This Blog has now moved… October 5, 2010
Posted by vinodchand in Credit Consumers Association of India News.add a comment
Dear Friends,
This blog has now moved to its own domain hosting site. This blog is no longer being updated.
For an updated website visit us at www.creditconsumersassociation.org
Thank You for visiting us here, we look forward to being of service to you at our new web site address.
Vinod Chand
Hon. General Secretary.
Credit Consumers Association,
Mumbai, Maharashtra, India.
Banks come visiting this blog! February 25, 2010
Posted by vinodchand in Banking, CIBIL, Credit Card Issues.add a comment
Worried banks, including ICICI Bank, ABN Amro, Morgan Chase, etc. have been recent visitors to our blog.
Goes to show that banks are taking note of the Cheques as a Collateral verdict of the Bombay High Court. If only someone talked sense into these banks about doing business in a fair way, there would be no need for an organization like ours to exist.
But bottom line and fat bonuses can not be had in doing business the fair way!
RBI to set norms for card bills February 24, 2010
Posted by vinodchand in Banking, CIBIL, Credit Card Issues, Credit Cards, Credit Consumers Association of India News.add a comment
News Report appearing in Times of India dated 24th February 2010
NEW DELHI: If you are among thousands of credit card holders who have been blacklisted in the banks’ central database even after dues have been settled, there’s some relief coming your way. RBI is framing guidelines telling banks not to declare someone a defaulter if the person has settled his or her account with the bank after paying the negotiated amount.
At present, even if a card holder pays the negotiated amount, the client is continued to be treated as a defaulter in the bank’s records. Because of this, the name features in the defaulters list prepared by Credit Information Bureau of India Ltd (CIBIL), which depends on the information provided by banks for the purpose.
Ever since CCAI came into existence we have been representing to the regulator about this fact. It has taken them four years to wake up to this menace. I am sure one of the RBI officers must have fallen into this trap and woken up to the problem. Otherwise RBI is a giant that sleeps.
New Rules for the Credit Card Companies in US. Why can’t they follow them in India? February 20, 2010
Posted by vinodchand in Banking, Credit Card Issues, Credit Cards.add a comment
The Federal Reserve’s new rules for credit card companies mean new credit card protections for you. Here are some key changes you should expect from your credit card company beginning on February 22, 2010.
What your credit card company has to tell you
When they plan to increase your rate or other fees. Your credit card company must send you a notice 45 days before they can
o increase your interest rate;
o change certain fees (such as annual fees, cash advance fees, and late fees) that apply to your account; or
o make other significant changes to the terms of your card.
If your credit card company is going to make changes to the terms of your card, it must give you the option to cancel the card before certain fee increases take effect. If you take that option, however, your credit card company may close your account and increase your monthly payment, subject to certain limitations.
For example, they can require you to pay the balance off in five years, or they can double the percentage of your balance used to calculate your minimum payment (which will result in faster repayment than under the terms of your account).
Post Dated Blank cheques can not be used as collateral February 20, 2010
Posted by vinodchand in Banking, Credit Card Issues, Credit Cards.add a comment
In a landmark judgment, Bombay High Court has acquitted a person against whom a cheque bouncing case had been registered by a lending agency (a co-operative bank in this case) when his cheques given at the time of sanction of loan bounced.
Under the Negotiable Instruments Act, a cheque that bounces can lead to criminal prosecution of the issuer of the cheque.
It has been our case that Banks and other lenders obtain blank post dated cheques from the borrower when they give a loan, especially a personal loan where they normally advertise that security or collateral is not required.
But during the sanction process they do take blank post dated / undated cheques from the borrower.
We have raised this matter with RBI in our letter to the Governor but there has been no response till date.
Now we do not require a response from the RBI because in a landmark judgment, Justice P.R. Borkar of Bombay High Court has held that such cheques obtained before the sanction of loan can not be used as an excuse for speeding up recovery of bad loans by using the threat of prosecution under the Negotiable Instruments Act.
What does this mean to me and you is that when a bank threatens to use your post dated cheques and drag you to court if they bounce, tell the bank to just go ahead and deposit your cheques. They can not drag you to court because the cheques have not been issued in discharge of an existing liability. They were obtained by the bank in discharge of a future liability, which according to the judgment does not hold water under the Negotiable Instruments Act.
Clean Comedy from Tim Clue – Debt February 18, 2010
Posted by vinodchand in Credit Card Issues, Credit Cards.add a comment
Credit cards evil by nature? February 18, 2010
Posted by vinodchand in Credit Card Issues, Credit Cards.add a comment
Several features of credit cards make them different from traditional forms of lending and encourage high levels of consumer debt by taking advantage of “consumers’ cognitive and behavioral vulnerabilities,” Adam J. Goldstein wrote in the latest issue of the University of Illinois Law Review. Goldstein is a former editor at the review who now works for a Chicago law firm.
When issuing loans for cars, home mortgages and other forms of debt, banks conduct a thorough credit screening of applicants. But when the same banks issue loans in the form of credit cards, “people with bad credit histories, as well as those who have declared bankruptcy or who have an income level that is too low to justify the credit lines that they are given, all receive high-interest credit,” Goldstein wrote.
Top 10 fraud hotspots in Britain January 27, 2010
Posted by vinodchand in Banking.add a comment
The next time you are out and about in Cardiff, you might want to be a little careful using your plastic friends – according to a new study, it is officially the worst place in the UK for card fraud.
The annual Card Fraud Index from CPP found card crime in the Welsh capital had jumped by 17% in the past two years. A staggering 37% of people in Cardiff have fallen victim to card crime in the past.
Of course it’s not just Cardiff – London is almost as bad, with 35% of people having been defrauded, followed by Norwich (30%), Southampton (28%) and Leeds (27%).
