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.
