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 complainantâ€™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.