Hi,

My question is regarding options I have.

I was holding SCB credit card from 2000 onwards. In 2004 therewere some overseas transaction unauthorised by me.

I promptly disputed the transactions (totally 6). I also blocked the card to avoid further transactions.

Rectification procedure from SCB has taken delay. For 2 transactions it was rectified with 2 months & other 4 they reverted back amount only after 15 months.

Since I was sure those are fraudulent transactions, i said i won't pay the amount. SCB kept on adding Interest charges, late charges etc.

Once the disputed amount is reverted, interest charges are not waived off. I was against this, but they didn't bulge, so left the issue as it.

What was supposed to be 4K as balance in aug 2005, has now become 1.3 lakh. Can you believe that. They also added me as defaulter in CIBIL list.

I want to clarify following things.

1) As per RBI circular all disputes need to be rectified within 60 days & due care needs to be taken before reporting as defaulter.

2) what is our indian law regarding interest charges/penalty for disputed amount till it is settled.

For ex US law from http://dca.lacounty.gov/tscreditcarddispute.htm

Do I have to pay the disputed amount?

No. You can withhold payment of the amount in dispute and the finance charge on that amount until the card company investigates the dispute.  You can also withhold the interest payment on the disputed amount.

You must pay the amounts that are not in dispute.

 3) Can they keep on slapping charges(interest/penalty/annual fee) even though service is not used for last 6 years.

What legal action I am entitled as a consumer

It is pertinent to raise some tangible and pertinent questions to the bank.

--If the customer is extorted to pay disputed amounts and later on investigations the disputed amounts are deleted from the bill, then shall the bank pay same interest, finance charges, to the customer as it charges from the customer? What interest bank has agreed to pay in its policy? Does bank convey such policy to the customer?

--Shall the bank refund the extorted amounts to customer if it is not able to complete and conclude investigation? Does the bank agree to provide documentary evidence to customer regarding the investigation?

In your case bank has reversed all amounts disputed by you and hence has to reverse all consequential amounts e.g. interest, late payment, finance charge, taxes etc. bank has to supply a notice to the customer before reporting the details of the customer to credit bureaus and credit rating agencies. Did bank supply any notice to you?

From publications and posts some of which are available at LCI also it can be noted that  it is a set precedence and strategy of the bank to report the genuine customer to the credit rating agencies including CIBIL and then coerce an force the customer to pay the charges to remove the name from CIBIL.

Customer can obtain credit report from the bank by paying a fee which can not be more than Rs.50/-. In your case you can demand credit report from the bank maintained with:

·                  CIBIL – Credit Information Bureau (India) Limited (www.cibil.com)

·                  Experian - Experian Credit Information Company of India Private Limited (www.experian.in)

·                  Equifax - Equifax Credit Information Services Private Limited (www.equifax.com)

·                  Master Card negative list ( earlier Satyam)

 even without charges along with copy of the all communications sent by the bank to these agencies while asking to include your name in the list of defaulters and to the bank concluded its investigation and reversed the charges, and finally to record the reversal as “written off “status. Bank should have updated the status as “wrongly reported’ and bear the onus and consequences on it.

 Bank shall not supply these communications easily (email/letter/fax) etc and you may to obtain a court order.

You may on your own send an email to CIBIL to correct the status by attaching the investigation report supplied to you by the bank with a copy to the Chairman of the bank, and demand reply from bank.

You may apply resources to educate the bank customers who are in your circle and let them take their decision to continue or sever their relationship with the bank.

You may announce to the bank that you shall be constrained to go public with your complaint, and approach institutions of print and electronic media, police, courts of law, Govt. regulator. Ministry, ministers, NGO’s, social and public forums etc at their cost and consequences if bank fails to comply to instructions and provide relief say in next 7 days, and you shall collect the charges of seeking all charges for legal advice, and legal actions, you may have to take.

 If the bank fails to comply you may approach a competent and experienced lawyer and proceed under expert advice e of your lawyer.

You can see the decided consumer cases against this bank, at various sites and at CONFONET, and take a stand that this bank is habitual offender.

Dear Arumugam,

Repeatedly I have been mentioning in my past replies to credit card queries,regarding credit card recovery mafia operating. Nothing will be done by these banks,once you are listed as defaulter.If your name is listed in CIBIL,it will run for 8 years.Even if you clear all your dues,you are not eligible for any kind of loans from any financial institutions.File a complaint wi the banking ambudsman and you can even report the matter to the consumer forum.

Hi,

Thanks for answering the questions. 

Coming back to the answer. No SCB Bank didn't contact me before reporting to CIBIL. I am not sure letter is sent to the address where i resided. But for sure there was no email communication.

I was out of India for between 2006-2011, so i am not sure any letter is sent during the period. Only after returning to India, i came to know the same has been reported to CIBIL during 2009.

I am planning to take legal action against the wrongful communication to CIBIL. 

One more question, I had 3 cards from SCB during that time. Since I disputed transactions made in one card, i stopped using/paying the card until disputes are resolved. In the mean time, SCB moved back some amount from other two cards to the disputed card. Since this process was continuing i stopped using all the cards.

Is it legal to move amount from one account to other account?. Even though I had zero balance on other 2 cards due to this move SCB made me to have balance on other 2 cards. So in all now all the three cards had pending balance & keep on increasing at the rate of 40% year. 

Is it correct to move amount from one account to other without my consent?. 

