Number One Banking Fraud India – Credit Cards

In a report compiled by the FreePress as obtained from RBI on the top 10 categories of Fraud in Indian Banking system, Credit Card Fraud occupies the Numero Uno slot. This is no surprise to us since in over 3 years of existence we have received so many complaints which tell us the true story. Who is at Fault ? The RBI ? The Banks ? Or The consumer ? Well, in our opinion, the major bug lies with the System itself along with the misuse by the consumer who was pampered and spolit by the banks.

The Deficiencies of RBI in Credit Card Regulations:

  • Rights of Consumers when a fraudulent transaction occurs the card which is reported to the bank as disputed transaction.
  • Should the Customer Pay the disputed amount [if capable of paying] to the bank until the issue is resolved or does the customer has the right to abstain himself from paying the disputed amount until the issue is resolved?
  • Does RBI Maintain a Blacklist of Merchants where Fraudulent Credit Card Transactions have occurred Or Does RBI Advise Banks to Maintain a Registry of Merchants who are involved in Fraudulent Transactions? If so, what is the action initiated by RBI on such Merchants?

How the Bank Failed in Credit Card Instruments:

  • Issued the Cards without Due Diligence of customers
  • Rampant mis-selling by its DSAs[Bundle of Liars]
  • Generous Credit Lines and Loans on Cards
  • Didn’t take initiatives to protect the consumer – Photo and Signature were not embossed on the Cards. Honored payments to Merchants where fraudulent transactions occurred, despite the payment being disputed by customer.
  • Unsolicited Credit Cards – Though it was very less in 2009

And the Consumer is at Fault Too:

  • Lacks knowledge of Credit and Card
  • Using Cards at Fake Merchant Terminals to avail CASH which was treated as Purchase by Banks

We had sought information from the RBI on the Total Number of Debit Cards and Credit Cards in use in the country, but they said that they don’t collect nor have this information.

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