Krishnadas Rajagopal
Posted: Oct 23, 2008 at 0042 hrs IST
New Delhi, October 22 Unsolicited telemarketing calls trouble everyone — even judges. During a hearing on Wednesday, a senior judge of Delhi High Court gave vent to his ire on ICICI Bank for making “unsolicited marketing calls” to him.
“I receive calls at all time of the day from ICICI Bank,” Justice Vikramjit Sen said. “I do not know what business you get out of such calls.... You are a nuisance and have to face the music for making these unsolicited calls.”
The division bench was hearing an application moved by ICICI Bank for a stay on revival of contempt of court proceedings before the Delhi State Consumer Commission on the basis of a petition by advocate Nivedita Sharma. Sharma had filed her appeal in response to the “menace of unsolicited commercial telemarketing calls” and divulging “private and confidential information”.
On December 26, 2006 the consumer commission had levied a Rs 12.5-lakh penalty on the bank for making nuisance calls. Though the High Court subsequently stayed the Commission’s decision on September 11, 2007, the court had warned the bank against making “unsolicited marketing calls”.
The court had also warned the bank that the stay order should not be misinterpreted as “a licence to continue making unsolicited calls to customers”. The High Court had also given customers liberty to move the consumer commission if they continued to receive unwanted marketing calls from ICICI Bank.
“I moved the Commission because I still got calls from the bank despite registering with the ‘Do Not Call’ registry,” Sharma told Newsline. “The calls were in clear violation of the consumer commission’s order.”
The bank contended before the High Court bench today that Sharma was merely misusing the “liberty granted to her by the court” to seek relief with the consumer commission if still pestered by unsolicited calls. Terming her current litigation before the Commission as “misconceived”, the bank argued that it was impossible for Sharma to receive any unsolicited call as her name had been “updated” on the ‘Do Not Call’ registry.
At this point Justice Sen sought to prove the bank wrong by citing his personal example. “Do you think you are above the law?” the judge asked. “Who is your highest ranking officer in northern India... bring him here; let him explain these calls.”
The bench then kept aside the case for a while to give the counsel time to summon the concerned bank official. Later, the court gave some reprieve to the bank to file a suitable response by the next date of hearing.
Read the post on Indian Express
Thursday 23 October, 2008
Tuesday 14 October, 2008
When Life Succumbs to Debt
Another article appearing in Times of India, Mumbai Edition dated 14-10-2008
WHEN LIFE SUCCUMBS TO DEBT
There Has Been An Increase In Serial Borrowers, Who Keep Taking Credit Cards And Loans To Pay Off Earlier Amounts
Bella Jaisinghani | TNN
Mumbai: Desperate times call for desperate measures, though the most drastic option of all is chosen by only a few. The global meltdown has come as a double whammy to overspenders whose backs are already bent under piles of mounting debt.
Instances of Mumbaikars having taken several credit cards or loans just so they can attempt to pay off previous debt are not uncommon. The attempts are usually unsuccessful, as they only end up increasing the credit burden.
In 2006, then RBI governor Y V Reddy noticed how liberal pay packages and unbridled consumerism were resulting in a lethal cocktail. He recommended that banks devise a counselling mechanism to educate people about financial matters—mainly, how to resolve debt issues and how to invest. Bank of India, ICICI Bank and Union Bank took the cue and started such centres across cities and small towns too, since rising credit is not restricted to just urban areas anymore.
Of these, Abhay Credit Counselling Center, which is run by Bank of India in middle-class Prabhadevi, currently has 1,000 desperate borrowers on its counselling list. “Around 90% of these people are serial borrowers. They find it difficult to pay off money owed on one credit card, so they procure another one in the vain hope of paying up on the first. Then they get yet another one to pay off dues on the second,’’ said V N Kulkarni, chief counsellor. “They often do that with personal loans as well.’’
Just two days ago, a 32-year-old chawl resident walked into Abhay demanding that they arrange for an umbrella loan to cover his various borrowings. Kulkarni and his team were shocked to learn that the man, who had old parents, a wife and an infant to support, had taken eight personal loans amounting to Rs 22 lakh. He also had nine credit cards, whose total debt amounts to Rs 9 lakh.
“The youngster works with a private firm and earns merely Rs 10,000 per month,’’ said c o u n s e l l o r A s h o k Kargutkar, himself overwhelmed by the facts. “He even refused to believe he was a defaulter, saying he did pay off a little debt each month.’’ Upon learning that he did not have any assets, like a house that he could sell to pay off the debt, all the Abhay team could do was ask the gentleman to contact a lawyer and file for insolvency.
Part of the blame, no doubt, must be shared by the financial institutions that have been forcing credit cards on customers without checking their credit-worthiness. Kulkarni said that, of late, financial institutions had been distributing credit cards “like prasad”.
Counsellor Peter Fernandes strongly felt that banks ought to tighten the rules and conduct thorough background checks before issuing credit cards to perennial defaulters. “A borrower is not likely to disclose that he has several unpaid loans to his name and the banks don’t care until the client defaults,’’ he said.