Dear Mr.Ramaswamy,

In your first query you mentioned that you had only one card.Now you say you had three cards.If you are not clear in your query,our views and answer will differ.Any way act as adviced earlier.

Mr. Devalla has given prudent advice. You should post all facts.

You have posted:

--"Even though I had zero balance on other 2 cards” and "SCB moved back some amount from other two cards to the disputed card. " Both statements are contradictory.

If bills of other two cards were paid in full how SCB can transfer some amount from these cards to 1st card? It is felt that no card from SCB is life time free membership charges, so even if card member pays the transactions for which card is swiped, membership charges remain balance. You need to explain this to company and obtain clarification from company.

On the other hand your lawyer can take stand dispute which was registered with the company within specified time but company did not resolve and inform the card member in specified time, and instead of providing provisional waiver of disputed amounts and complete resolution company preferred to complicate the matter and extort exorbitant charges.

--"For 2 transactions it was rectified with 2 months & other 4 they reverted back amount only after 15 months."

Did the company inform that they have not been able to investigate the other 4 transactions? or other 4 transactions are found as made by card member? Did you post reminders in writing? What was the conclusion of the company?

Apparently company has "written off" these 4 transactions with or without the reason for writing off and since these transactions are written off as per practice the “written off" and settlement status is viewed as bad and lowers the credit rating of the card member.

Kindly look into the attachment.

You may approach your lawyer with all record of emails, complaint numbers, letters, phone calls etc and let your lawyer handle the matter while you can focus on your career and line of business.

Attached files may be useful.

Mr.Arumugam,

AS far as credit cards are concerned,each card has a different account.The bank cannot club each other.If you hold a banking account in the same bank,credit card dues can be put on lien to your account.That means whatever you deposit in your account,will immedately be transferred to the lien account.

Mr. Devalla has given valuable advice. Kindly follow it.

The banns claim that it is a law that bank enjoy general lien on all a/c. It is seen bank do not hesitate to excercise lien even while case is in progress in a court of law, consumer forum and if a legal notice is served bank do not take time to vacate the lien e.g. HDFC Bank.

Kindly look into the attachments:

----RBI CC Operation of the banks

8. Right to impose penalty

The Reserve Bank of India reserves the right to impose any penalty on a bank / NBFC under the provisions of the Banking Regulation Act, 1949 for violation of any of these guidelines.

---- banks cannot exercise lien over the personal account

(v) Lien

Banks have a right to exercise lien under section 171 of the Indian Contract Act against the dues from

constituents/customers. However, the banks cannot exercise lien over the personal account of a customer on the ground

that money was due to the bank in another account where he acts in a different capacity, if there is no agreement to that

effect.

In Union Bank of India v/s K.V.Venugopalan where it was held by the court that the fixed deposit money lodged with the bank is strictly a loan to the bank. The banker in connection with the FD is a debtor .The depositor would accordingly cease to be the owner of the money in fixed deposit .The said money becomes money of the bank, enabling the bank to do as it likes, that however, with the obligation to repay the debt on maturity .In the same ruling it was further held that the bank being a debtor in respect of the money in FD, had no right to pass into service the doctrine of banker’s lien and the money in Fixed Deposit.

So the answer as per the judgment is lien is a legal right of bankers though, but does not extends to fixed deposits

Incidentally, a group of lawyers in Chennai have formed a Trust under the name of Centre for Social and Economic Justice and they have filed public interest litigation in the Madras High Court last month to strictly enforce the master circular mentioned above. In this petition, they have included the Finance Ministry, RBI, IBA and all the credit card issuing Banks as the respondents. The details of the same are available at

www.creditcardwatch.org

The Banking Codes and Standards Board of India (BCSBI)
..:: BCSBI ::..

The Credit Card Holders Association of India
Credit Card Holders Association of India

Please also read the following circulars from RBI. http://www.creditcardasson.org/RBI%20guidelines%20on%20credit%20cards.doc

Defeat is not final when you fall down. It is final when you refuse to get up.

Thanks for the input.

Sorry if I confused in my prev query.

I was holding 3 cards at that time. 2 VISA & 1 master. Lets call them card A, B, C.

I was having dispute only for card "A". So i stopped using that card. I was using & paying on time for cards "B" & "C". 

SCB was charging interest + late charges for card "A". I wasn't bothered since i am sure disputes will be over & these charges will be reversed back.

Since i stopped paying on card "A". SCB moved some amount from card "B" to card "A".  Since i was regularly paying for card "B", i was infact paying for card "A" too.

Once i realized & stopped paying for card "B" too, same game played on card "C". 

Smart game. What was supposed to be interest + late charges on one card, now becomes multiplied by 3. 

I remember the incident played by CC companies some years before it was brought in light. Lets say you avail overdraft facility & assume if you cross the limit lets say they charge 500 per instance.

My credit limit is 10000 & used credit is 9000. On a particular day i did 9 transactions of 100 each & one transaction of 1100. 

So i am above the limit (9000 + 900 + 1100) = 11000. 

Now comes the interesting part. Computation of overdraft charges. 

Apply smaller transactions first. so overdraft charge is applied for bigger amount(1100). In this case 500 only.

Do it other way around. Apply big transaction first (9000+1100) is well over limit. So next 9 small transactions will again draw overdraft charges. So in all 5000. Smarter move right.

Coming back to the questions. No i wasn't updated on the progress of disputes. I will update if i have any progress.

What is the chances of me getting home loans. Assume zero liability today & income is well over the asking amount. Also assets i hold too is valued much more than asking home loan.