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.

Say you are out shopping, and you do not notice that your purse of wallet has got stolen, or that you left it somewhere ? And somebody unscrupulous picks up your card and makes some large purchases in the time period that you have not reported the loss ? Well, then you are out of luck. As per major banks, your liability ends when you have reported the card stolen. Not yet declared the card stolen, or postponed for some time ? Well, then you are responsible for purchases made on the card. The twist is when you have found the card stolen, but need some time to hunt down the hotline number and go through the card stolen routine with the call-center ? As you will read, it is possible for a fast thief to use the card to make some heavy purchases in that time period, and leave you holding the bill:

Delhi’s Nishi Uttam recently complained that her wallet, which carried an ABN Amro Bank debit card, was stolen at a shopping mall. It took her 15 minutes to figure out how to report the loss to the bank’s helpline. Unfortunately, during this interim period, says Uttam, the card was fraudulently used by a man to buy jewellery worth Rs 36,000. She thus filed an FIR with the police, too.
In a written statement, ABN Amro Bank explains its stand on such cases: “…if the transactions have been made prior to reporting of the loss to the bank, then the liability rests with the customer to whom the card has been issued. This is as per the terms and conditions under which the card is issued.”Typically, banks tread this line in such cases, even as a senior Delhi banker concedes it would well take “10-15 minutes to run and report a loss complaint”.

In such cases, the customer is normally at the receiving end. It is not so easy to realize that your card is missing, or keep the card number and the hotline number handy, and it may take some time to get through the normally busy bank call center; and this much time may be enough to get some big items bought in your name. What are the solutions ?
1. Report a loss as early as possible
2. Keep the card number in your mobile phone
3. Keep the bank call center number in your mobile phone
4. Do not take this casually, and be sure to file the FIR as well when you find a loss of money

How many times would this have happened to you ? You are at a retailer buying a phone, or some consumer durable (TV, fridge, AC, DVD player, etc) and the retailer says that you need to pay 2% extra if you are paying by credit card. You really don’t have that much cash in hand, and do not have the patience to go back and get the required cash. So, you grumble a bit, and then end up paying that 2% extra. Well, congratulations, you also gave the shopkeeper the saving he wanted at your expense.
A credit card is supposed to cost the retailer that 2-3% of the total amount (that amount being the amount he needs to pay his bank, your credit card company and the Mastercard/Visa company). And why does he pay that much money ? Well, he no longer has to worry about whether the money he is getting is genuine or counterfeit, he is liable to get customers who don’t have cash in hand but want to buy the item (thus ensuring higher sales), and he no longer has to worry about handling cash (thus avoiding the risk of theft).
Read some text from this article that also advises against paying the 2% extra:

For some years now, it has been observed that certain merchant establishments-especially budget jewellery, electronics and grey market outlets-ask customers to shell out about 2% extra for purchases with credit cards. All card-issuing banks TOI spoke to, and the Credit Card Holders’ Association of India specified that merchant establishments cannot do so.
Says Sachin Khandelwal, head, cards group at ICICI Bank, “Typically, there is a fee a merchant agrees to pay for a terminal… If a merchant tries to recover it from customers, they must walk out.” Khandelwal also advises consumers to report such cases to credit card-issuing banks. “We may then blacklist them (the outlets) and remove our terminals.” An official at another card-issuing bank adds, “It is a bad practice. If someone charges 2% above MRP, you should report it to a consumer forum, irrespective of the value.”

Given all the advantages that credit cards enjoy, there is absolutely no reason for consumers to pay extra. All you have to do is exercise your right, and stand firm.

