The credit card collection agent comes knocking at your door and you are not home. Ever faced such a situation?
Well, a friend of mine -- let's call him Amit -- did. Actually, he was in his office when the credit card collection 'agent' called. "You have a credit card outstanding of Rs 19,000 and you need to pay it soon," he threatened.
"No way," Amit replied firmly. "Not till you guys show or courier me the documents I signed while getting this card." This was not the first time he was being threatened by this particular bank's collection agents.
Seeing that he was not relenting, the agent used another trick -- he passed some obnoxious comments about Amit's wife. Amit, who is a tough nut, returned in kind.
Amit did not know the agent was standing outside his building and making that phone call. The agent went upstairs and threatened Amit's old parents (both heart patients) with dire consequences if their son didn't cough up the dues outstanding on his card. He was so audacious that he called Amit again and made him listen to this entire conversation. He also threatened Amit again.
This scared Amit. He called his mother and told her to call the police.
Before the police could arrive (surprisingly, they did arrive within 10 minutes of the call), the agent had vamoosed. In order to scare the agent, Amit's mother had told him she had made a complaint and the police were on their way.
In the evening, while on his way home, Amit lodged a non-cognisable offence complaint against the agent and the bank. Ironically, the inspector in charge dissuaded Amit from taking his grievance further.
"The next logical step," he told Amit, "would be to go that agent's office and arrest him. This would then lead to you filing a court case against the agent, his superiors and the bank. Don't you know how the courts function in India?"
The inspector knew perfectly well that this particular comment would dissuade Amit from taking further action. The inspector did not have a vested interest in not taking the case further; he just wanted to save himself some trouble.
Amit now decided to settle the matter once and for all. He went to the bank's collection office and met with the person in charge of his credit card account. He, too, was as rude as the collection agent and refused to hand over a copy of documents Amit had signed while filling his account opening form.
Now, here's a flashback. The bank in question had approached Amit to open a credit card account when he was working with a reputed company in Mumbai. Though he was a bit reluctant initially, he gave in after the agent told him it was a lifetime free credit card.
He would not be charged the annual maintenance charges that other credit card companies levy to keep a card active. The lure of saving some Rs 750 finally made Amit put pen to paper and sign on the dotted lines without reading the fine print and the clauses just above his signatures.
Remember that Amit was in his office and had no time to read the papers or ask the agent any questions. It was this error that resulted in the trouble he was facing now. Little did he know he was signing under a clause that allowed the bank to auto-debit his account in case if he failed to pay the minimum amount due on his credit card.
Auto-debit is a facility whereby the customer's bank account is linked his credit card account; if the customer fails to pay the amount by the due date, then the credit card company automatically debits the customer's account for that amount.
Oblivious to this fact, Amit was shocked one day to see his credit card bill showing an auto-debit of Rs 800. He would still not have noticed it had it not been for the auto-debit return charge, late payment fee charge billed on his account.
He was penalised since his bank did not have the requisite amount to pay the minimum amount due on his account; the credit card company had made an effort to collect the amount and failed to do so. This is the auto-debit return charge.
Since he had missed paying the minimum amount due on his card before the due date, he was charged with yet another penalty: the late payment fee.
When he called on the customer service executive, the female voice (they are just that; sometimes you are connected to an executive in Hyderabad and sometimes in Mumbai. There is no systematic way of making notes on an account like they do in America) told him that, since he'd failed to make payments for the minimum amount due on his account, the credit card company made use of the auto-debit facility.
As per the practice followed by collection companies in the US, each collection agent calling on a customer has to maintain a written note about the conversation between the agent and the customer. This helps other customer care or collection agents know the exact status of the customer's account.
So, if some other agent calls on the customer the next time, s/he knows what exactly the matter is. This had not happened in Amit's case for he had no idea if the agent he was speaking with was located in Mumbai or Hyderabad. Besides, he had already had a number of such conversations regarding the matter.
The agent told him that since there were no money available in his bank account, the auto-debit could not go through so he was charged an auto-debit return charge. As the payment was not made before the due date, they had also charged him a late payment fee.
Amit demanded a copy of his account opening documents; he did not think he had given the credit card company the right to auto-debit from his bank account.
The executive at the other end told him she couldn't do so as she did not have the documents. Even her senior, who finally came on the line, refused to promise he would send those documents.
Amit was adamant and said he would not make any payment on his card unless he saw the account opening form and his signature below the auto-debit clause (Wasn't it the agent's duty to tell Amit about this clauses at the time of opening the account? Of course, it was also Amit's duty to ask the agent about it, which, unfortunately, he didn't).
Interestingly, both the customer care agent and her senior refused to give Amit their employee ID numbers. Employee ID numbers help customers locate the person s/he spoke with (In the USA, for example, it is mandatory for the customer care/ collection agents to give their employee IDs under the Fair Debt Collection Practices Act, if the customer demands it).
After this, whenever the collection agent would call Amit for his outstanding dues, he would ask them to show him or courier the documents first. This went on for about two months. Finally, the credit card collection agent knocked on Amit's door.
Not the kind to get easily bogged down after his disillusionment with the inspector, Amit decided to seek recourse with the banking ombudsman. The ombudman, who is appointed by the banking regulator in India, the Reserve Bank of India, can redress customer complaints against certain deficiency in banking services. S/he can be reached at www.bankingombudsman.rbi.org.in. This website contains all the details about how to approach this authority and how to file complaints against banks in case of any grievances. It is a one-stop shop for people having grievances against banks and the method of redressal.
The ombudsman did send a notice to the bank. The bank replied that no such incident had ever taken place. Following this, the bank's credit card manager from Hyderabad called up Amit's mother and apologised, even as he said the person must not have been the bank's agent. The bank also sent a complimentary haversack to Amit to assuage his feelings.
Finally, the bank did send Amit a scanned copy of his account opening form. Amit did indeed see his signature below the auto-debit clause and promptly paid the outstanding balance. Of course, he asked for cancellation of all the late payment charges.
Remember, most penalties are reversible and the customer care agents do show promptness in canceling them if you have a good case.
As of today, Amit's case is still pending with the banking ombudsman. Here are certain points to keep in mind so that you do not suffer the same misery Amit did.
1. Always ask questions to anyone who offers you a credit card, bank loan, personal loan, etc.
Do not take them at face value. Double-check the information they provide with a couple of other agents belonging to different banks.
Finally, if you are not satisfied don't buy their products or services.
2. Ask them about the finer points. More often than not, they may themselves don't know about it. In that case, ask them for their product's official brochures.
3. Don't sign blindly on the dotted line (remember Amit whenever such an impulse strike you!). Scan through the various clauses under which you are putting your signatures.
Ask these agents for their ID cards. Even if most of them are third parties (that is companies appointed by banks to get these formalities done), they do have a proper ID card. Take down their employee ID number, their telephone number and the address of their office. You may need them in case of any problem with their product or service.
4. Finally, read through the fine print on your own. No one else can do this for you.