Then, when it is too late, banks are known to despatch recovery agents to chase defaulters, often leading to unpleasant consequences. A woman who bought a car just so she could hire it out to a rental company for profit, was allegedly killed by the agency she owed money to. Afterwards, the agency even pressured her husband—who knew nothing of the loan—to pay up the loan. The police then made out a case for murder against the agency, which stopped the harassment.
Occasionally, credit counsellors do meet clients who warn that they will commit suicide if they go insolvent. “We patiently have to advise them that suicide is not an option, that they must learn to face the situation,’’ said Kulkarni. “The debt will remain even if he kills himself. In fact, how will the family manage financially without the man’s support.’’
FAMILIES FALL APART
MARCH 2004: Trader Ketan Anuwadia and his wife Keena killed their two sons, Rishi and Devansh, before committing suicide at their Kandivli residence. Ketan had run into losses of Rs 1.35 crore.
DECEMBER 2003: Santosh Surve, director of chit fund company Kalpavruksha Finance, shot dead his wife and two daughters before committing suicide at their Thane residence. He was unable to repay investors.
MAY 2003: Assistant police inspector Prashant Sawant shot dead his wife and son before committing suicide in their flat in Chembur. He was said to be depressed.
WHEN LIFE SUCCUMBS TO DEBT
There Has Been An Increase In Serial Borrowers, Who Keep Taking Credit Cards And Loans To Pay Off Earlier Amounts
Bella Jaisinghani | TNN
Mumbai: Desperate times call for desperate measures, though the most drastic option of all is chosen by only a few. The global meltdown has come as a double whammy to overspenders whose backs are already bent under piles of mounting debt.
Instances of Mumbaikars having taken several credit cards or loans just so they can attempt to pay off previous debt are not uncommon. The attempts are usually unsuccessful, as they only end up increasing the credit burden.
In 2006, then RBI governor Y V Reddy noticed how liberal pay packages and unbridled consumerism were resulting in a lethal cocktail. He recommended that banks devise a counselling mechanism to educate people about financial matters—mainly, how to resolve debt issues and how to invest. Bank of India, ICICI Bank and Union Bank took the cue and started such centres across cities and small towns too, since rising credit is not restricted to just urban areas anymore.
Of these, Abhay Credit Counselling Center, which is run by Bank of India in middle-class Prabhadevi, currently has 1,000 desperate borrowers on its counselling list. “Around 90% of these people are serial borrowers. They find it difficult to pay off money owed on one credit card, so they procure another one in the vain hope of paying up on the first. Then they get yet another one to pay off dues on the second,’’ said V N Kulkarni, chief counsellor. “They often do that with personal loans as well.’’
Just two days ago, a 32-year-old chawl resident walked into Abhay demanding that they arrange for an umbrella loan to cover his various borrowings. Kulkarni and his team were shocked to learn that the man, who had old parents, a wife and an infant to support, had taken eight personal loans amounting to Rs 22 lakh. He also had nine credit cards, whose total debt amounts to Rs 9 lakh.
“The youngster works with a private firm and earns merely Rs 10,000 per month,’’ said c o u n s e l l o r A s h o k Kargutkar, himself overwhelmed by the facts. “He even refused to believe he was a defaulter, saying he did pay off a little debt each month.’’ Upon learning that he did not have any assets, like a house that he could sell to pay off the debt, all the Abhay team could do was ask the gentleman to contact a lawyer and file for insolvency.
Part of the blame, no doubt, must be shared by the financial institutions that have been forcing credit cards on customers without checking their credit-worthiness. Kulkarni said that, of late, financial institutions had been distributing credit cards “like prasad”.
Counsellor Peter Fernandes strongly felt that banks ought to tighten the rules and conduct thorough background checks before issuing credit cards to perennial defaulters. “A borrower is not likely to disclose that he has several unpaid loans to his name and the banks don’t care until the client defaults,’’ he said.
Then, when it is too late, banks are known to despatch recovery agents to chase defaulters, often leading to unpleasant consequences. A woman who bought a car just so she could hire it out to a rental company for profit, was allegedly killed by the agency she owed money to. Afterwards, the agency even pressured her husband—who knew nothing of the loan—to pay up the loan. The police then made out a case for murder against the agency, which stopped the harassment.
Occasionally, credit counsellors do meet clients who warn that they will commit suicide if they go insolvent. “We patiently have to advise them that suicide is not an option, that they must learn to face the situation,’’ said Kulkarni. “The debt will remain even if he kills himself. In fact, how will the family manage financially without the man’s support.’’
FAMILIES FALL APART
MARCH 2004: Trader Ketan Anuwadia and his wife Keena killed their two sons, Rishi and Devansh, before committing suicide at their Kandivli residence. Ketan had run into losses of Rs 1.35 crore.
DECEMBER 2003: Santosh Surve, director of chit fund company Kalpavruksha Finance, shot dead his wife and two daughters before committing suicide at their Thane residence. He was unable to repay investors.
MAY 2003: Assistant police inspector Prashant Sawant shot dead his wife and son before committing suicide in their flat in Chembur. He was said to be depressed.
