Good news for credit card users. If any bank has issued you an unsolicited credit card, without your written consent, then you are not liable to pay for any loss suffered by the bank arising out of misuse of that card. Moreover, as advised by legal experts, you can also seek compensation for mental harassment apart from reimbursement for the cost incurred to defend the legal proceedings. In a recent case it has come to light that in the absence of the confirmation that the applicant has accepted the unsolicited card, a bank can't recover the charges for the usage of the credit card. In fact, in the year 2010, Canara Bank, MG Road branch, had filed a civil case against a Delhi resident, named R K Dhingra, for recovery of around Rs 30,000 as credit card dues. As per the bank, this money was due as Dhingra had used the bank's credit card issued to him between March 12, 2006 and March 21, 2007. However, when Dhingra refused to pay the money as well as respond to the bank's notice, the bank filed a case in the civil court. The civil court, however, dismissed the bank's claim in 2011, following which the bank moved the high court. But the high court upheld the civil court order, and said that the bank has failed to produce Dhingra's application for sanction of the card, nor could it produce any document related to handing over the card to the respondent. The HC then dismissed the bank's petition. RBI Circulars on Credit Cards It may be noted that considering the unabated & reckless growth in issuance of credit cards by banks and NBFCs, the Reserve Bank of India (RBI) had constituted a Working Group on Regulatory Mechanism for Cards in 2004. The primary objective was to (a) recommend regulatory measures which are to be introduced for plastic cards keeping in mind the need to encourage their growth in a safe, secure and efficient manner, (b) recommend measures to be introduced to ensure that the rules, regulations, standards and practices of the card issuers are in alignment with the best customer practices, and (c) to draw a roadmap for setting up of a grievances redressal mechanism for the card users. Pursuant to the report of the Working Group, the RBI for the first time issued a circular in November 2005, enlisting various best practices to be followed by banks in issuance and marketing of credit cards, including credit limits. Back in 2005, the RBI warned banks that unsolicited cards should not be issued and in case an unsolicited card is issued and activated without the consent of the recipient and the latter is billed for the same, the card-issuing bank shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient, amounting to twice the value of the charges reversed. From 2005, various directions have been issued, the latest being Master Circular on Credit Card, Debit Card and Rupee Denominated Co-branded Pre-paid Card Operations of Banks and Credit Card issuing NBFCs, dated 1st July 2015. \u201cApart from the directions issued back in 2005, the RBI has also stipulated that in addition to the compensation being twice the value of charges, the person in whose name the card is issued can also approach the Banking Ombudsman who would determine the amount of compensation payable by the bank to the recipient of the unsolicited card as per the provisions of the Banking Ombudsman Scheme 2006, i.e., for loss of complainant\u2019s time, expenses incurred, harassment and mental anguish suffered by him,\u201d says Sandeep Shah, Partner, N.A Shah Associates LLP. The RBI had noted that there have been instances where unsolicited cards issued have been misused before reaching the person in whose name these have been issued. It is clarified that any loss arising out of misuse of such unsolicited cards will be the responsibility of the card issuing bank\/NBFC only and the person in whose name the card has been issued cannot be held responsible for the same. The RBI also stipulated that the consent for the cards issued or the other products offered along with the card has to be explicit and should not be implied. In other words, the written consent of the applicant would be required before issuing a credit card. View of Legal Experts Giving his view on the case, Shah says that the matter relating to Canara Bank Vs R K Dhingra is related to year 2006, by which time the RBI circular had just been issued. \u201cThe Trial Court and the High Court rightfully ruled that in the absence of a bank being in a position to provide evidence relating to the application for issuance of credit card and also in absence of a confirmation that applicant had accepted the unsolicited card, the bank could not recover the charges for usage of the cards. Also, the non response by the applicant to the legal notice is not fatal and was not necessary,\u201d he says. In the matter relating to issuance of credit card by Canara bank, Dhingra in fact could have sought compensation for mental harassment apart from reimbursement for the cost incurred to defend the legal proceedings and various other relief stipulated by the Reserve Bank. \u201cWe would recommend that any consumer who is faced with a similar situation of having received an unsolicited card should immediately respond to the issuing agency quoting the RBI master directions and also claiming compensation. This course of action will surely redress the mental agony to begin with and also bring pressure on the issuing agency to take corrective action,\u201d advises Shah.