With the e-commerce industry growing rapidly in India, the country is slowly moving towards becoming a paperless and cashless economy.
Electronic payments are picking up. More people are now using debit and credit cards on a daily basis. Credit cards especially, with interest-free windows, have seen huge rise in demand for big purchases.
However, all things good come with a downside. Credit cards have numerous charges and additional fees associated with them, which might seem like a bane if not used cleverly.
The monthly rate of interest, joining fee, annual fee charges, cash withdrawal, and late payment charges are a few such costs, which increase the possibility of paying more on your purchases than is needed.
Some common credit card disputes include being charged for an item multiple times, failing to receive refund for a returned product, charged for a cancelled service or application of higher interest rates.
What to do if you are charged wrongly
Owing to high interest rates and penalty charges, card users may panic if they encounter unwanted charges on their credit card bills. But this problem is not uncommon and can be resolved easily. Once you confirm that the amount charged to you is actually wrong, there are ways to tackle unwanted charges.
Resolve problem with merchant: The first corrective measure towards getting the issue fixed would be to get the charges checked with the merchant. You could speak to the store manager to figure out if the mismatch has happened from their end by looking at receipts and documentation. This is the easiest route to get your money refunded. However, if you are not able to track back your transactions or the merchant is not cooperative, you will have to approach the bank for help.
Get all your documents in place: Ensure you have all the required documents in place to prove the error before you approach the bank. For example, if you are receiving payment due bills even after closure of the credit card account, having a copy of the bank’s correspondence towards successful account closure can settle the claims in your favor. This is one reason why you should maintain records of a closed card as well.
In case of being charged a higher interest rate, ensure you have the terms and conditions document mentioning the rate of interest applicable.
Write to the bank and maintain a record of conversation: Once you know you have all the documents in place, initiate a correspondence with the bank regarding the error and keep a record of all communications. We would say stick to email or lettered communication, as phone conversation may not be helpful in case the bank is not able to resolve the issue and you need to escalate the issue with the Consumer Financial Protection Bureau.
In your letter to the bank, ensure your credit card statement dates are mentioned including details of the unwarranted charges.
Before writing to the bank, you can get initial details by getting in touch with the credit card helpline and reporting the error.
File an official complaint with your bank: If there is a mistake due to system error, the bankers resolve the issue once they are intimidated through written communication. In which case, refunds are completed almost immediately.
However, if the bank insists that the charges are legitimate, you can file a complaint with the bank.
Every bank has a grievance redressal system with a dedicated grievance redressal officer in charge. You can write to the grievance redressal department of your bank within 60 days of the occurrence and the officer in charge will respond to you in less than 30 days.
Failing which, you can escalate the matter with the banking ombudsman.
The RBI has directed all banks to escalate unsolved complaints and establish a system of addressing such complaints.
Appeal to the banking ombudsman: The Reserve Bank of India had initiated the banking ombudsman scheme in 2005 to redress the grievances of customers. Every bank has appointed officials in different locations, who you can spot from lists put up on the official website of the bank and RBI.
Complaint to the banking ombudsmen can be filed by writing on a plain paper or through email. On receiving complaint, the banking ombudsmen pull out relevant records to run investigations and then take a call as a neutral authority studying the merits of the case.
Take up the complaint with the appellate authority: If you are not satisfied with the response from the banking Ombudsmen, you can approach the appellate authority who is also the Deputy Governor of RBI for redressal of your grievances. The appellate authority then decides on how to deal with the case. You have a 45-day window to appeal against the decision of the banking ombudsmen.
Understanding the terms and conditions of your credit card and keeping a record of all card-related transactions can help you keep track of your bills better. RBI has put in place a streamlined process to help you find effective resolutions in case of any problem as a card holder.
However, make sure you pay your full bills eve, while investigations are on, or else you will still accrue interest.
If the dispute is successful the bank will refund your money.
The author is CEO, BankBazaar