Indian Consumer Rights on Fraudulent Card Transactions + Disputed Charges

The Indian Credit Card Industry is bogged down with Thousands of Complaints of Fraud and Disputed Charges. The RBI is trying its best and thus we approached the RBI with your questions and here is what the bank has to say.

As a Credit Card Customer of a Bank regulated by RBI, what are my rights when a fraudulent transaction occurs on my card which is reported to the bank as disputed transaction?

RBI’s Response is as follows,

(i)In terms of Paragraph 4 of the Master Circular on Credit Cards Operations [PDF] of Banks, Banks have been advised that the card issuing bank should ensure the wrong bills are not raised and issued to customers. In case, a customer protests any bill, the bank should provide explanation and if necessary documentary evidence to the customer within a maximum period of 60 days with the spirit to amicably redress the grievances

(ii)Further, in terms of paragraph 6.2 (c) of the above circular, banks have been advised that they should be careful before reporting the default status of credit card holder to the CIBIL in case where there are pending disputes. The disclosure / release of information should be made only after the dispute is settled as far as possible. In all cases, a well laid down procedure should be transparently followed. These procedures should be transparently made known as MITCS – Most Important Terms and Conditions.

(iii)Also, in terms of paragraph 9 of the above circular, banks have been advised that they should set up internal control system to combat frauds and actively participate in fraud prevention committees / task forces which formulate laws to prevent frauds and take proactive fraud control and enforcement measures.

Should the Customer Pay the disputed amount [if capable of paying] to the bank or does the customer has the right to abstain himself from paying the disputed amount until the issue is resolved?

RBI’s Response,

Please See Reply as Above

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 where Fraudulent Transactions have occurred? If so, what is the action initiated by RBI on such Merchants?

RBI’s Response is as follows,

RBI does not maintain any such blacklist of merchants nor has RBI issued any instructions to banks to maintain a registry of merchants where fraudulent transactions have occurred. Please see RBI’s response sub-paragraph (iii) above

What does RBI rules / regulations / notifications / act / etc say on reporting the account by the Bank to Credit Bureau – CIBIL during an ongoing dispute of fraudulent credit card transaction between the Bank and the Customer ?

RBI’s Response is as follows,

Please see RBI’s response sub-paragraph (ii) above

For the convenience of Consumers, we are attaching a Scanned Copy of our correspondence with RBI [PDF] which can be used as 100% LEGAL Representation. print a Copy of the PDF and Attach with your Dispute to the Credit Card Company and also Refer to RBI’s Master Circular – DBOD.No.FSD.BC. 14 / 24.01.011/ 2011-12 in your correspondence.

Questions and Comments are welcome on the Credit Card Forum

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