Credit card tops consumer gripe list as banks fail to meet promises

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Mumbai: Credit-card related complaints topped the list of complaints received by the Banking Ombudsman, during the financial year 2007-08, followed by ‘failure of banks to meet their promises’ to clients, said the annual report of the of Banking Ombudsman Scheme, released by the Reserve Bank of India (RBI).

Other grounds of complaints related to deposits and remittances, non-maintenance of average quarterly balance, revision in locker charges, processing and renewal or pre-closure charges being levied without due notice to the customers.

The number of customers who have approached the Banking Ombudsman, in case of credit card complaints, has shown a sharp increase from 7,688 in 2006-07, to 10,129 in 2007-08, portraying a growth of 31.75%. According to the data, the total number of complaints received during 2007-08 has risen from 38,638 in 2006-07 to 47,887 in 2007-08.

These complaints pertaining to credit cards were mainly on account of issuance of unsolicited credit cards, unsolicited insurance policy, recovery of premium charges, charging of annual fee despite being offered as a ‘free’ card, issuance of loans over phone, disputes over wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder and abusive calls.

A general feature of these complaints across the board is the problem in accessing the credit card issuers and the poor response from the call centers.

The Reserve Bank of India introduced the Banking Ombudsman Scheme in June 1995 to provide low cost and effective forum for redressal of customer grievances against banks. The scheme covers a wide range of complaints concerning deficiency in banking services. In May 2007, the scheme was amended to allow for appeals from complainants and banks on the decisions of the Banking Ombudsmen. The Scheme operates within the guidelines framed by the RBI, which also administers the Scheme.

The Banking Ombudsman Scheme mandates every bank nominates a nodal officer in every region or zone for facilitating the functioning of the Banking Ombudsman Offices. Banking Ombudsman offices also periodically review the outstanding complaints with the nodal officers.