Worst 10 UK cities for card fraud
City
Percentage defrauded
Here’s the top ten cities where card fraud is at its worst:
Worst 10 UK cities for card fraud
| City | Percentage defrauded | |
| 1 | Cardiff | 37% |
| 2 | London | 35% |
| 3 | Norwich | 30% |
| 4 | Southampton | 28% |
| 5 | Leeds | 27% |
| 6 | Newcastle | 25% |
| 7 | Plymouth | 24% |
| 8 | Glasgow | 24% |
| 9 | Edinburgh | 24% |
| 10 | Nottingham | 23% |
Read rest of the report here
Recovery agents threaten Standard Chartered Bank Credit Card holder. December 7, 2009
Posted by vinodchand in Credit Card Issues, Credit Cards.9 comments
Complaint received by us:
From Mr. O.P. Dhala
I had credit cards of Standard Chartered Bank and there was balance of Rs. 21400 in Nov. 2001.
After receiving threatening calls, i along with one friend went to their recovery section in parel for settlement.
There i was confined and robbed of my personal belongings.
I lodged complaints of threatening to me as well as my family members with the commissioner of police of Mumbai & Navi Mumbai.
In Navi mumbai my NC was registered & in Mumbai my belongings were taken by NM Joshi Marg PS. Infact i was put under pressure to settle the matter by the PI.
I filed criminal case in sewri which forwarded for police investigation to NM Joshi Marg PS. Again i was pressuired by PI to get the case dismissed with a verbal assurance that bank will not ask anything.
i Obliged.
The matter remained dormant till now. Now the bank, perhaps the recovery agents have started calling me again for payment including interest till date.
please advise me.
Our Reply
We are shocked at the story that you are narrating. It shows the Standard Chartered Bank in very poor light and casts aspersions on Mumbai Police too.
Please clarify for us
Please clarify;
- When you say you were confined and robbed of your belongings, where and when did this happen? In the premises of Standard Chartered Bank? or at the Police Station?
- When did you lodge a complaint with the commissioner of police and do you have any documentary proof of the same? If so, can you scan and send me the proof?
- When you say your belongings were taken by NM Joshi Police station, what belongings are you talking about? Are these the same that were taken away at Standard Chartered Bank, Parel branch?
- Name the Police Inspector who pressurised you to settle the account.
- Name the recovery agents and their phone numbers who are now threatening you.
Warm regards
Vinod Chand
Honorary General Secretary
Credit Consumers Association of India
9-12-2009
We now have the details.
Mr. Dhala visited SCB office at Parel along with a friend and offered to pay the dues. A lady whose name is unknown used the foulest of languages and robbed Mr. Dhala of his belongings including his wrist watch, Cash of Rs 130/-, Two credit cards, Spectacles, railway pass, telephone diary, pen, business diary, etc. He was confined because the office has electronically operated doors and he was not allowed to go out. The lady in question also dared Mr. Dhala to go lodge a police complaint and chided him that police was on their payroll and they would still come after him.
When Mr. Dhala lodged a police complaint, Mr. Milind Dalvi (posing as a PRO of SCB) approached the API Mr. Pravin Patil and offered to return the belongings. The API assured Mr. Dhala that once he takes back his belongings all action from SCB will cease. This was 8 years ago.
SCB is now back to its old tricks and Mr. Rahul Shamra, Assistant Manager refuses to acknowledge the problem. He says that there is outstanding on his account and the bank has sent him a lok adalat notice.
We at CCAI have no option but to go public with this issue and expose the shenanigans of SCB.
Vinod Chand
Hon General Secretary
Credit Consumers Association of India
Senior citizen loses 2 Lacs to identity theft December 5, 2009
Posted by vinodchand in Banking, Credit Card Issues, Credit Cards, Identity Theft.add a comment
Times of India Report
SIM card problem costs senior citizen Rs 2 lakh
Our Response
- The bank where the victim was banking has a system of providing a forgotten password over the mobile as an SMS.
- The perpetrators knew this, either through a collusion of the bank employees or some other agency (like credit card collection agency) that the victim had a bank… account with a particular bank which followed this practice.
- With the personal information available with the perpetrators, they called and reported a lost sim card to the mobile company. And in the meanwhile forged a driving license with the victims details.
- Once the SIM card was blocked a new one was issued through a gallery of the mobile operator. It is possible that the gallery operator was hand in glove with them.
- Then with this mobile, the perpetrators logged onto the banks online site and sent a lost password request. They got an SMS of a new password on the stolen SIM card. Voila they had access to the bank account online.
The concerned bank should stop this practice immediately. This is not the first such case to be reported. Police should be sensitized to the issue.
The police should find the IMEI number of the phone from where the SMS was sent by the bank. From the IMEI number the police can trace the owner of the phone and reach the culprits.
Regards
Vinod Chand
General Secretary,
Credit Consumers Association of India
Bandra(East), Mumbai
U.S. Looks to Australia on Credit Card Fees November 27, 2009
Posted by vinodchand in Credit Card Issues, Credit Cards.add a comment
SYDNEY — When Steve Franklin bought four plane tickets on Qantas last June, he faced an unexpected expense: a surcharge of 7.70 Australian dollars on each of the 136.70 dollar ($126) tickets — just for using his Visa credit card.
Mr. Franklin, who planned to fly his parents and his 7-year-old twin daughters from Sydney to Adelaide, knew that changes to credit card rules had affected the cost of using plastic, but the extra 5.6 percent seemed excessive.
The charges were the consequence of changes in credit card rules in Australia that were aimed, in part, at reducing the cost of hidden fees for using plastic. But the law, passed six years ago, also allowed merchants to tack on new charges, and many have done just that, in some cases with fees that exceed the old ones.
Now, as Congress debates how to rein in credit and debit card companies in the United States, Australia’s experience is being pointed to as an example of just how tricky that can be: for one thing, if regulators limit one fee or rate, banks are likely to find another way to keep revenue flowing.
As in Australia, the stakes are high in the United States. American merchants, like their counterparts Down Under, complain that the high fees they must pay credit card companies and banks to accept their cards force them to increase prices on everything they sell — even for people who pay with cash — to make up the difference. In the United States, the Government Accountability Office last week issued a report showing that consumers who did not use credit cards “may be made worse off by paying higher prices for goods and services, as merchants pass on their increasing card acceptance costs to their customers.”