Borivli deaths: Brother, sis had 72 credit cards
The following news appeared in the Mumbai Edition of Times of India
Borivli deaths: Brother, sis had 72 credit cards
Nitasha Natu | TNN
Mumbai: Financial woes are being confirmed as the prime reason for the deaths of four members of the Borivli family whose bodies were found inside their rented flat on Sunday.
Suchitra Nair, 46, and her brother Sudhir Nair, 42, had taken nearly 72 credit cards from various banks and credit-lending institutes, police officials revealed on Monday.The duo had also taken a Rs 8 lakh loan from a private bank to start a business in agriculture and dairy farming. A suicide note found at the scene said, “We have taken the lives of our parents and then our own.’’ Police said Suchitra’s former colleagues have identified the handwriting on the note as hers.
The two are suspected to have hanged themselves at their residence in Ekta Woods after allegedly killing their parents, A K Nair, 81, and Shyamal, 70. However, the police have registered a case of accidental death.
Suchitra and Sudhir Nair had 36 cards each and had also taken a Rs 8 lakh loan
The question that begs to be answered is that were all the banks sleeping when they issued them such a huge number of credit cards?
Why did the banks not use the services of CIBIL before issuing such a large number of credit cards to the brother and sister duo?
Should the banks not be charged with Culpable Homicide not amounting to murder?
And, this is not a stray case, banks are distributing credit cards on a platter and then when they are about to fail, they rush for bail-outs.
Stupid bank, stupid bankers!
Friday 10 October, 2008
16-yrs RI for man in credit card fraud
TIMES NEWS NETWORK
Mumbai: A gang that used to duplicate international credit cards and use them for buying gold and electronics in several cities was convicted by a metropolitan court in Borivli.Jaidevsingh Dhillon (43), Putrasingh Mani (52) and Manojkumar Pillai (29) have been sentenced to 16 years’ rigorous imprisonment and have been asked to pay Rs 30,000 as fine. Dhillon has worked as a policeman in Malaysia, officers said. The two masterminds, Raju and Nandan, are believed to be in France.
According to the police, the racket had been going on from 2001 to 2003. The masterminds, Raju and Nandan, used a cardreader to transfer vital data from international credit cards on to blank cards which are easily available in the grey market. These duplicate credit cards were sent to Dhillon, Mani and Pillai, whose would use them for shopping in departmental stores.
In Mumbai, the duplicate cards were used to buy jewellery, consumer durables and electronics at Khar, Chembur, Ghatkopar, Mulund, Andheri and Malad. The gang also used them in cities like Chennai, Hyderabad, Delhi, Ahmedabad, Chandigarh and Vijaywada. “Genuine card-holders would be billed for the purchases made by the gang. The card-holders would inform their banks that such large purhcases were never made by them. Eventually, it was the card-issuing banks that incurred heavy losses,’’ said investigating officer Prakash Shishupal. The police recovered 14 duplicate international credit cards from the gang, besides two cellphone and Rs 8.5 lakh in cash.
In 2003, Dhillon jumpd bail and fled from the city. He then used some duplicate credit cards to purchase valuables in Chandigarh. Later, he changed his name and moved to Navi Mumbai where he ran a small hotel. For three years, he was on the run. In December 2006, the crime branch (unit V) managed to trace him and arrested him. “We recovered two television sets, computers, DVDs, printers and other valuables from Dhillon’s Malad office,’’ Shishupal said.
Mani and Pillai were convicted by a Borivli metropolitan court in August 2005. Dhillon was tried in the same case recently. Pillai also travelled overseas on a Canadian passport that he possessed in the name of Paul,’’ a police officer said.
Tuesday 9 September, 2008
SC refuses to allow high interest on credit cards
The following is report appearing in Mumbai Edition of Times of India dated 10th September 2008.
Dhananjay Mahapatra | TNN
NEW DELHI: Credit card users can breathe easy for the moment, with the Supreme Court refusing to stay a national consumer forum directive that banks cannot charge more than 30% interest per annum on defaults on card payments. This will protect consumers from exorbitant charges, which are as high as 49% in some cases.
Banks had appealed against the consumer court order and asked for a stay on it. Admitting appeals filed by MNC banks — HSBC, American Express, Citibank and Standard Chartered Bank — challenging the consumer forum order, a Bench comprising Justices B N Agrawal and G S Singhvi issued notice to Reserve Bank of India and the NGO 'Awaz', on whose petition the limit on interest rate was imposed.
What is revealing is the banks listing as many as 27 factors why they needed to charge higher interest rates and these included calls made from service centre to seek new customers. It would appear that almost all costs involved in banking activities over telephone and internet were to be charged to the hapless credit card holder, going by the banks' submissions to the SC.
When banks pressed for a stay on the ground that they are regulated by the RBI regulation guiding interest rates, the Bench merely issued notice on their applications and sought responses within three weeks.
But the threat of a higher interest has not gone away as the banks — HSBC, American Express, Citibank and Standard Chartered Bank — have teamed up to persuade the SC of what they said were their compulsions in charging between 36% and 49% interest.
