Council For Fair Business Practices

Important Information :

Recent Events Held :

Report on the Seminar on “Plastic Money Plastic Promises” held on August 30, 2004 at Babubhai Chinai Committee Room of IMC.

Mr. V. B. Haribhakti, President, CFBP welcomed the distinguished audience. He elaborated about the CFBP and its multifarious activities. He further stated that CFBP is having a Consumer Redressal Committee, which takes care of the grievances of the consumers and requested the audience to avail this facility to redress their grievances. He further stated that CFBP – SNDT testing center is testing products at nominal charges and the corporate clients of the laboratory includes companies like HLL etc. He then requested Mr. Gogia to address the gathering.

Mr. Subash Chander Gogia, Hon. Secretary & Chairman Programmes Committee explicated the objective of the seminar on ‘Plastic money Plastic Promises’ is to have meaningful discussion session to educate the consumers and enable them to make an informed decision. He also informed the gathering about series of programmes CFBP planning to have every month.

Mr. Gogia then introduced Mr. Saroj Nanda, Sr. Vice-President and Head, Merchant Services (India), Personal Financial Services, HSBC Limited and requested him to commence the presentation to enlighten the gathering about Credit Cards.

Mr. Saroj Nanda, in his presentation highlighted the facilities provided by Credit Cards issuers. He explained in details the process of transactions through credit cards. He also stated that to provide facilities the banks are making huge upfront investment on following:

Computer systems for processing capacity (security)
Large number of skilled personnel
Facility to handle card, statement, payment collections & dispute resolution
Create point of sale infrastructure to accept cards

He also stated the reasons behind aggressive promotion of Credit Cards. He also stated that by promoting the convenience of the product would bring in economy of scale. Which will provide

i) Safety of cashless transactions

ii) Power and flexibility for the consumers to spend and

iii) Convenience for managing finance.

He also explained the reasons behind rejection of applications. Since the Credit Card is the most risky consumer finance product, Evaluation is done based on the information shared by the consumer, Credit losses are high in India and there are no credit bureaus in India.

He also pointed out the following consumer payment options:

Low Risk & Low Convenience – Home Loans
Moderate Risk & Low Convenience – Car mortgage
Moderate Risk & Low Convenience – Personal Loans
High Risk & High Convenience – Credit Cards

He further stressed on how to use credit cards:

1. Separating business and personal spends may provide better finance management option

2. Since Card is like cash

- Not to carry the ATM – PIN along the card
- Ensure control on the card and do not part with it
- Always check the amount on the sales slip and terms and conditions on the invoice before signing the slip
- Not to use the card at unknown website
- Report lost card instantly
- Not to part with the card number, expiry date to strangers

3. Maintain Card statements

- Review the monthly statement before destroying them
- Ideally the card sales slips and invoices should be retained for 6 months
- Subscribe to the internet banking facility for easy access to the statement
- Balance in the card account can also be obtained from the ATM and call center.
- Inform any mismatch on the statement to the bank

4. Payment date

- Dairies the payment due date and pay on or before the date
- Subscribe to internet banking and opt for the payment alert

5. Payment options

- Cheque deposit boxes are available across the country
- Use local cheque or a cheque payable at par instrument
- Use direct debit to bank account or internet banking
- Use ECS for payment from other banks

6. To contact the bank

- Use the call center
- Use the PIN for standard information as well as to perform transactions through call centers
- Use the internet banking and leave queries
- Drop letter at the ATM or mail to the Card Centre

7. Avail the benefits

- Monitor the reward points from the statements, Internet banking and call center.
- Redemption can be done using internet, call center and letter

Mr. Uday B. Wavikar, Sr. Counsel, Consumer Protection Act & Joint Secretary, Consumer Court Bar Association for Maharashtra & Goa then enlightened the gathering on tackling issues related to Credit Cards. He pointed out that as a user of Credit Cards everybody is a consumer as per Consumer Protection Act and can seek redressal of their grievances through Consumer Courts. He also pointed out that the consumers are facing problems with respect to insurance which is provided by Credit Card companies. At the time of settlement of claims the companies ask to approach the Insurance Companies, where the consumer feels helpless in the absence of clear policy terms and conditions.

He further highlighted two judgments passed in the National District Redressal Forum.
The first was Central Bank v/s. Mohinder Singh where the card was misused and the amount involved was Rs. 50,000/-. It was held that the individual is not liable for this payment and the Bank had to settle the issue since the bank was informed about the loss of credit card well in time before it was misused.

The second was involving Citi Bank v/s. Ms. G. Jayanthi, 1995 where the installments were not paid in time by the cardholder. The Cardholder died and his wife claimed for insurance. It was held that since the facility of cardholder was withdrawn on account of non-payment of dues on time and hence the insurance facility automatically stands withdrawn.

Mr. Subash Gogia then introduced Mr. Vivek Patki, well-known Consumer Activist, associated with Mumbai Grahak Panchayat and requested him to present his views on the topic. Mr. Patki in his address pointed out that the Credit Card usage is in infancy in India. Over the period of time the usage will increase as well as the problems will also increase.

He said that the Credit Cards problems arise mainly out of

1) Sharing of Identity and

2) Use of Credit Cards by minors.

He also stressed on the problems faced by consumers due to aggressive telemarketing by the Credit Cards providers. He further highlighted the unethical techniques used for recovery from the cardholders. He stated that first a ‘small problem’ arises, which then becomes ‘Grievance’ if left unattended, and finally becomes a ‘Complaint’ if not addressed in time.

He further stated that one should ask himself a Question NAW before taking cards, which is

N – Do I need it?
A – Can I afford it?
W – Is it worth?

At summing up he stated that it is the responsibility of the banks to educate the consumers.

The speakers then satisfactorily answered all the questions raised by the audience.

Mr. Subash Chander Gogia, Hon. Secretary and Chairman Programmes Committee, then gave vote of thanks and expressed his gratitude towards speakers, sponsors, representatives of various newspapers - News Channels and the gathering.

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