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What is the remedy to a person if the Bank hand over the case of a person regarding balance payment of credit cards to the Collection agents ?
A) Collection agency's goons use abusive language to the Customer & give life threatening calls ?
B) Is there any guidelines of RBI or Supreme Court with respect of recovery of Credit Card payment ?
I have asked these questions beacuse one of my known to is in trouble ?
Vikram Singh

From India, Delhi

first of all, does your friend owe money to the credit card company, if so, then he should pay immediately.
but inspite of having made he payment, such calls keep coming, then he should write immediately to the credit card company enclosing payment details. Even if theres a discrepancy in the amounts , hen also follow the same procedure.
Also, alongwith file a private complaint with the police as an NC at the nearest police station.
mostly the police are hand in glove with such goons and they dont support you.. in which case file a case in the court u/s 156.
i hope this info will help ur friend..
s v deshmukh

From India, Mumbai

Dear Vikramlamhe,
Give complete details of the case for suitable advice, which can change with change in any minute details of the matter.
There are a few High Court Delhi cases, where the Banks have been barred to use goons for recovery.
Sunil Chandra

From India, Gurgaon

Hi Vikram, If payments have been made and in spite of it, the agents are threatening, there is no need to panic. I too am in such a situation. I am being bothered and I have categorically told them that i will not make the payment for things I have not purchased. In my case there was some fraud with my card. I suggest u can go to the Consumer Court for redressal. Moreover, I understand that there is a Supreme Court ruling in which the agents are strictly prohibited from calling/disturbing the customers for collection of outstanding money. Dont fear....but act fast and lodge a complaint....regards. Srini
From United Kingdom, London

Hope the following information would be of help to the members, who face such situations presently or in future:


The growth in the economy, higher salaries, rise in ambition levels, desire to climb the economic success ladder coupled with massive advertising have all led to the massive increase in credit card usage in India. But all is not well with the credit card sector, everyday the increasing number of consumer complaints about wrong billing, higher rate of interest, extra or hidden charges by way of late fee, cash advance fee, billed finance fee, over-limit fee, cash withdrawal fee, cheque pick up fee and service taxes on all these fees, insufficient time to pay back dues, inadequate services etc have added to the long list of consumer grievances against the credit card issuing banks.

Further, adding a new dimension to the issue, the banks have frequently resorted to illegal methods in recovering dues from the credit cardholders. "These include making threatening calls to cardholders and their family members, engaging the services of anti-social elements such as goons for recovery, and even wrongfully confining the cardholders for several hours” confirmed Mr. C.V. Giddappa, General Secretary of Credit Card Holders Association of India, an association fighting for the rights of Credit card Holders in India.

In its efforts to redress the grievances of the credit card holders in the country, the Reserve Bank Of India has brought out a revised Master Circular, No-DBOD.FSD.BC-17/24.01.011/2007-2008, dated –July 2,2007, with a view to encourage growth of credit cards in a safe, secure and efficient manner as well as to ensure that the rules, regulations, standards and practices of the card issuing banks are in alignment with the best customer practices. All the credit card issuing banks / NBFCs have been directed to implement these guidelines immediately.

Following are few important points under the Master Circular that will help the consumer to demand a fair treatment from the credit card issuing bank:

Issuance of cards

While terms and conditions are required to be conveyed in a way comprehensible to the user in English, Hindi and the local language, the guidelines also require that the most important terms and conditions (MITCs)be conveyed to the customer at multiple stages such as marketing stage, application stage, acceptance stage, etc. Thus the consumer has every right to demand being informed about fees and charges, withdrawal limits, billing procedure, default charges etc until totally clear to help him make an informed choice.

The Banks / NBFCs should on their part independently assess the credit risk while issuing cards to persons, specially to students and others with no independent financial means. Add-on cards i.e. those that are subsidiary to the principal card, may be issued with the clear understanding that the liability will be that of the principal cardholder. As holding several credit cards enhances the total credit available to any consumer, banks / NBFCs should assess the credit limit for a credit card customer having regard to the limits enjoyed by the cardholder from other banks on the basis of self declaration/ credit information.The card issuing banks / NBFCs is solely responsible for fulfillment of all statutory requirements, even where DSAs / DMAs or other agents solicit business on their behalf.

Interest rates and other charges

Guidelines require that the customers be given at least 15 days for making payment before the interest starts getting charged, card issuers are required to quote annualized percentage rates (APR) on card products (separately for retail purchase and for cash advance, if different), give method of calculation of APR with a couple of examples for better comprehension. Even where the minimum amount indicated to keep the card valid has been paid, it should be indicated in bold letters that the interest will be charged on the amount due after the due date of payment. These aspects may be shown in the Welcome Kit in addition to being shown in the monthly statement.

The bank / NBFC should not levy any charge that was not explicitly indicated to the credit card holder at the time of issue of the card and getting his / her consent. However, this would not be applicable to charges like service taxes, etc. which may subsequently be levied by the Government or any other statutory authority.

The terms and conditions for payment of credit card dues, including the minimum payment due, should be stipulated so as to ensure that there is no negative amortization.

Changes in charges (other than interest) may be made only with prospective effect giving notice of at least one month. If a credit card holder desires to surrender his credit card on account of any change in credit card charges to his disadvantage, he may be permitted to do so without the bank levying any extra charge for such closure.

Wrongful billing

The card issuing bank / NBFC should ensure that wrong bills are not raised and issued to customers. In case, a customer protests any bill, the bank / NBFC should provide explanation and, if necessary, documentary evidence to the customer within a maximum period of sixty days with a spirit to amicably redress the grievances. To obviate frequent complaints of delayed billing, the credit card issuing bank / NBFC may consider providing bills and statements of accounts online, with suitable security built thereof.