The July 7, 2007 order of the National Consumer Disputes Redressal Commission (NCDRC) had ruled that "charging of interest rates in excess of 30% per annum from credit card holders by banks for the former’s failure to make full payment on the due date or paying the minimum amount due, is unfair trade practice".
It had also said that penal interest could be levied only once for the period of default and should not be capitalised, while also terming the practice of computing interest on monthly basis as "unfair trade practice". Among the factors listed by the banks justifying the exorbitant rates was the cost of calls. In other words, calls made randomly by the bank's authorised call centres incessantly to persuade people to take a credit card, is also taken into account for realisation through charging of penal interest from a defaulting card holder.
The other notable factors listed are:
Processing cost for setting up a new card in operating system
Cost of courier and cost of embossing the card
Cost of providing phone banking service
Cost of sending monthly statements
Cost of providing internet banking facility
Cost of waiving charges for service reasons
Cost of marketing and promotional offers
Cost of rewards and loyalty programme
"The National Commission has failed to appreciate that the rate of interest on defaulted or partial payments of dues is determined by taking into consideration various factors, including the risks of default, and therefore, this commission may not determine the issue as to whether the interest at the rates of 36% to 49% per annum is excessive," the banks said.
The original story appears here
Wednesday 16 July, 2008
Banks increase interest rate to 51% per annum on credit cards
Advisory on Credit Cards
Credit Consumers Association of India advises all credit card holders to exercise utmost caution in the matter of using credit cards.
All credit card issuing companies and banks have raised the interest rate on these cards to 3.15 to 3.5% per month translating to an annual compounded interest rate of 51%.
With credit card holders being asked to pay just 5% of the outstanding amount, the danger of negative amortization (your outstanding amount increasing every month even after paying 5% of the bill amount) has increased.
Illustrative Example
| Balance Outstanding | Bill Date | Outstanding | Purchase | Purchase Date | Payment Date | Payment @5% | Interest/Day | Days | Interest for the Period |
| 0 | 10/07/2008 | 0 | 2000 | 15/07/2008 | 20/07/2008 | 100.00 | 0.00 | 0.00 | |
| 1900.00 | 10/08/2008 | 1955.42 | 0 | | 20/08/2008 | 97.77 | 2.22 | 25.00 | 55.42 |
| 1857.65 | 10/09/2008 | 2010.83 | 0 | | 20/09/2008 | 100.54 | 2.17 | 30.00 | 65.02 |
| 1910.29 | 10/10/2008 | 2075.85 | 0 | | 20/10/2008 | 103.79 | 2.23 | 30.00 | 66.86 |
| 1972.06 | 10/11/2008 | 2142.71 | 0 | | 20/11/2008 | 107.14 | 2.30 | 30.00 | 69.02 |
Thus if you made a purchase of 2000/- and then kept on paying the minimum, your outstanding will actually increase instead of decreasing. This happens because the rate of interest is 3.5% whereas the rate of repayment of principal is just 1.5% of the total outstanding.
We request all credit card holders to
- Seek immediate help in case you are making just the minimum payments.
- Always make a payment of at least 10% of your outstanding amount.
- Make payments at least 3 to 4 days before the due date.
- Keep record of all payments made.
- Never make payments to collection agents as this involves collection charges.
- Keep your card usage below the credit limit.
- Carefully watch your card limit as your bank may suddenly and without notice decrease your credit limit and then charge you for over limit charges.
- When you go over limit, you do not have any grace period for payments. Make payments to reduce your outstanding below the credit limit and make payments before the bill generation date.
- Pay off the full amount on your credit card before the due date to enjoy 50 days of free credit.
- Refrain from using credit card for cash withdrawal as this attracts finance charges from the date of withdrawal and also any subsequent purchase also carries interest charges.
Monday 14 July, 2008
Credit-card debts may lead to plastic meltdown
Credit counsellors and financial analysts in the US and the UK are seeing evidence every day that credit card debts are increasing. Soaring fuel costs, rising food prices and climbing energy bills are all being kept at bay with credit cards. Shortfalls on mortgage repayments are also being made up with cash from credit cards. Many of these debt soaked consumers were already struggling to make their minimum monthly repayments.
More than $1 trillion is held on credit cards in America. In the UK, debts of more than pounds 50 billion have been run up on the plastic. Across the world, somewhere between $2-3 trillion is owed on credit cards.
Up to now, the credit crisis has passed by without plastic going into meltdown. Statistics have shown steady levels of arrears and suggested that many consumers have been successfully paying off part of their balances. Now there are increasing signs that this last breakwater, shoring up the economies of the western world, is about to crack under ever-increasing strains.
“Credit cards are definitely going to be one of the next big problems,’’ said Steve Nuttall, head of the financial-services research group at polling company YouGov. “Our research shows that everything started to fall off a cliff in about March or April and that should begin to show up in bad-debt charges by the end of the year.’’
The US Federal Reserve has also been warning credit-card lenders not to push their luck. The regulators are fearful that the economy could crack if consumers start being hit with higher fees and steep interest rate rises. The problem may be even sharper in Britain.
