Did You Know: Credit Card Companies In India Will No Longer Be Liable For Transactions That Happen Before A Card Loss Is Reported

by Vinaya HS on April 9, 2008

in Finance

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The following is a true account of a close friend’s experience after losing a credit card:

How the credit card was lost?

My purse was stolen on 20th January 2008 at an IKEA store in Elizabeth, NJ. I lost my Driver’s License, an HSBC credit card, and all my Debit Cards. I contacted the police, filed a complaint, and drove back home.

How HSBC was informed about the loss of the credit card?

Reaching home, I immediately rang HSBC customer care and reported the loss of my credit card (within 3 hours of my card being stolen). I got to know that my HSBC credit card had already been used at multiple places in NY within this time and that these transactions were in the billing queue. The HSBC customer care executive asked me to fax a letter stating the loss of my credit card along with the police report.

Follow-up from HSBC.

I received an email from HSBC that said, “we wish to inform that under the terms and conditions of card membership (Lost or Stolen Card section of the cardholder agreement), the cardholder is liable for all charges incurred till the time loss of the card is reported to the bank.”

WTF mate? Whatever happened to that 24-hour window during which we could report a card loss and not be charged for any fraudulent transactions.

It seems there is a new policy in place since September, 2007. The new policy reads, “credit card companies will no longer bear any expenses resulting from the transactions (of stolen or lost cards) that have happened before the card is reported as lost.”

The 24-hour window was the single protection for credit card users and has now been taken away by all credit card companies operating in India. In fact, I did not know about this policy until I got to a situation where I was forced to read the credit card rules. Credit card companies have not even updated their customers regarding this policy change.

Were you aware of this rule? Did your credit card company intimate you about this rule?




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{ 15 comments… read them below or add one }

Raj April 9, 2008 at 3:21 PM

Scary!! But credit cards are a necessity and if all the banks in India have done away with the 24 hour window then there’s really nothing we can do.

Anoop April 9, 2008 at 5:05 PM

@ Raj: There is one thing we can really do.. Cancel all the credit cards and use Master debt cards, that way these banks can’t play fools with us.

Vinay,

A good point really, what if HSBC keeps targetting there customers and getting the credit cards stolen from each one of them themselves, and claiming credit. Many times we would lose our credit card and do not notice untill we get back home, in that interim period if some one has used it, are we again liable?.. What a poor way to start up a system, it looks ridiculous, but these people are so clever to hide all the loop holes with customers before they sell it to us.

Vinaya HS April 9, 2008 at 5:06 PM

Exactly Raj. Do you, as a customer, know if your bank has implemented this change?

prashant April 20, 2008 at 5:25 AM

Interesting. Especially since this seems like it happened in the US and HSBC is an international company.

joseph June 11, 2008 at 8:04 AM

I lost my credit card in Rome and i could inform the Bank only after reaching home i.e next day. Meantime the fradulant transaction already taken place for Rs.85,000/=.
Now for the last10 months the HDFC bank is behind me for making the payments.

My experience with Credit card was good till 10 month back. Now i feels one should use card from the bank where thay will support you when this type of problem comes in front of you.
HDFC bank is not ready to give me transaction slip / merchant details to contact the merchant.
If you are travelling the flight from Rome to India
How you will be able to lodge a complaint in 24 hrs call center.
What is the responsiblity of merchant?
Bank is not interested to know all this.

For information of HDFC Card users.

aditya agrawal June 28, 2008 at 6:26 PM

To
R. Shankar Narayan – Asst Vice President,
Card Services,
HSBC
Subject: Currency conversion & hidden charges on international transactions

I purchased an item using my HSBC credit card in US dollars on the Internet. The seller turned out to be a fraud. I stopped my payment but HSBC has not refunded my 3.5% for currency conversion.
Take an E.g. lets say I paid $100 ($1= 40 rupees) so total in rupees. is 40*100=Rs.4000.
Now add currency conversion rate 3.5 % i.e. 4000 X 3.5 % = Rs140.
Total paid to seller Rs4140. I should be refunded Rs4140.

I paid $45.43 by mistake two times (24th May 08 & 25th May 08) and was charged Rs1996.89 for each transaction inclusive of 3.5% currency conversion fees according to HSBC. I canceled both the transactions on 25th May 2008 as the sellers account did not exist. I received two refunds of Rs1876.98. They said they will not refund the currency conversion charges of 3.5%.

