It happens again and again. A person either has not accepted the credit card that was provided to him even when he had not requested the credit card, or he was charged for some amount where he did not make the transactions. Mistakes can happen, even though in cases of a financial nature, one would expect a much greater deal of carefulness on the part of the bank. However, what really takes the cake is when the bank refuses to come clean, or behaves in a manner that is totally against accepted consumer service behavior:

Paresh Karia (30), the owner of Jeetendra General Store, a grocery shop near Sonapur Lane in Kurla (W), was in for a shock when he received an ABN Amro credit card statement for June showing Rs 44,900 as due. Karia claimed that he never received the credit card. Karia said he approached the bank several times, but they did not reply. The bank allegedly did not even respond to his advocates’ letters. According to him, the bank has even started sending notices and making calls. “In the last two months, I have received over 15 calls from the bank’s recovery department, threatening me and demanding repayment of the dues and the late fees.”
He said, “In April, one of the bank’s telemarketing executive called me, asking me to apply for the bank’s credit card. At first, I refused, but the executive kept calling me, after which, I took the card. In May, the executive took my signature on the form, and took documents like PAN card and my HSBC Bank statement.” After 15 days, Karia received a confirmation call from the bank to verify the documents. However, Karia refused to give the details on phone and asked the executive to come down to his shop. “The next day, I received a parcel from the bank,” said Karia.

From time to time, the RBI and various Consumer forums have asked banks and other financial institutions to behave, and many times charged penalties, but these incidents keep on happening. It will come to a time when courts will actually start hauling executives of the banks before the court, like a court almost did to the ICICI Chief.

This is about a seemingly big fraud that India’s largest private sector bank is playing on its customers, giving a designation for something, and then doing something that is directly opposite, just so that they can squeeze their customers even more.
I used to work in Chennai, and had an ICICI account over there (that was a salary account). Later, I used the same account for linking to the ICICIDirect stock trading facility. Some time later, I switched jobs and cities, and moved over to the capital city, Delhi. While migrating many of my details, I asked the local ICICI bank about what I should do about my existing account, and they informed me that I can use my account as is, except that checks that I issued would involve an additional charge because of the different city status. Okay, so I stopped using the ICICI Bank account for this purpose, and used my alternative salary account instead for check issual.
However, this always was a bit irritating since the stock trading account being ICICI meant that a lot of inflow and outflow would go through the ICICI account, and not being able to use the money for checks meant a small inconvenience. Imagine my pleasure some time later when I learned that ICICI Bank was now issuing payable-at-par checks. I started using these for regular transactions in Delhi, and imagine the shock when I saw a multi-city charge to my account. Upon asking ICICI Bank about this charge, guess what they told me about the ‘payable-at-par’ checks ?
“Multi-city cheque payment charge is a charge for clearing a payable-at-par cheque at an outstation location (i.e. outside your city).”
Further, this is their definition of what payable-at-par means:
“Please note that ‘Payable at par’ means a cheque is payable at any location in India.”
Very strange. So were they claiming that their earlier checks would not get paid if I gave them to somebody in Delhi ? I don’t see what benefit their customers are getting as per their definition of ‘payable-at-par’, it is only ICICI Bank that can claim that they are also issuing payable at par checks, and yet get away with charging a penalty to their users.
I tried using their complaint site at https://infinity.icicibank.co.in/salesEARWeb/web/rbi/jsp/index.jsp, but it built using Javascript, and the complaint option did not work (maybe they do not want to see complaints)

This scenario is one of the biggest fears that people have when dealing with credit cards, and handing this information off to other parties. You hand this off to a person purporting to come from a bank, and then find that charges are being piled on your credit card, and then have to run around in trying to clear yourself of these extra charges. It can get real frustrating and annoying for people to have to deal with such kind of problems. The normal tendency is to blame the bank for keeping such people on their rolls, for having such a process where misuse can happen, and for then being insensitive to the problems they are facing. Read more about the incident:

The manager of a Delhi-based private firm was arrested along with two accomplices on Friday on charges of allegedly making purchases using the credit card of an ICICI bank customer.
“We registered a case on the complaint of Atri and arrested Goyal from the Rohini branch of ICICI Bank. The other two were arrested at the instance of Goyal. During interrogation it was revealed that Goyal is the manager of i-process, an outsourcing private company of ICICI Bank, dealing with credit card users whereas accused Ashish Katyan and Dev Aggarwal were working as recovery agents in another collection agency,” said DCP (outer) Atul Katiyar. “The accused used to contact the customers and introduce themselves using a fake name. Then they used to send Ashish Katyan for collecting the card from consumers. Instead of blocking the cards, the three used to go shopping.