Analysts always say that “the markets get it right’’. Current market prices suggest that over 20% of the money owed on British credit cards is unlikely to be paid back. That would be almost three times higher than the previous record for bad credit-card debts, eclipsing the problems witnessed in the last housing crisis of the early 1990s.
“We are already hearing stories about people using their credit cards to keep up with their mortgage payments,’’ said Peter Crook, chief executive of Provident Financial, the doorto-door moneylender. “If that’s what’s happening, it’s a big red warning sign.’’ The recent Bank of England credit-conditions survey revealed that banks were surprised by the level of bad debts run up on their credit cards in the second quarter of the year. Demand for credit cards also increased as banks tightened their lending criteria across the board.
The UK’s debt-strapped consumers currently owe a staggering pounds 56 billion on credit cards. According to figures from Apacs, the payments network that supports the British banking system, this could climb to pounds 160 billion if those 31m cards are used to the max. The figure takes account of all the measures already taken by credit-card issuers to clamp down on borrowers by rejecting card applications and cutting credit limits.
YouGov’s research suggests that 15% of the British public is now behind on at least one bill of some kind or another. Of those in trouble, 38% say they are behind with utility bills or council tax, while 31% cite credit cards as their big problem.
Problems in credit-card debts have the potential to send a new wave of panic through global financial markets. Roughly $600 billion of debts run up on credit cards world over swill through the global financial system. Credit-card debts were packaged up and sold on by banks during the boom years, just like mortgages and car loans. THE SUNDAY TIMES
More than $1 trillion is held on credit cards in America. In the UK, debts of more than pounds 50 billion have been run up on the plastic. Across the world, somewhere between $2-3 trillion is owed on credit cards.
Up to now, the credit crisis has passed by without plastic going into meltdown. Statistics have shown steady levels of arrears and suggested that many consumers have been successfully paying off part of their balances. Now there are increasing signs that this last breakwater, shoring up the economies of the western world, is about to crack under ever-increasing strains.
“Credit cards are definitely going to be one of the next big problems,’’ said Steve Nuttall, head of the financial-services research group at polling company YouGov. “Our research shows that everything started to fall off a cliff in about March or April and that should begin to show up in bad-debt charges by the end of the year.’’
The US Federal Reserve has also been warning credit-card lenders not to push their luck. The regulators are fearful that the economy could crack if consumers start being hit with higher fees and steep interest rate rises. The problem may be even sharper in Britain.
Analysts always say that “the markets get it right’’. Current market prices suggest that over 20% of the money owed on British credit cards is unlikely to be paid back. That would be almost three times higher than the previous record for bad credit-card debts, eclipsing the problems witnessed in the last housing crisis of the early 1990s.
“We are already hearing stories about people using their credit cards to keep up with their mortgage payments,’’ said Peter Crook, chief executive of Provident Financial, the doorto-door moneylender. “If that’s what’s happening, it’s a big red warning sign.’’ The recent Bank of England credit-conditions survey revealed that banks were surprised by the level of bad debts run up on their credit cards in the second quarter of the year. Demand for credit cards also increased as banks tightened their lending criteria across the board.
The UK’s debt-strapped consumers currently owe a staggering pounds 56 billion on credit cards. According to figures from Apacs, the payments network that supports the British banking system, this could climb to pounds 160 billion if those 31m cards are used to the max. The figure takes account of all the measures already taken by credit-card issuers to clamp down on borrowers by rejecting card applications and cutting credit limits.
YouGov’s research suggests that 15% of the British public is now behind on at least one bill of some kind or another. Of those in trouble, 38% say they are behind with utility bills or council tax, while 31% cite credit cards as their big problem.
Problems in credit-card debts have the potential to send a new wave of panic through global financial markets. Roughly $600 billion of debts run up on credit cards world over swill through the global financial system. Credit-card debts were packaged up and sold on by banks during the boom years, just like mortgages and car loans. THE SUNDAY TIMES
Friday 11 July, 2008
Bad Karma catching up with MNC and Private Banks
A news report today in leading newspapers in Mumbai talks about CitiBank planning to sell its swank headquarters in BKC.
It is a typical case of bad karma catching up with the bank.
For years, Citibank and similar foreign and private banks lobbied with the mandarins in the law making institutions to offer products and services whose cost was way prohibitive for the common man.
They set up honey traps by offering easy credit through credit cards, personal unsecured loans and other such instruments where the interest rates were portrayed to be unregulated by the central bank. They charged interest in the region of 35 to 85% all in the name of unsecured credit.
These bank employed bright kids fresh off the MBA mill to sell these products and services. These kids were offered heavy salaries and pushed into achieving sales targets for the bank’s dubious products. To recover the small loans issued to masses, these banks hired dubious agencies purely on commission basis thus transferring the cost of their entire operation on the poor borrower.
Stories of mental, physical and financial harassment abound. Bank managers and officials ruthlessly went around first distributing money and then recovering these small loans.
Small borrowers, people who borrow 40,000 to 50,000 rupees (1000 to 1250 US Dollar) could be easily browbeaten into submission. Armed with a central bank looking the other way and legislators not bothered about the rape of the common man, these banks systematically looted the common man. Many were driven to commit suicide, many marriages went bad and many people’s families were destroyed.