Read rest of the store here
A cry for help and our response November 24, 2009
Posted by vinodchand in Credit Card Issues.add a comment
Dear Mr. Kambli
I read about you in one of the news papers and was really happy to know that someone is voicing against these MNC banks who are charging exorbitant ROI and really sucking the blood of poor middle class who is un organised.
RBI has also added to woes of middle class by creating CIBIL which will again hamper the middle class only. One really wonders why these banks need any protection when they are charging such a high rate of intrest.
The govt of India is also hand in glove with these banks as nothing is done against the recovery agents of these banks.CIBIL must be banned as it will kill the middle class in long run.
I have lost my job due to recession and now finding it very difficult to pay back as the amount is huge and there is no regular income for me and a family to look after. These cards have really messed up my life and I am totally frustrated . I have already informed all the credit cards co about the settlement but HDFC and ICICI bank are trying muscle power.
what is way out of this if you could guide me on this that will be a great help and what is right amount one can pay towards full and final settlement I am pursuing them for 30% of the total outstanding towards the full and final settlement as that s all i can manage at this jucture.looking forward for your response.
Regards
Jai
Our Response
Dear Sir,
Many thanks for sharing our concern vis-a-vis foreign and indian private banks. These banks are the modern version of Shylock.
Banks get protection because they are cleverly using the SYSTEM from the inside. They have deep pockets which are being used to grease some palms at the right places, common man be dammed.
Someone aptly defined a banker as a person who will lend you his umbrella while the sun is shining and take it away the moment it begins to rain! Our bankers are no different, they are indeed fair weather friends unless the sum involved runs into thousands of crores in which case they will give you still more in the hope of protecting their earlier exposure.
We empathize with your loss of job and the fact that credit cards have made your life miserable. Using credit cards is one of the worst thing that one can do in a crunch situation, it is better to borrow from friends and relatives to help you tide over tough times. But then often our ego gets the better of us.
We agree that CIBIL will systematically destroy the middle class and the banks will then have no one to lend to. The banks will not lend to the poor because they do not have the repayment capacity, the rich will not borrow and the middle class would have been made in-eligible by CIBIL!
A settlement of 30 to 40% can be negotiated for stressed assets. In your case too, take time to find out your principal outstanding with the banks(the amount you have actually spent, minus the interest, late fees, penalties, etc.). Banks will normally agree to settle on this amount.
If harassed or threatened, please approach your nearest police station and file a criminal complaint of intimidation against the person/ persons/ organizations that are indulging in this.
Please do not hesitate to write to us or call us for further help.
Regards
Vinod Chand
General Secretary
Credit Consumers Association of India
Credit Cards or Misery Cards… October 24, 2009
Posted by vinodchand in Banking.add a comment
By SS Kumar (CMD Astral Systems India Pvt Ltd).
In keeping with the spread of sophisticated life styles in the west, the credit cards phenomenon has invaded India and most people have gotten so used to it that they can not live with out it. However, unlike in the west, the dice here in India is totally loaded against the user as the Reserve Bank of India is able to do very little in securing the user, says SS Kumar.
The following are the ways in which card issuing banks try to fleece the card holder:
Late fee
Disputed Claims
Biggest fraud through sale of policies on phone
Why do the banks charge exorbitant interest rates in India?
Life time membership fee fraud
GE Money continues using threats… August 23, 2009
Posted by vinodchand in Banking, Credit Card Issues, Credit Cards.add a comment
One of our members has lodged a specific complaint against GE Money.
It seems GE Money issued her a cash card some years back. She used the card and some time in 2006 fell in default due to non-payment of her dues.
She was offered a one-time settlement by an officer of GE Money at 18,000 rupees. The lady paid the amount to the officer in good faith but failed to take a settlement letter or receipt of the money she paid as the officer sitting in the Mahim office assured her that a letter takes time and it will be delivered to her home.
Then for two years she did not hear anything from GE Money. Suddenly in 2009, the company has started calling her again. The company now informs her that the gentleman she had paid the money to in no longer in the service of the company and there is no record of the money that she paid as one time settlement.
The caller who is harassing our member has threatened to have her arrested. He calls our member and places the call on conference with a police officer (identified as Patil) from the Mahim police station.
Questions that we raise are:
- Why did GE Money keep quite for 2 years after the member had already paid and entered into a one time settlement with the company?
- Why did she not receive any bills for this period and why is she suddenly getting a bill of 98000?
- The matter of money lending and borrowing is at best a civil offense, why is police getting involved in all this?
- We have reason to believe that the police personnel who is coming on the conference call is an employee of the company as he has failed to provide his designation and contact information including his police identification. In such case, why GE Money recovery officer should not be tried for impersonation of a police official?
Members are advised to be aware of this new tactics being adopted by credit card companies and private MNC involved in lending money.
While Credit Card companies get smashed in US, politicians in India Sleep August 23, 2009
Posted by vinodchand in Banking, Credit Card Issues, Credit Cards.add a comment
Credit card companies use a variety of unfair practices to trap consumers in a cycle of over-priced debt. The companies are allowed by law and by regulators to raise your rates for any reason, including no reason. They are allowed to operate nationally out of states, like Delaware and South Dakota, with weak consumer laws and no limits on interest rates or fees. No matter where you live, even in a state with strong laws, the weak pro-industry laws of those states govern your contract.
Consumers should either pay balances in full, or make the largest payments they can afford, and always pay early in the cycle to avoid late fees and, worse, having their rates jacked to penalty levels only a loan shark would love—36% APR or more.
For years, credit card companies were the most profitable form of banking, according to the Federal Reserve. But to ratchet up profits even more, they have recently numerous “trick, trap and gotcha” practices.
First, they started tricking consumers by advancing long-standing regular due dates all of a sudden by as much as 5 days or more to trick consumers into paying late. They put due dates on weekends and claimed that bills received after 12 noon or 1pm were late. They started imposing late fees not when bills were 30 days late, but as little as one minute or one day late. The regulators allowed this. Then, even after raising late fees to $39 or more, they claimed that being late also allowed them to jack interest rates by three times or more to 36% APR or even more.