MR A, young call centre executive had just obtained his first credit card, when another bank’s DSA (Direct Sales Agent) approached him and explained the benefits of carrying two cards. The new card was for ‘free’ and the only document required was a photocopy of the first credit card. Mr A felt proud for the power of his first card and in his enthusiasm to quickly get another one in his wallet, he photocopied both sides of his card and handed over to the DSA executive. At around same time, Mr B, who teaches history at the city college, was impressed by the tele brand advertisements on TV and recently obtained an ATM-cum-debit card to be used for mail and telephonic orders. A few successful transactions later, he found one of his orders was not getting accepted even after repeatedly punching of the numbers as guided by the voice prompt. After making few attempts, he nearly gave up, before he realised that it was the last day to avail of the ‘best offer’. He, therefore, decided to take the help of a tele agent and read out to her the card number, validity date and the last three digits on the signature panel of the card for urgent processing of his order.
Prima facie, both the above stories sound mundane, which none of our friends above found anything disturbing either. However, Mr A and B were all shocked to see what they found in account statements of their cards the following month. They found their card had been misused and found items of online shopping transactions, which they never did.
As on date, transactions in CNP (Card-Not-Present with the merchant) environment such as online ticket booking, utility bill payments, purchase of books or any Internet, telephone or mail orders, merely require the users to enter their card number, card validity month/year and a code called CVV (Credit Verification Value) or CVC (Card Validation Code) that is available on the card itself.
CVV is a three-digit code typically imprinted at the end of signature panel on the reverse of the card (or a four-digit code little above the end of card number on front side) and is meant to serve as authorising code for CNP transactions. In short, CVV number in CNP transactions is a key to your card account, just the way the ATM PIN is for accessing your bank account. However, unlike the PIN for ATM use, CVV code is printed on the card itself and is rarely protected by the users. This exposes all credit and debit card users to the risk of their cards being misused for online shopping.
Banks, when contacted, remind you of the standard terms and conditions for issue of cards and say you are advised to protect your cards all the time. You must ensure that your card is swiped strictly in your presence and no one is making a note of your CVV for fraudulent online usage. They further tell you, in case you suspect that your card details are exposed, you must get a fresh card issued with new CVV and then protect that card well. Under these circumstances, the only way to protect your debit or credit card from fraudulent CNP transactions is to memorise the CVV and then put a small opaque sticker on it or simply erase it from the card.

If you feel that the fees and fines you play on your credit card is very high, then you are not alone. Given that this is a wide-spread complaint, the Reserve Bank of India instructed credit card companies to make all their charges, fines and feed clear to consumers, in a manner that can be easily understood. However, given that the credit card companies charge a very high rate of interest, it seems pretty natural that they are not so eager to do that; and this is true not only for the charges, but also for a whole host of other measures that the RBI has instructed credit card companies / banks to do over a period of time:

Ever wondered how long it would take to clear the Rs 50,000 outstanding on your credit card? Probably, no one, other than your credit card company, knows the answer. It’s a different matter that the credit card issuer — despite being told by the Reserve Bank of India as recently as last month — is unwilling to disclose the information, leading to many card holders falling in a debt trap due to high interest rates, which range between 20% and 42%.
But that’s not the only norm that is being flouted by most banks and non-banking finance companies issuing credit cards. Even the annualised interest rate is to be communicated clearly to card holders but it is usually buried in the small print on the reverse side of your monthly bill. But banks blame cardholders for not reading the bill carefully.
RBI guidelines, issued on July 2, has also mandated that banks illustrate in the monthly statement how they levy interest rates. But there are very few credit card issuers who follow the norms. In any case most banks illustrate the minimum amount due more prominently than the total outstanding, leaving credit cardholders to hunt for the latter number. This is despite the fact that the RBI guidelines stipulate that the statement must clearly warn the customer of the long-term consequences of paying only the minimum amount due.

Credit cards are a measure of convenience, but people must realize that this is a convenience that can turn into a trap. Credit cards free a person from the problem of carrying a large amount of cash at all points of time, but there are several other problems. A person could forget to pay the amount payable, or to buy just because a credit card is available and not worry about repayment. In such cases, the interest rates are very high, and it is necessary for the card holder to have full knowledge about the annualized rate that gets charged, if only to scare the person into paying in full.