All this has created a lot of ill will amongst the people and it is now translating to these very same banks facing collapse for deeds done by the managers who were supposed to make the bank grow. The sub-prime crisis in United States and its fall out on the world financial system is having its echo here in India too. These banks are now left holding the baby.
Soon these bank managers who were getting fancy salaries and perks will be also laid off. Banks like CitiBank will have no option but to cut all the flab. With share prices of the bank falling to 16$ from a high of 65$, it has already seen an erosion of 75% of its value. There is more to come from where all this came from and boy am I happy!
It is the bank’s bad karma that is catching up with them.
It is a typical case of bad karma catching up with the bank.
For years, Citibank and similar foreign and private banks lobbied with the mandarins in the law making institutions to offer products and services whose cost was way prohibitive for the common man.
They set up honey traps by offering easy credit through credit cards, personal unsecured loans and other such instruments where the interest rates were portrayed to be unregulated by the central bank. They charged interest in the region of 35 to 85% all in the name of unsecured credit.
These bank employed bright kids fresh off the MBA mill to sell these products and services. These kids were offered heavy salaries and pushed into achieving sales targets for the bank’s dubious products. To recover the small loans issued to masses, these banks hired dubious agencies purely on commission basis thus transferring the cost of their entire operation on the poor borrower.
Stories of mental, physical and financial harassment abound. Bank managers and officials ruthlessly went around first distributing money and then recovering these small loans.
Small borrowers, people who borrow 40,000 to 50,000 rupees (1000 to 1250 US Dollar) could be easily browbeaten into submission. Armed with a central bank looking the other way and legislators not bothered about the rape of the common man, these banks systematically looted the common man. Many were driven to commit suicide, many marriages went bad and many people’s families were destroyed.
All this has created a lot of ill will amongst the people and it is now translating to these very same banks facing collapse for deeds done by the managers who were supposed to make the bank grow. The sub-prime crisis in United States and its fall out on the world financial system is having its echo here in India too. These banks are now left holding the baby.
Soon these bank managers who were getting fancy salaries and perks will be also laid off. Banks like CitiBank will have no option but to cut all the flab. With share prices of the bank falling to 16$ from a high of 65$, it has already seen an erosion of 75% of its value. There is more to come from where all this came from and boy am I happy!
It is the bank’s bad karma that is catching up with them.
Monday 30 June, 2008
The case of Andre Stevan Butelho
Mr. Butelho holds an ICICI credit card number 4477-XXXX-XX59-2000. As Mr. Butelho was unable to make payments on this card ICICI bank offered him a settlement through one of its DSA, Synergy Consultants. Synergy Consultants is owned by Mr. Prakash Kokare from B 10/5 Ground Floor, Mathuradas Colony, Vidynanagri, Mumbai 400098 and has telephone numbers 66753437 / 26654177.
An agent of Synergy Consultants by the name of Gyaneshwar went to the office of Mr. Andre on 7/8th May 2008 (date is not confirmed) and handed over a settlement letter. On receipt of this letter, Mr. Butelho made a payment of Rs. 10,000 to this agent. As this transaction took place during working hours and due to other pressures, Mr. Butelho forgot to take cash receipt from the agent.
For all practical purposes Mr. Butelho assumed that his account had been closed.
Then one fine day he got a call from ICICI Bank asking him for payment. Mr. Butelho narrated the entire case to Mr. Shrikant at ICICI JB Nagar Office (Tel 66493667) on his visit to the branch and also showed the settlement letter to him.
He was shocked when the bank told him that the letter he was presenting was forged.
When Mr. Butelho tried to contact Mr. Gyaneshwar, he would not pick up his phone (9967098934). Mr. Butelho then approached the association for help.
When we called up Mr. Gyaneshwar’s number it was answered by his friend, Mr. Prakash Kadam. He gave us another number (9920204045). When we called this number a person by the name of Mr. Santosh Gunty responded and told us that Mr. Gyaneshwar has been sacked from service. He later back tracked from this version and told us that he was the team leader and that Mr. Gyaneshwar was on leave. When we asked for his address and contact information, Mr. Gunty refused to divulge any information. He gave us the mobile number of Mr. Prakash Kokare (9820101202).
When we called Mr. Prakash Kokare, he requested for the settlement letter to be faxed to him, which we did. On receipt of the fax Mr. Prakash told us that he will investigate the matter and come back to us.
When he reverted he told us that he has spoken to Mr. Gyaneshwar and according to his agent no money was received from Mr. Butelho and no letter issued. He gave us a contact number of a person by the name of Manish Acharya (Tel 66493435) who is tasked within ICICI bank to handle all such issues.
When we call this number there is no response.
Bottomline: ICICI is a cheat and its agents and associates are no better. We are now filing a criminal complaint of cheating with the Bhandup Police Station where the incident of payment took place.