Then, they started claiming that even if your payment history to them was perfect, they could jack your interest rate if your credit score declined (which could happen due to identity theft or numerous innocent reasons) or if you were late to some other creditor. They called this universal default.
Then, as the third strike against consumers, they invoked the extremely unfair “change the rules for any reason, including no reason” clause and started raising interest rates for no reason at all. This outraged Americans who started complaining to the Federal Reserve. Over 60,000 consumers complained. The normally somnolent agency woke up. It agreed with Maloney and Dodd that these and certain other practices were unfair. They proposed and on December 18, 2008 finalized, rules that make the practices illegal. In the past, the Fed had relied solely on disclosure to “protect” consumers. This was a major step.
But the Fed gave the banks until July 2010 to comply with the rules. So, it is important that Congress passes a law that takes effect more quickly. Further, a law will be more permanent than a rule from the regulators. And, the law will likely be stronger.
The credit card companies also spent millions on lobbying and campaign donations to get Congress to pass 2005 bankruptcy amendments that make it harder and more expensive to file for bankruptcy, so aggrieved consumers spend years paying over-priced credit card interest instead and never get a fresh start.
For years the firms also lowered minimum monthly payments and encouraged the use of cards for everyday expenses—through rewards programs—so that many consumers accumulated massive amounts of credit card debt. Until recently, a consumer who owed credit card debt of $5,000 at a common 16 percent APR, who only made the typical 2 percent minimum payment, would take 26 years to pay off the card, even if it was cut up and never used again.
Although the ability of states to regulate the fees and interest rates (APRs) of credit card companies has been severely restricted by federal preemption doctrine, which has allowed the weak laws of Delaware and South Dakota to override the state laws where credit card customers live, states are taking action in one area. In response to the growing problem of aggressive credit card marketing to young people on college campuses, some states, such as California, have restricted campus credit card marketing. Several colleges and universities have taken similar actions at the local level. See the U.S. PIRG reports, “Graduating Into Debt: Credit card marketing on college campuses,” and “The Campus Credit Credit trap” and “Characteristics of Fair Campus Credit Cards” at truthaboutcredit.org for more information.
Credit Card Companies start offering money to clear off dues! August 23, 2009
Posted by vinodchand in Credit Card Issues, Credit Cards.add a comment
In a recent report emanating from US, it seems that American Express has started offering its card holders up to 15000 Rupees (300 US Dollars) so that they can clear their outstanding dues on their existing credit cards and stop using them!
Such a disaster was imminent given the way banks have gone and distributed credit cards. In India too leading banks such as ICICI, HDFC, Citibank, Standard Chartered, etc have bent all rules and often given multiple credit cards to people who were not so deserving.
We at CCAI have been warning about the crisis but to no avail.
On top of this the exorbitant interest being charged by these banks along with job losses will lead to more defaults and may lead to the collapse of banks who have tread this path.
Banks’ credit card bluster rings hollow August 23, 2009
Posted by vinodchand in Banking, Credit Card Issues, Credit Cards.add a comment
Archive for Wednesday, May 07, 2008
By David Lazarus
May 07, 2008 in print edition C-1
I just love it when the credit card industry threatens to take its toys and go home.
That, in effect, was what card issuers said in response to the announcement by federal regulators last week that they planned to crack down on some of the industry’s more consumer-unfriendly practices.
To increase fairness, the Federal Reserve and two other agencies would, among other things, require card issuers to mail out statements at least 21 days before a payment’s due date and prohibit issuers from applying partial payments only to balances with the lowest interest rates – thus leaving costlier, higher-rate balances intact.
Edward Yingling, president of the American Bankers Assn., said in a statement that the Fed’s proposals represent “an unprecedented regulatory intrusion into marketplace pricing and product offerings.”
He said the measures would “result in less competition, higher consumer prices, fewer consumer choices and reduced consumer access to credit cards.”
In other words, if the industry had to play by the proposed rules, it wouldn’t be able to offer as much plastic to as many people.
Nonsense. No amount of regulation has ever resulted in card issuers scaling back their offerings. More than 5 billion solicitations were mailed to U.S. households last year alone.
Cibil will launch private score for personal loans August 23, 2009
Posted by vinodchand in Banking, Credit Cards.add a comment
Khyati Dharamsi and Joel Rebello.Friday, January 9, 2009 2:19 IST
After launching a credit score for individuals a bank has lent to, Credit Information Bureau of India (Cibil), the only credit bureau in India, is on its way to launching a credit score for personal loans and other products to help banks reduce their bad loans. Arun Thukral, managing director of Cibil, talks to DNA. Excerpts from an interview:
Cibil has been talking about making credit report available to individuals?
You know that in India, there is no unique identification number. We need a process in place to verify that the person asking for the report is indeed the person whose report it is. Due to the lack of a unique identification number, we use date of birth, mailing address, PAN number, passport number and voter’s ID for verification. We might also have to ask for documents initially and cross-check those. But that can’t be done in Cibil’s office. We need a different process centre and that should be ready in a year. By 2010, individuals will be able to access their own credit reports.
How has the situation changed given that banks are going slow on lending?Banks are still using our reports to acquire customers. These reports are also used to review the portfolios of customers they already have. That’s where the major shift is. Banks have become more selective about the customer profiles they loan money to. The account review or portfolio review tells you how your portfolio is doing. Everybody today is focussing on the regular review of the portfolio to know its health.
Read rest of the story here… http://www.dnaindia.com/report.asp?newsid=1220014
Credit Card Companies Willing to Deal Over Debt August 23, 2009
Posted by vinodchand in Banking.add a comment
By ERIC DASH
Published: January 2, 2009
Hard times are usually good times for debt collectors, who make their money morning and night with the incessant ring of a phone.
But in this recession, perhaps the deepest in decades, the unthinkable is happening: collectors, who usually do the squeezing, are getting squeezed a bit themselves.
After helping to foster the explosive growth of consumer debt in recent years, credit card companies are realizing that some hard-pressed Americans will not be able to pay their bills as the economy deteriorates.
