Amit used to pay his dues without checking his credit card statement. Once, the amount payable seemed inordinately high and he happened to look at the details. He found an expense head, TDS on gift, with an amount of R11,400 debited to his account. He had not purchased anything, nor had he received any gift, and he was thoroughly confused as to what this amount pertained to.
On checking with his bank, he found that the bank was offering a gift to a lucky winner every week, and those spending R15,000 in a single transaction in the previous week qualified for it. Although the product would be given as gift, the credit card holder winning the offer would be required to pay TDS at 30% of the value of the gift before collecting the same. The TDS amount would be debited in the credit card account of the winner. Although Amit had spent R15,000 in a single transaction, he was neither aware of such a scheme, nor did he receive the gift. In such a situation, if he had not checked his account, he would not have realised that he was charged with TDS. In some cases, banks also debit your account erroneously due to mistaken identity.
Lets take another example. In bank XYZ, Sheela holds a locker, which is linked to her savings bank account. The bank charges annual locker rent of R1,000 and this is debited from the related savings bank account. However, there is a clause that if a customer maintains an average quarterly balance of over R1 lakh in the savings account, the locker rent is waived for the year. Sheela maintained this balance and, therefore, was entitled to the waiver. However, the bank erroneously debited the amount. Sheela did not notice this charge in the statement and the amount was deducted from the account due to this oversight.
Banks usually charge a fee for non-maintenance of the stipulated minimum balance in the account. In Madhav's case, the bank increased the minimum balance requirement from R2,000 to R10,000 in September. However, this increase was not communicated to the accountholders. The bank debited his account with R250 in October for non-maintenance of the minimum balance in September. Madhav failed to check his bank statement and, for the next eight months, the bank continued to debit R250 each month. When Madhav claimed a reversal of charges, he was told that the financial year had closed, and it was not possible for the bank to reverse the charges. Had he noticed these charges earlier, the bank could have refunded the amount.
So, what is the solution for customers One must check his bank statement and credit card statement every month to avoid such mistakes. If there is some transaction that was not authorised by you, inform your bank immediately. As all banks now provide online banking, make sure you activate this facility to be able to check your statements and balance at any time.
The writer is CEO, BankBazaar.com