An agent of Synergy Consultants by the name of Gyaneshwar went to the office of Mr. Andre on 7/8th May 2008 (date is not confirmed) and handed over a settlement letter. On receipt of this letter, Mr. Butelho made a payment of Rs. 10,000 to this agent. As this transaction took place during working hours and due to other pressures, Mr. Butelho forgot to take cash receipt from the agent.
For all practical purposes Mr. Butelho assumed that his account had been closed.
Then one fine day he got a call from ICICI Bank asking him for payment. Mr. Butelho narrated the entire case to Mr. Shrikant at ICICI JB Nagar Office (Tel 66493667) on his visit to the branch and also showed the settlement letter to him.
He was shocked when the bank told him that the letter he was presenting was forged.
When Mr. Butelho tried to contact Mr. Gyaneshwar, he would not pick up his phone (9967098934). Mr. Butelho then approached the association for help.
When we called up Mr. Gyaneshwar’s number it was answered by his friend, Mr. Prakash Kadam. He gave us another number (9920204045). When we called this number a person by the name of Mr. Santosh Gunty responded and told us that Mr. Gyaneshwar has been sacked from service. He later back tracked from this version and told us that he was the team leader and that Mr. Gyaneshwar was on leave. When we asked for his address and contact information, Mr. Gunty refused to divulge any information. He gave us the mobile number of Mr. Prakash Kokare (9820101202).
When we called Mr. Prakash Kokare, he requested for the settlement letter to be faxed to him, which we did. On receipt of the fax Mr. Prakash told us that he will investigate the matter and come back to us.
When he reverted he told us that he has spoken to Mr. Gyaneshwar and according to his agent no money was received from Mr. Butelho and no letter issued. He gave us a contact number of a person by the name of Manish Acharya (Tel 66493435) who is tasked within ICICI bank to handle all such issues.
When we call this number there is no response.
Bottomline: ICICI is a cheat and its agents and associates are no better. We are now filing a criminal complaint of cheating with the Bhandup Police Station where the incident of payment took place.
Harassment from HSBC Bank
Mr Hariram is a member of our association.
He hold the following HSBC Credit Cards
card no 4476-XXXX-XXXX-1048 and 5548-XXXX-XXXX-8852
This is his story
To give you a jist of the case, i had offered them a settlement proposition almost one and a half year s back , but they refused to come forward . subsequently they went on harrasing my parents at hyderabad , inspite of the fact that the bank has my official address and my residence address in mumbai.
One of the calls was made by a guy called Nilesh (may not be his real name as these people never reveal their full names) to my parents in Hydreabad, he introduces himself as a lawyer and that he has lent me 3lacs and he needs it back. They refused to give their contact address in mumbai.
Subsequently when my wife spoke to him, she informed him to come to the association office . On hearing this he started abusing my wife, and he refused to take the address. he had threatened with dire consequences . [ calls received from 67115654 , 67115689 ] when we called these numbers it rings no one attends. I understand that these numbers have only outgoing facility , no incoming as confirmed by Tata Indicom.
On saturday 28th June 2008 my wife got a call from this number 32937841 , a girl named medha who was calling from dtdc courier and there was a packet for me from delhi . when my wife asked for the name of the sender from delhi she refused to give as also their office address. this is also from hsbc.
I am very clear in the sense my settlement amount is not going to be more than 10k both cards, whether hsbc takes it or not . becasue they have harrassed my family, moreso my old parents.
Hariram.
----------------------------
Abuses continue, RBI continues to sleep
He hold the following HSBC Credit Cards
card no 4476-XXXX-XXXX-1048 and 5548-XXXX-XXXX-8852
This is his story
To give you a jist of the case, i had offered them a settlement proposition almost one and a half year s back , but they refused to come forward . subsequently they went on harrasing my parents at hyderabad , inspite of the fact that the bank has my official address and my residence address in mumbai.
One of the calls was made by a guy called Nilesh (may not be his real name as these people never reveal their full names) to my parents in Hydreabad, he introduces himself as a lawyer and that he has lent me 3lacs and he needs it back. They refused to give their contact address in mumbai.
Subsequently when my wife spoke to him, she informed him to come to the association office . On hearing this he started abusing my wife, and he refused to take the address. he had threatened with dire consequences . [ calls received from 67115654 , 67115689 ] when we called these numbers it rings no one attends. I understand that these numbers have only outgoing facility , no incoming as confirmed by Tata Indicom.
On saturday 28th June 2008 my wife got a call from this number 32937841 , a girl named medha who was calling from dtdc courier and there was a packet for me from delhi . when my wife asked for the name of the sender from delhi she refused to give as also their office address. this is also from hsbc.
I am very clear in the sense my settlement amount is not going to be more than 10k both cards, whether hsbc takes it or not . becasue they have harrassed my family, moreso my old parents.
Hariram.
----------------------------
Abuses continue, RBI continues to sleep
Monday 23 June, 2008
The case of Parvez Billimoria
Mr. Parvez Billimoria is in a serious debt trap. Since 1976, Mr. Billimoria, a Manager with National Garage, Mumbai, has been using credit cards. He has been issued Credit Cards by companies like Citibank, ICICI, ABN Amro, etc left right and center. He has more than 30 credit cards. And now he has no money to pay any one of them.