So lenders and their collectors are rushing to round up what money they can before things get worse, even if that means forgiving part of some borrowers’ debts. Increasingly, they are stretching out payments and accepting dimes, if not pennies, on the dollar as payment in full.
“You can’t squeeze blood out of a turnip,” said Don Siler, the chief marketing officer at MRS Associates, a big collection company that works with seven of the 10 largest credit card companies. “The big settlements just aren’t there anymore.”
Lenders are not being charitable. They are simply trying to protect themselves.
Banks and card companies are bracing for a wave of defaults on credit card debt in early 2009, and they are vying with each other to get paid first. Besides, the sooner people get their financial houses in order, the sooner they can start borrowing again.
So even as many banks cut consumers’ credit lines, raise card fees and generally pull back on lending, some lenders are trying to give customers a little wiggle room. Bank of America, for instance, says it has waived late fees, lowered interest charges and, in some cases, reduced loan balances for more than 700,000 credit card holders in 2008.
Banks responsible for card, PIN delivery August 23, 2009
Posted by vinodchand in Credit Card Issues.add a comment
Mumbai: In case of misuse of debit cards, banks cannot escape responsibility by saying that they have delivered the card and the personal identification number (PIN) at the address mentioned in the application. A bank customer has approached the Ombudsman with a complaint about withdrawal of funds through unauthorised use of his card. The complainant said that he had asked for a debit card and the bank responded by issuing a card with zero liability. Though he did not receive the card, he found that Rs 25,000 was debited from his account. On enquiry from the bank, he gathered that the card was delivered to a security staffer in his office building, without checking identification particulars. The PIN was also delivered to another staffer in his office. This prompted the ‘card holder’ to seek a refund from the bank, a plea that was turned down.
Face music for unwanted calls, HC tells ICICI October 23, 2008
Posted by vinodchand in Banking.add a comment
Krishnadas Rajagopal
Posted: Oct 23, 2008 at 0042 hrs IST
New Delhi, October 22 Unsolicited telemarketing calls trouble everyone — even judges. During a hearing on Wednesday, a senior judge of Delhi High Court gave vent to his ire on ICICI Bank for making “unsolicited marketing calls” to him.
“I receive calls at all time of the day from ICICI Bank,” Justice Vikramjit Sen said. “I do not know what business you get out of such calls…. You are a nuisance and have to face the music for making these unsolicited calls.”
The division bench was hearing an application moved by ICICI Bank for a stay on revival of contempt of court proceedings before the Delhi State Consumer Commission on the basis of a petition by advocate Nivedita Sharma. Sharma had filed her appeal in response to the “menace of unsolicited commercial telemarketing calls” and divulging “private and confidential information”.
On December 26, 2006 the consumer commission had levied a Rs 12.5-lakh penalty on the bank for making nuisance calls. Though the High Court subsequently stayed the Commission’s decision on September 11, 2007, the court had warned the bank against making “unsolicited marketing calls”.
The court had also warned the bank that the stay order should not be misinterpreted as “a licence to continue making unsolicited calls to customers”. The High Court had also given customers liberty to move the consumer commission if they continued to receive unwanted marketing calls from ICICI Bank.
“I moved the Commission because I still got calls from the bank despite registering with the ‘Do Not Call’ registry,” Sharma told Newsline. “The calls were in clear violation of the consumer commission’s order.”
The bank contended before the High Court bench today that Sharma was merely misusing the “liberty granted to her by the court” to seek relief with the consumer commission if still pestered by unsolicited calls. Terming her current litigation before the Commission as “misconceived”, the bank argued that it was impossible for Sharma to receive any unsolicited call as her name had been “updated” on the ‘Do Not Call’ registry.
At this point Justice Sen sought to prove the bank wrong by citing his personal example. “Do you think you are above the law?” the judge asked. “Who is your highest ranking officer in northern India… bring him here; let him explain these calls.”
The bench then kept aside the case for a while to give the counsel time to summon the concerned bank official. Later, the court gave some reprieve to the bank to file a suitable response by the next date of hearing.
SC refuses to allow high interest on credit cards September 9, 2008
Posted by vinodchand in Banking, Credit Card Issues, Credit Cards.add a comment
Dhananjay Mahapatra | TNN
NEW DELHI: Credit card users can breathe easy for the moment, with the Supreme Court refusing to stay a national consumer forum directive that banks cannot charge more than 30% interest per annum on defaults on card payments. This will protect consumers from exorbitant charges, which are as high as 49% in some cases.
Banks had appealed against the consumer court order and asked for a stay on it. Admitting appeals filed by MNC banks — HSBC, American Express, Citibank and Standard Chartered Bank — challenging the consumer forum order, a Bench comprising Justices B N Agrawal and G S Singhvi issued notice to Reserve Bank of India and the NGO ‘Awaz’, on whose petition the limit on interest rate was imposed.
What is revealing is the banks listing as many as 27 factors why they needed to charge higher interest rates and these included calls made from service centre to seek new customers. It would appear that almost all costs involved in banking activities over telephone and internet were to be charged to the hapless credit card holder, going by the banks’ submissions to the SC.
When banks pressed for a stay on the ground that they are regulated by the RBI regulation guiding interest rates, the Bench merely issued notice on their applications and sought responses within three weeks.
But the threat of a higher interest has not gone away as the banks — HSBC, American Express, Citibank and Standard Chartered Bank — have teamed up to persuade the SC of what they said were their compulsions in charging between 36% and 49% interest.
The July 7, 2007 order of the National Consumer Disputes Redressal Commission (NCDRC) had ruled that “charging of interest rates in excess of 30% per annum from credit card holders by banks for the former’s failure to make full payment on the due date or paying the minimum amount due, is unfair trade practice”.
It had also said that penal interest could be levied only once for the period of default and should not be capitalised, while also terming the practice of computing interest on monthly basis as “unfair trade practice”. Among the factors listed by the banks justifying the exorbitant rates was the cost of calls. In other words, calls made randomly by the bank’s authorised call centres incessantly to persuade people to take a credit card, is also taken into account for realisation through charging of penal interest from a defaulting card holder.
