Know Your Rights: Did You Know That Banks Are Liable to Pay a Penalty for Issuing Unsolicited Credit Cards?

by Vinaya HS on July 25, 2008

in Finance

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Source: RBI Notification.

Banks have been advised that unsolicited credit cards should not be issued and that 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.

In addition, 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 credit card as per the provisions of the Banking Ombudsman Scheme, 2006 i.e for loss of complainant’s time, expenses incurred, harassment and mental anguish suffered by him.

I’m a bit concerned by the wordings, “in case an unsolicited card is issued and activated without the consent of the recipient and the latter is billed for the same.” So, is it OK for a bank to issue an unsolicited but not yet activated credit card? I recollect having received an unsolicited credit card with the condition that the credit card would be activated on first use.

What do you think?

The notification further says,

There have been instances where unsolicited credit cards issued have been misused before reaching the person in whose name the card is issued. It is clarified that any loss arising out of misuse of such unsolicited cards will be the responsibility of the card issuing bank only and the person in whose name the card has been issued cannot be held responsible for the same.

Easy to say. Difficult to prove.




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{ 1 comment… read it below or add one }

Anil warbhe November 28, 2008 at 9:56 AM

I am a credit card holder holder for Barclays card since last one year.I have never used credit card till one year. I received a phone from Barclays executive saying that I have been selected as a privelaged customer and you will be getting some extra benefets without paying anythin. You just need to give credit card number.At first instance I ignored this. Second time I gave my credit card number to them. Now after 15 days they are asking me to pay 6000 Rs as a privelaged customer for getting benefits. Is there any solution to my problem as I had not purchased anything and the bank is still charging me 6000Rs which was told me you will receive as free benefits. Is there any solution to my problem.can someone help me on this issue

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