If you calculate 3.5% of Rs1876.98 (amount refunded) you get Rs.65.70. That means I should have been charged Rs1876.98 Rs65.70= Rs1942.68 (Total Rs1942.68 X 2 = Rs3885.36) since I paid for the amount twice.

Why are you charging me Rs1996.89 instead of Rs1942.68

what are the hidden charges you are levying on me? No one is giving a logical answer. Customer care say dollar fluctuates. I have spoken to them for more than hours on my phone (Ashish Mukerjee ashishmukherjee@hsbc.co.in ), sent emails to nodalofficerinm@hsbc.co.in & info@hsbc.co.inon 20th June 2008 on receiving the statement but no reply.

When I paid on 24th May 2008 I was charged Rs1996.89 and when I paid & received a refund on the 25th May 2008 I was also charged Rs1996.89 then you cannot say the difference is due the fluctuation in the dollar. Why the refunds are less?
The issue is not the amount but I have been using your credit card regularly to make international transactions & this is the first time I have found out the hidden charges which you are charging me. I have always trusted the reply I have received from your customer care executives & today I feel cheated & betrayed. I must have spent at least at least 200-300 dollars in the past but since I never had a break up so I was unable to calculate the charges. I was about to make your payment when I found these hidden charges
Please investigate into matter immediately. I will not be responsible for the late payment till the matter is resolved. I have contacted you well in advance before the due date through phone & email. I have also written a letter & given it to your HSBC bank in Indore to forward to you.

Please take the matter seriously. I will not be responsible if I have to take unpleasant action.

Awaiting your reply
Aditya Agrawal

Mandar Potdar September 1, 2008 at 5:16 PM

Hi,
It is common knowledge that if you use the credit card at some shop, the shop owner NEVER verifies the signature, which is the only way for him to verify identity. Assuming that the person who has stolen your card uses it in a shop and has signed the slip with a signature which does not match even remotely, shouldn’t the shopkeeper be held responsible? In case of frauds on internet, the merchant (online shop owner) bears the brunt.
-Mandar

Bangalore Forum September 2, 2008 at 1:24 AM

What if your credit card fraud happens online? That too on big brands like indiatimes!!! We had a case in 2006 and still Indiatimes is not responding.

Thomson September 7, 2008 at 8:47 PM

Guys this happened to me too. I was under stress for over 3 months as the fraud amounted to 91OOO/- within 24hours.
I received all the charge slips and also saw the video of the culprits on CCTV. But CITIBANK still wanted me to pay. Also they have given it to me in writing that the merchant has no responsibility to check the signature which means that the signature has no relevance when a fraud happens.
RBI is the culprit here as they are responsible for ensuring customer interests.
I have now decided not to have any card with limit over 20K. Carry only one and use the other when this expires. Atleast this way i can save myself in case i loose a card.
My research also shows that Stanchart has a gold card with an insurance cover before reporting to the bank of around 40000/-. I will be applying for this card and use this as my primary card.

venkatesh hathwar January 24, 2009 at 10:25 AM

hi i lost my HSBC card also and after i got the stament only i found i lost my card because i never used this card so somebody used for 30000 so can u help me to solove this problem

sukhada chitari March 30, 2009 at 7:56 PM

It happened to me as well. I lost my ICICI credit card at Kentucky, USA. (My purse was stolen from my car)
I reported loss in 5 hours. ICICI bank is asking me to pay Rs.15,000 which were used by thieves.
Bank is not ready to give me any details about my dispute. (dispute was resolved in favor of bank)
Banks make policies and rules to cover themselves. I’m surprised how government is supporting these rules. Is there any way to launch complaint at consumer court or something like that in India?

rohitsoni May 20, 2010 at 6:44 PM

the same thing happen with me
i was owning HDFC Golden credit dard.