The other notable factors listed are:
Processing cost for setting up a new card in operating system
Cost of courier and cost of embossing the card
Cost of providing phone banking service
Cost of sending monthly statements
Cost of providing internet banking facility
Cost of waiving charges for service reasons
Cost of marketing and promotional offers
Cost of rewards and loyalty programme
“The National Commission has failed to appreciate that the rate of interest on defaulted or partial payments of dues is determined by taking into consideration various factors, including the risks of default, and therefore, this commission may not determine the issue as to whether the interest at the rates of 36% to 49% per annum is excessive,” the banks said.
Credit Card Debt may lead to Plastic Meltdown in USA July 14, 2008
Posted by vinodchand in Banking.Tags: Banking
1 comment so far
Credit counsellors and financial analysts in the US and the UK are seeing evidence every day that credit card debts are increasing. Soaring fuel costs, rising food prices and climbing energy bills are all being kept at bay with credit cards. Shortfalls on mortgage repayments are also being made up with cash from credit cards. Many of these debt soaked consumers were already struggling to make their minimum monthly repayments.
More than $1 trillion is held on credit cards in America. In the UK, debts of more than pounds 50 billion have been run up on the plastic. Across the world, somewhere between $2-3 trillion is owed on credit cards.
Up to now, the credit crisis has passed by without plastic going into meltdown. Statistics have shown steady levels of arrears and suggested that many consumers have been successfully paying off part of their balances. Now there are increasing signs that this last breakwater, shoring up the economies of the western world, is about to crack under ever-increasing strains.
“Credit cards are definitely going to be one of the next big problems,’’ said Steve Nuttall, head of the financial-services research group at polling company YouGov. “Our research shows that everything started to fall off a cliff in about March or April and that should begin to show up in bad-debt charges by the end of the year.’’
The US Federal Reserve has also been warning credit-card lenders not to push their luck. The regulators are fearful that the economy could crack if consumers start being hit with higher fees and steep interest rate rises. The problem may be even sharper in Britain.
Analysts always say that “the markets get it right’’. Current market prices suggest that over 20% of the money owed on British credit cards is unlikely to be paid back. That would be almost three times higher than the previous record for bad credit-card debts, eclipsing the problems witnessed in the last housing crisis of the early 1990s.
“We are already hearing stories about people using their credit cards to keep up with their mortgage payments,’’ said Peter Crook, chief executive of Provident Financial, the doorto-door moneylender. “If that’s what’s happening, it’s a big red warning sign.’’ The recent Bank of England credit-conditions survey revealed that banks were surprised by the level of bad debts run up on their credit cards in the second quarter of the year. Demand for credit cards also increased as banks tightened their lending criteria across the board.
The UK’s debt-strapped consumers currently owe a staggering pounds 56 billion on credit cards. According to figures from Apacs, the payments network that supports the British banking system, this could climb to pounds 160 billion if those 31m cards are used to the max. The figure takes account of all the measures already taken by credit-card issuers to clamp down on borrowers by rejecting card applications and cutting credit limits.
YouGov’s research suggests that 15% of the British public is now behind on at least one bill of some kind or another. Of those in trouble, 38% say they are behind with utility bills or council tax, while 31% cite credit cards as their big problem.
Problems in credit-card debts have the potential to send a new wave of panic through global financial markets. Roughly $600 billion of debts run up on credit cards world over swill through the global financial system. Credit-card debts were packaged up and sold on by banks during the boom years, just like mortgages and car loans. THE SUNDAY TIMES
Bad Karma catching up with MNC and Private Banks July 11, 2008
Posted by vinodchand in Banking.Tags: Banking
add a comment
A news report today in leading newspapers in Mumbai talks about CitiBank planning to sell its swank headquarters in BKC.
It is a typical case of bad karma catching up with the bank.
For years, Citibank and similar foreign and private banks lobbied with the mandarins in the law making institutions to offer products and services whose cost was way prohibitive for the common man.
They set up honey traps by offering easy credit through credit cards, personal unsecured loans and other such instruments where the interest rates were portrayed to be unregulated by the central bank. They charged interest in the region of 35 to 85% all in the name of unsecured credit.
These bank employed bright kids fresh off the MBA mill to sell these products and services. These kids were offered heavy salaries and pushed into achieving sales targets for the bank’s dubious products. To recover the small loans issued to masses, these banks hired dubious agencies purely on commission basis thus transferring the cost of their entire operation on the poor borrower.
Stories of mental, physical and financial harassment abound. Bank managers and officials ruthlessly went around first distributing money and then recovering these small loans.
Small borrowers, people who borrow 40,000 to 50,000 rupees (1000 to 1250 US Dollar) could be easily browbeaten into submission. Armed with a central bank looking the other way and legislators not bothered about the rape of the common man, these banks systematically looted the common man. Many were driven to commit suicide, many marriages went bad and many people’s families were destroyed.
All this has created a lot of ill will amongst the people and it is now translating to these very same banks facing collapse for deeds done by the managers who were supposed to make the bank grow. The sub-prime crisis in United States and its fall out on the world financial system is having its echo here in India too. These banks are now left holding the baby.
Soon these bank managers who were getting fancy salaries and perks will be also laid off. Banks like CitiBank will have no option but to cut all the flab. With share prices of the bank falling to 16$ from a high of 65$, it has already seen an erosion of 75% of its value. There is more to come from where all this came from and boy am I happy!
It is the bank’s bad karma that is catching up with them.
The case of Andre Stevan Butelho June 30, 2008
Posted by vinodchand in Banking.add a comment
Mr. Butelho holds an ICICI credit card number 4477-XXXX-XX59-2000. As Mr. Butelho was unable to make payments on this card ICICI bank offered him a settlement through one of its DSA, Synergy Consultants. Synergy Consultants is owned by Mr. Prakash Kokare from B 10/5 Ground Floor, Mathuradas Colony, Vidynanagri, Mumbai 400098 and has telephone numbers 66753437 / 26654177.