Use of DSAs / DMAs and other agents

Banks normally use direct selling agents who collect confidential personal and financial information from current and prospective credit card customers. Banks are required to ensure that DSAs engaged by them scrupulously adhere to the bank’s code of conduct.

Protection of Customer Rights

This section has been categorized into three parts-Customer Privacy, Customer Confidentiality and Fair Practices in Debt Collection.

Right to privacy

In the event of a customer being billed for an unsolicited card, the bank will not only have to reverse the charges but also pay a penalty amounting to twice the value of the charge reversed. Similarly in case, an unsolicited loan facility is extended without the consent of the recipient and the latter objects to the same, the credit sanctioning bank / NBFC shall not only withdraw the credit limit, but also be liable to pay such penalty as may be considered appropriate.

The card issuing bank / NBFC should not unilaterally upgrade credit cards and enhance credit limits. Prior consent of the borrower should invariably be taken whenever there are any change/s in terms and conditions.

The card issuing bank / NBFC should maintain a Do Not Call Registry (DNCR) containing the phone numbers (both cell phones and land phones) of customers as well as non-customers (non-constituents) who donot wish to receive any communication about credit card products. The intimation for including an individual’s telephone number in the Do Not Call Registry (DNCR) should be facilitated through a website maintained by the bank / NBFC or on the basis of a letter received from such a person addressed to the bank / NBFC.

Further the Do Not Call Registry (DNCR) numbers should not be passed on to any unauthorised person/s or misused in any manner. Banks / NBFCs/ their agents should not resort to invasion of privacy viz., persistently bothering the card holders at odd hours, violation of 'do not call' code etc.

Customer confidentiality

The card issuing bank / NBFC should not reveal any information relating to customers obtained at the time of opening the account or issuing the credit card to any other person or organization without obtaining their specific consent, as regards the purpose/s for which the information will be used and the organizations with whom the information will be shared.

In case of providing information relating to credit history / repayment record of the card holder to a credit information company (specifically authorized by RBI), the bank / NBFC may explicitly bring to the notice of the customer that such information is being provided in terms of the Credit Information Companies (Regulation) Act, 2005.

Before reporting default status of a credit card holder to the Credit Information Bureau of India Ltd. (CIBIL) or any other credit information Company authorized by RBI, banks / NBFCs may ensure that they adhere to a procedure, duly approved by their Board, including issuing of sufficient notice to such card holder about the intention to report him/ her as defaulter to the Credit Information Company.

The disclosure to the DSAs / recovery agents should also be limited to the extent that will enable them to discharge their duties. Personal information provided by the card holder but not required for recovery purposes should not be released by the card issuing bank / NBFC. The card issuing bank / NBFC should ensure that the DSAs / DMAs do not transfer or misuse any customer information during marketing of credit card products.

Fair Practices in debt collection

In the matter of recovery of dues, banks / NBFCs may ensure that they, as also their agents, adhere to the extant instructions on Fair Practice Code for lenders as also IBA’s Code for Collection of dues and repossession of security. In case banks / NBFCs have their own code for collection of dues it should, at the minimum, incorporate all the terms of IBA's Code.

Banks / NBFCs / their agents should not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude the privacy of the credit card holders’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations.

Redressal of Grievances

Generally, a time limit of sixty (60) days may be given to the customers for preferring their complaints / grievances. The card issuing bank / NBFC should constitute Grievance Redressal machinery within the bank / NBFC and give wide publicity about it through electronic and print media. The grievance redressal procedure of the bank / NBFC and the time frame fixed for responding to the complaints should be placed on the bank / NBFC's website. The name, designation, address and contact number of important executives as well as the Grievance Redressal Officer of the bank / NBFC may be displayed on the website. There should be a system of acknowledging customers' complaints for follow up, such as complaint number / docket number, even if the complaints are received on phone.

If a complainant does not get satisfactory response from the bank / NBFC within a maximum period of thirty (30) days from the date of his lodging the complaint, he will have the option to approach the Office of the concerned Banking Ombudsman for redressal of his grievance/s. The bank / NBFC shall be liable to compensate the complainant for the loss of his time, expenses, financial loss as well as for the harassment and mental anguish suffered by him for the fault of the bank and where the grievance has not been redressed in time.

Internal control and monitoring systems

With a view to ensuring that the quality of customer service is ensured on an on-going basis in banks / NBFCs, the Standing Committee on Customer Service in each bank / NBFC may review on a monthly basis the credit card operations including reports of defaulters to the CIBIL, credit card related complaints and take measures to improve the services and ensure the orderly growth in the credit card operations. Banks / NBFCs should put up detailed quarterly analysis of credit card related complaints to their Top Management. Card issuing banks should have in place a suitable monitoring mechanism to randomly check the genuineness of merchant transactions.

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.

From India, Mumbai

Well Banks have to not only adhere to RBI guidelines regarding collection of dues by the lenders but also have to follow the code of conduct published by the Banking Codes and Standards Board of India. The Collection agents or the banks staff cannot use abusive and life threatening calls Please go through BCSBI code regarding collection of dues which stated in para 8.The code is available on BCSBI website. Please write to the bank on whose behalf the collection agent is threatening bringing out the violations of the code .Endorse a copy there of RBI Customer service Dept central office.If threats do not stop you may file a FIR with police station giving details of the caller contact number and or his ID number if he is calling on you personally
From India, Mumbai
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