i was in muscat,
once i visit the shopping mall there, any how the card was drop my pocket without my knowledge.
after three-four days suddenly when i check my wallet i found cad missing.
immediately i found customer care contact from internate and
i inform the bank about the card loss, when i ask about the credit, they said its all RS. 30000/- being used, the card was used in the same shopping mall on the same date, where i visit.
second day i file a police complain, and also fortunately get the CCTV footage of the persons who swap the card.
I submit all the document to the head office(chennai) and branch office (Surat).
But the hdfc bank still sending the payment bill, instead of doing any search
or for any cooperation.
the local branch are always telling us to talk with call center number
I REALLY FEDUP WITH THE BANK POLICY

CONCLUSION:
” STAY AWAY FROM CREDIT CARD, BETTER USE DEBIT CARD”

ashish August 20, 2010 at 3:55 PM

I had a HSBC credit card which was lost and I reported the loss of credit card on 15th June 2010, but there were already some fraudulent transactions (total 8 transactions, worth Rs. 11382/- in total, were incurred on this card on 6th and 8th June 2010.
I reported FIR at Police department, and then I filled up and signed the dispute form and sent it alongwith FIR scanned copy at info@hsbc.co.in. on 19th June2010.

The charge-slips were not signed by me and the signature also does not tally with my signature recorded with HSBC.

HSBC denied the dispute claim raised by me saying that the transactions were done before the card was reported as LOST CARD. so they expect the disputed amount to be settled by me.
Also in other communications they have stated that all the transactions are authorised and settled electronically with the merchant bankers and there is no mannual intervention.
I again raised the issue with Nodal officer HSBC, and Country head – personal finance department of HSBC. But all of them are denying their HSBC’s responsibility for not matching the signature on chargeslip
I would like to know following things.,

1) what are the rules and regulations set by RBI for such fraudulent transactions (signature not matching on chargeslips) and responsibility of Card Issuer Bank.

Now I have no option left, but to apply for reversal of these transactions and compensation at Banking Ombudsman.

Please any banking lawer guide me how I can proceed with this issue?

ashish August 20, 2010 at 3:57 PM

I had a HSBC credit card which was lost and I reported the loss of credit card on 15th June 2010, but there were already some fraudulent transactions (total 8 transactions, worth Rs. 11382/- in total, were incurred on this card on 6th and 8th June 2010.
I reported FIR at Police department, and then I filled up and signed the dispute form and sent it alongwith FIR scanned copy at info@hsbc.co.in. on 19th June2010.

The charge-slips were not signed by me and the signature also does not tally with my signature recorded with HSBC.

HSBC denied the dispute claim raised by me saying that the transactions were done before the card was reported as LOST CARD. so they expect the disputed amount to be settled by me.
Also in other communications they have stated that all the transactions are authorised and settled electronically with the merchant bankers and there is no mannual intervention.
I again raised the issue with Nodal officer HSBC, and Country head – personal finance department of HSBC. But all of them are denying their HSBC’s responsibility for not matching the signature on chargeslip
I would like to know following things.,

1) what are the rules and regulations set by RBI for such fraudulent transactions (signature not matching on chargeslips) and responsibility of Card Issuer Bank.

Now I have no option left, but to apply for reversal of these transactions and compensation at Banking Ombudsman.

Please guide me how I can proceed with this issue?
If possible please send me a draft of letter to be sent to Banking Ombudsman.

My email – ashish_b1965@yahoo.co.in

Sameer Agarwal April 28, 2011 at 5:43 PM

I have a similar case. In october 2009 my credit card was stolen and used for 4 transactions within hours for 22,000 rupees. I blocked the card after 2 days and paid the outstanding amount, except this 22,000 then. Informed the bank in the writing, asked for their cooperation to catch the culprit. However, bank did not help. I did my own investigation and was able to see the culprit in CCTV camera of one of the merchant. Informed the police, filed the compliant but unfortunately police was not able to catch the culprit. I went to the police station for atleast 10 times. I forgot the matter and did not pay. But my loan request was denied recently due to my name in CIBIL. I have written to the nodal officer and head of consumer assets. Initially they said that I have to pay 54,000 Rs. (the balance in the last statement).However, I read the master circular from RBI and found out that bank is in violaton of several RBI guidelines. Hence I wrote back to them citing the specific section which they are not following. They have offeremed me a settlement of 25,000 Rs. But I think I dont owe them anything. Thus have written to Banking ombudsman and waiting for a reply. Will keep you posted on the same. Thanks

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