The basis for the information that these thieves come up with is information that the bank has revealed to them, so the bank should be the one to blame for this. In the process of reducing their costs by outsourcing this service, they have let such a thing happen, and hence need to be penalized. If this was a country with stronger implementation of privacy and data theft laws, the bank would be in serious trouble.

ICICI Bank is the largest private banks in India, and caters to a large number of people in terms of banking accounts, loans, etc. However, there have been many cases in the past where the bank has been penalized for harassing a person (do a search in Google and you will find many such cases); and it is not only ICICI, but many other banks who have been fined for such behavior. Such harassment by banks has started attracting the attention of the RBI and courts (more so, the various consumer forums), who have started fining the banks and using harsh language against the banks. Refer the details of this case (delivered in end-April 2008):

LUCKNOW: In a major judgement, the district consumer forum (DCF) here has directed the ICICI Bank to pay Rs 5 lakh as “exemplary compensation” to Dr AS Pradhan, a city-based doctor, for subjecting him to severe mental torture by forcing him to repay a loan which was never disbursed to him. Pradhan had applied for a Rs three lakh loan in the ICICI Bank in November 2003 for purchasing a second hand car.
He was asked to pay margin money of Rs 10,000 and complete the formalities with a promise that the loan would be sanctioned in a month. But as the sanctioning of loan got delayed, the person from whom Pradhan was supposed to purchase the car sold it off to another party.

And you can guess the rest. The bank did not disburse the money to the Doctor, but still had the gall to demand the money. In the end, the Doctor was forced to pay the money to the bank. It is only the consumer court that came to his help and gave him relief. At some point of time, the court systems in India are going to start ordering criminal charges where force has been used, and that will be an even bigger public relations disaster for the various banks.
They have to face a legal and judicial system that slows down recovery of their debt, but using force is not an answer. Additionally, doing it in a mistaken case is even worse.

It seems to be a story that keeps on repeating itself over and over; you hear of people being harassed by loan recovery agents for repayment of loans, or of somebody’s vehicle being taken away from them anywhere where the vehicle can be found, and so on. In extreme cases, the pressure or violence of the recovery agents can lead to injury or death of the person having taken the loan. The financing company or bank having advanced the loan would take recourse to goons or musclemen and they would use or threaten force in this regard.
For the last 2-3 years, this practise has been challenged in court, and there have been a number of decisions in this regard. Here’s another substantiating the same point that a loan recovery company cannot use force for loan recovery. Since a loan agreement is a civil contract, recovery of loan amount or the assets bought against the loan also can happen only when there is a court order:

Unless a bank or a financial institution is equipped with a court order to repossess a vehicle which it has given on loan, it has no authority to go to the residence of the borrower to take away the vehicle by force. This was observed by the state consumer commission in a recent order.
Taking strong exception to the method adopted by a finance firm to recover dues in the form of a few unpaid instalments from a consumer who took the money to purchase a vehicle, the commission headed by Justice J D Kapoor directed Citicorp Finance (I) Limited to pay Rs 50,000 to one Jan Mohammad, a resident of Mehrauli, for the mental agony, harassment and public humiliation he faced. It was observed by the commission that no financier or bank had the authority to forcibly take possession of the vehicle as the loan agreement or hire purchase agreement were civil contracts and therefore had to be enforced through civil remedy. In other words, through intervention of the court.

It may be argued that the judicial system in India is slow and cases take a long time to settle; however that cannot be an argument for using force or illegal means. A company needs to act in the constraint of the law, so they need to use greater discretion when deciding loans, or they need to go in for more out-of-court settlements in such cases.