Credit cards related complaints increased in 2008-2009

The report said RBI has started taking ‘class action’, by issuing general directions to all banks to protect their customers. Such general directions are issued by the controller in cases that could benefit not only the applicant, but all those consumers similarly placed without having to move toward their respective banks.

The report said RBI has initiated class action against a foreign bank regarding the mode of calculation of interest rates on deposit accounts. A PSU bank was advised to recalculate interest rate on all housing loans as per terms of agreement entered into with all the borrowers without their application for relief. Yet another PSU bank was asked to recredit insurance premium that was debited to savings bank account holders without their agreement under the group insurance scheme.

Customer complaints relating to credit cards amounted to 17,648, comprising 26% of the total complaints in 2008-09 and up 74% from the previous year. However, it may be noted that the user base of credit cards rose during 2008-09 — from 137.2 million to 170 million, up 24%. RBI pointed out “that does obviate the need for better service and transparency at the point of sales by banks”.

The types of complaints pertaining to credit cards continue to be those related to issuance of unsolicited credit cards and insurance plans forced on cardholders for which customers are subsequently billed. There are also complaints where customers were offered free cards and subsequently billed annual charges for them. Other complaints include the bank’s inability to write off the card balance against the credit insurance cover after the cardholder’s demise.

A general source of these complaints continues to be difficulty in accessing the credit card issuers and the poor response from the call centres.