An agent of Synergy Consultants by the name of Gyaneshwar went to the office of Mr. Andre on 7/8th May 2008 (date is not confirmed) and handed over a settlement letter. On receipt of this letter, Mr. Butelho made a payment of Rs. 10,000 to this agent. As this transaction took place during working hours and due to other pressures, Mr. Butelho forgot to take cash receipt from the agent.
For all practical purposes Mr. Butelho assumed that his account had been closed.
Then one fine day he got a call from ICICI Bank asking him for payment. Mr. Butelho narrated the entire case to Mr. Shrikant at ICICI JB Nagar Office (Tel 66493667) on his visit to the branch and also showed the settlement letter to him.
He was shocked when the bank told him that the letter he was presenting was forged.
When Mr. Butelho tried to contact Mr. Gyaneshwar, he would not pick up his phone (9967098934). Mr. Butelho then approached the association for help.
When we called up Mr. Gyaneshwar’s number it was answered by his friend, Mr. Prakash Kadam. He gave us another number (9920204045). When we called this number a person by the name of Mr. Santosh Gunty responded and told us that Mr. Gyaneshwar has been sacked from service. He later back tracked from this version and told us that he was the team leader and that Mr. Gyaneshwar was on leave. When we asked for his address and contact information, Mr. Gunty refused to divulge any information. He gave us the mobile number of Mr. Prakash Kokare (9820101202).
When we called Mr. Prakash Kokare, he requested for the settlement letter to be faxed to him, which we did. On receipt of the fax Mr. Prakash told us that he will investigate the matter and come back to us.
When he reverted he told us that he has spoken to Mr. Gyaneshwar and according to his agent no money was received from Mr. Butelho and no letter issued. He gave us a contact number of a person by the name of Manish Acharya (Tel 66493435) who is tasked within ICICI bank to handle all such issues.
When we call this number there is no response.
Bottomline: ICICI is a cheat and its agents and associates are no better. We are now filing a criminal complaint of cheating with the Bhandup Police Station where the incident of payment took place.
Harassment from HSBC Bank June 30, 2008
Posted by vinodchand in Banking.add a comment
Mr Hariram is a member of our association.
He hold the following HSBC Credit Cards
card no 4476-XXXX-XXXX-1048 and 5548-XXXX-XXXX-8852
This is his story
To give you a jist of the case, i had offered them a settlement proposition almost one and a half year s back , but they refused to come forward . subsequently they went on harrasing my parents at hyderabad , inspite of the fact that the bank has my official address and my residence addressin mumbai.
One of the calls was made by a guy called Nilesh (may not be his real name as these people never reveal their full names) to my parents in Hydreabad, he introduces himself as a lawyer and that he has lent me 3lacs and he needs it back. They refused to give their contact address in mumbai.
Subsequently when my wife spoke to him, she informed him to come to the association office . On hearing this he started abusing my wife , and he refused to take the address. he had threatened with dire consequences . [ calls received from 67115654 , 67115689 ] when we called these numbers it rings no one attends. i understand that these numbers have only outgoing facility , no incoming as confirmed by tata indicom.
On saturday 28th June 2008 my wife got a call from this number 32937841 , a girl named medha who was calling from dtdc courier and there was a packet for me from delhi . when my wife asked for the name of the sender from delhi she refused to give as also their office address. this is also from hsbc.
I am very clear in the sense my settlement amount is not going to be more than 10k both cards, whether hsbc takes it or not . becasue they have harrassed my family, moreso my old parents.
Hariram.
—————————-
Abuses continue, RBI continues to sleep
The case of Parvez Billimoria June 23, 2008
Posted by vinodchand in Banking.add a comment
Mr. Parvez Billimoria is in a serious debt trap.
Since 1976, Mr. Billimoria, a Manager with National Garage, Mumbai, has been using credit cards. He has been issued Credit Cards by companies like Citibank, ICICI, ABN Amro, etc left right and center. He has more than 30 credit cards. And now he has no money to pay any one of them.
To compound his problems, these banks have been sending him unsolicited loans. ICICI sent him two cheques of 4 Lacs each.
Mr. Billimoria is 58 years old. When ICICI sent him the loan cheques he had just 1 more year of service left. Mr Billimoria does not own any property. He is actually staying with his wife in a property provided to him by Parsi Trust.
With no income to service these credit cards, Mr. Billimoria has no option other than to take cover under Bankruptcy Laws and seek protection from the courts.
Mr. Billimoria is receiving more than 20 calls every day from recovery agencies. ABN Amro wants him to commit suicide such that they can claim his insurance. Mr. Rahul Verma is calling him from ABN Amro Gurgaon Office (Phone Number 0124-4181344) and asking Mr. Billimoria to sell his wife so that ABN Amro’s money can be recovered.
The reason we write about him is to point an accusing finger to the MNC and Private Banks which have thrown all caution to wind and not exercised proper due-diligence in giving loans to Mr. Billimoria. And now when they are not getting their dues, they are using the choicest of foul language in harassing an already stressed customer to the point of suicide.
Mr. Billimoria may commit suicide, if he does so, CCAI will file a case of abetment of suicide against all the banks and credit card companies that are driving him to a point of no return.
This is a warning to all banks and credit card companies to back off and also to RBI to wake up to the continued abuse of its guidelines on recovery of loans.
Mr. Reddy Sir, Governor RBI, all these banks are cooking a snook to you, what are you going to do?
How ABN Amro and Other Foreign Banks including Indian Private Banks cheat customers June 13, 2008
Posted by Credit Consumers Association of India in Banking, Personal Loans.1 comment so far
When you take a personal loan from any Foreign or Indian Private Bank including ICICI, HDFC, Kotak Mahindra, please be sure of the fact that they have decided to cheat you right at the very outset itself.
When you take a loan, you are given a cheque which is normally dated for the second or the third week of the month. By the time the money is in your account, it is the end of the month.
And as per agreement executed by you, the bank is now ready to take back the first installment. This is where the cheating happens.
First, the bank does not give you the full amount of the loan, deducting the processing charges at source along with the service tax and all other levies.
