman.
While taking all these measures will not help you prevent a fraud, constant vigilance and knowledge about dealing with the impact of a potential scam or an error will help you contain the extent of damage.
CARD TRICKS
While you can't prevent scamsters from being on your trail, you should know how to deal with a sticky situation
• When it comes to dealing with a credit card fraud or misuse, knowledge is your best weapon of defence
• The affected lender is bound to report such defaults under your name. This will create hurdles for your future loan applications
• Instead of running for your credit report after your loan request has been rejected, apply for one every two years
• You can get a copy of your credit report from credit information companies like Cibil and Experian for a fee
• If you spot discrepancies after scrutiny, you can alert the credit information bureau which, in turn, will inform the lender concerned
• If your version is found to be accurate, your records will be updated accordingly. But, Cibil or Experian will act only on the instructions of the lender
• If the lending institution sticks to its stand, you can approach its nodal officer directly to make your case.
• If the nodal officer fails to resolve the grievance, you can approach RBI's customer service department and the Banking Ombudsman's office