Secondly, the bank takes back the first installment in the first week of the month that follows the disbursal date. Therefore in effect you are paying back the bank interest on the entire amount within 7 to 10 days of getting the loan.
This is a standard sharp practice deployed by all the banks other than nationalized banks.
With nationalized banks you may face a delay but they will never cheat you. Do you know why? Because promotions in Nationalized banks are not linked to returns generated by an individual. Whereas in MNC and Private Indian Banks, fresh MBA’s are hell bent on increasing the profit of the bank in the hope that they will be able to climb the ladder of success faster, and they do!
KV Kamath takes home 10,00,00,000 per month as salary, how is that for success! He also holds stock options in the bank that he is heading. Do you think the owners of these banks pay these salaries?
If you said yes, you are completely wrong. It is the customers of the bank that make it possible for the company to pay Mr. Kamath the salary quoted above. And what does Mr. Kamath and his team do? Find new ways of cheating the customers that are paying for his salary!
ICICI Bank is above Supreme Court of India June 13, 2008
Posted by Credit Consumers Association of India in Banking, Vehicle Loans.1 comment so far
ICICI Bank continues to employ the same procedure even after the Supreme Court of India has passed severe strictures against it.
In a recent case, Mr. Sandip Narayan Pagde approached us with a complaint against ICICI Bank. He had taken a Maruti Omni on a 5 year loan from ICICI. His installment was 4800/- which he has been paying till February 2008. With just 11 installments remaining balance, Mr. Pagde’s vehicle was re-possessed by ICICI Bank because he had fallen behind in making 4 payments. He offered to make those payments but in his absence, ICICI recovery agents took away the vehicle by misleading his wife. They told her that Mr Pagde had just to pay 4 installments and then the vehicle could be his without making any further payment.
This is a very standard technique used by these recovery agents, they lure you with a false promise and a lucrative deal. In fact all they promise is false to start with.
In this case, when Mr Sandip approached the bank for taking back his vehicle, he was informed that the vehicle has already been sold for 70,000/-. This sale had taken place without the consent of the owner and in clear violation of Supreme Court guidelines in all such cases.
We are sure people in the recovery department, including one Mr. Dinesh Singh, who sits at the infamous RPG Tower, JB Nagar Branch of ICICI bank made a pot of money at the expense of the poor vehicle owner.
Their modus-operandi is simple. They will pick up a vehicle where there is even a small default. Then they will sell the vehicle to an agent of their choice by taking some money officially and a lot of money un-officially. All the people in the recovery departments of these banks including ICICI, HDFC, HSBC, CitiBank, etc are following the same practice.
Read Supreme Court Judgment below
“Banks cannot employ goondas to recover loans”
J. Venkatesan
Feb 27, 2007
NEW DELHI: The Supreme Court on Monday deprecated the procedure adopted by commercial banks of employing musclemen as agents to recover the outstanding loan amount from defaulters.
A Bench of Justices A.R. Lakshmanan and Altamas Kabir, in separate but concurring judgments, said: “We are governed by a rule of law in the country. The recovery of loans or seizures of vehicles could be done only through legal means. The banks cannot employ goondas to take possession by force.”
The Bench was disposing of an appeal filed by the ICICI Bank against an order passed by the Allahabad High Court rejecting its plea to quash the criminal cases registered by the U.P. Government against the Managing Director and top officials for using criminal force against a loan defaulter.
The case was registered at the instance of the High Court on a complaint from Prakash Kaur, a 75-year-old widow, that the bank had sent musclemen to seize the vehicle for non-payment of one instalment of loan.
Mr. Justice Lakshmanan said: “Once the credit card or loan is taken and there appears a default, then the witch-hunt begins. Now the bank is the aggressor and the public is the victim. The first step to recover the money due is through the so-called recovery/collection agents. A very dignified term used for paid recovery agents who are individual and independent contractors hired by the banks to trace the defaulters and to both physically, mentally and emotionally torture and force them into submitting their dues.”
He said: “A man’s self-respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernised version of Shylock’s pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner.”
The Judge said: “It is mandatory that the banks be held vicariously liable for such acts of agents…”
Another murder from ICICI with admission of guilt June 12, 2008
Posted by Credit Consumers Association of India in Uncategorized.add a comment
Argument by ICICI “Killers on contact – Not the bank employee”
When the supari become legal in this country??? Take care of your life if you deal with the ICICI bank.
For more, read the following news item
“Ten days after being blamed for the suicide of 38-year old Prakash Sarvankar, ICICI Bank has given his family an ex-gratia payment of more than Rs 15 lakhs, reports CNBC-TV18.
Six-year old Prajakta was witness to her father being harassed by recovery agents of ICICI Bank, when he defaulted on a loan of Rs 50,000, which the bank describes as “small ticket”. Fed up of the insults, on September 17, Prakash Sarvankar hanged himself and blamed recovery agents of the ICICI Bank in his suicide note.
The incident evoked strong reactions from activists, who blamed the bank for using strong arm tactics. Now the bank has announced an ex-gratia payment to Sarvankar’s family, which includes a fixed deposit, which will give them about Rs 9,500 a month and insurance of Rs 25 lakh over 20 years.
But Sarvankar’s widow is still inconsolable.
“ He is not going to come back,” said Priyanka Sarvankar, Prakash Sarvankar’s widow.
Consumer organisations welcome the move, but demand stricter checks and balances on banks.
“Even the senior most official, in this case the CEO of the bank, is responsible for this,” said Vinod Chand, General Secretary, Credit Consumers Association of India.
For now four men are under arrest for abetting Sarvankar’s suicide. One of them is the owner of the recovery agency, and another, Kailash Choudhary, is an employee of I-Process. The police are investigating whether senior officials of the bank are responsible as well.
An inquiry has been launched into that alleged incident of harassment. The RBI backed Banking Codes and Standards Board of India has stepped in. According to sources, BCSBI has shot off a letter to ICICI Bank asking if it had done adequate due diligence before appointing the collection agency.
BCSBI also asked ICICI Bank to spell out the action taken against the agency and produce details of tangible evidence, which show that such incidents do not recur.”