To compound his problems, these banks have been sending him unsolicited loans. ICICI sent him two cheques of 4 Lacs each.
Mr. Billimoria is 58 years old. When ICICI sent him the loan cheques he had just 1 more year of service left. Mr Billimoria does not own any property. He is actually staying with his wife in a property provided to him by Parsi Trust.
With no income to service these credit cards, Mr. Billimoria has no option other than to take cover under Bankruptcy Laws and seek protection from the courts.
Mr. Billimoria is receiving more than 20 calls every day from recovery agencies. ABN Amro wants him to commit suicide such that they can claim his insurance. Mr. Rahul Verma is calling him from ABN Amro Gurgaon Office (Phone Number 0124-4181344) and asking Mr. Billimoria to sell his wife so that ABN Amro's money can be recovered.
The reason we write about him is to point an accusing finger to the MNC and Private Banks which have thrown all caution to wind and not exercised proper due-diligence in giving loans to Mr. Billimoria. And now when they are not getting their dues, they are using the choicest of foul language in harassing an already stressed customer to the point of suicide.
Mr. Billimoria may commit suicide, if he does so, CCAI will file a case of abetment of suicide against all the banks and credit card companies that are driving him to a point of no return.
This is a warning to all banks and credit card companies to back off and also to RBI to wake up to the continued abuse of its guidelines on recovery of loans.
Mr. Reddy Sir, Governor RBI, all these banks are cooking a snook to you, what are you going to do?
Friday 13 June, 2008
How ABN Amro and Other Foreign Banks including Indian Private Banks cheat customers
When you take a personal loan from any Foreign or Indian Private Bank including ICICI, HDFC, Kotak Mahindra, please be sure of the fact that they have decided to cheat you right at the very outset itself.
When you take a loan, you are given a cheque which is normally dated for the second or the third week of the month. By the time the money is in your account, it is the end of the month.
And as per agreement executed by you, the bank is now ready to take back the first installment. This is where the cheating happens.
First, the bank does not give you the full amount of the loan, deducting the processing charges at source along with the service tax and all other levies.
Secondly, the bank takes back the first installment in the first week of the month that follows the disbursal date. Therefore in effect you are paying back the bank interest on the entire amount within 7 to 10 days of getting the loan.
This is a standard sharp practice deployed by all the banks other than nationalized banks.
With nationalized banks you may face a delay but they will never cheat you. Do you know why? Because promotions in Nationalized banks are not linked to returns generated by an individual. Whereas in MNC and Private Indian Banks, fresh MBA's are hell bent on increasing the profit of the bank in the hope that they will be able to climb the ladder of success faster, and they do!
KV Kamath takes home 10,00,00,000 per month as salary, how is that for success! He also holds stock options in the bank that he is heading. Do you think the owners of these banks pay these salaries?
If you said yes, you are completely wrong. It is the customers of the bank that make it possible for the company to pay Mr. Kamath the salary quoted above. And what does Mr. Kamath and his team do? Find new ways of cheating the customers that are paying for his salary!
When you take a loan, you are given a cheque which is normally dated for the second or the third week of the month. By the time the money is in your account, it is the end of the month.
And as per agreement executed by you, the bank is now ready to take back the first installment. This is where the cheating happens.
First, the bank does not give you the full amount of the loan, deducting the processing charges at source along with the service tax and all other levies.
Secondly, the bank takes back the first installment in the first week of the month that follows the disbursal date. Therefore in effect you are paying back the bank interest on the entire amount within 7 to 10 days of getting the loan.
This is a standard sharp practice deployed by all the banks other than nationalized banks.
With nationalized banks you may face a delay but they will never cheat you. Do you know why? Because promotions in Nationalized banks are not linked to returns generated by an individual. Whereas in MNC and Private Indian Banks, fresh MBA's are hell bent on increasing the profit of the bank in the hope that they will be able to climb the ladder of success faster, and they do!
KV Kamath takes home 10,00,00,000 per month as salary, how is that for success! He also holds stock options in the bank that he is heading. Do you think the owners of these banks pay these salaries?
If you said yes, you are completely wrong. It is the customers of the bank that make it possible for the company to pay Mr. Kamath the salary quoted above. And what does Mr. Kamath and his team do? Find new ways of cheating the customers that are paying for his salary!
ICICI Bank is above Supreme Court of India
ICICI Bank continues to employ the same procedure even after the Supreme Court of India has passed severe strictures against it.
In a recent case, Mr. Sandip Narayan Pagde approached us with a complaint against ICICI Bank. He had taken a Maruti Omni on a 5 year loan from ICICI. His installment was 4800/- which he has been paying till February 2008. With just 11 installments remaining balance, Mr. Pagde's vehicle was re-possessed by ICICI Bank because he had fallen behind in making 4 payments. He offered to make those payments but in his absence, ICICI recovery agents took away the vehicle by misleading his wife. They told her that Mr Pagde had just to pay 4 installments and then the vehicle could be his without making any further payment.
This is a very standard technique used by these recovery agents, they lure you with a false promise and a lucrative deal. In fact all they promise is false to start with.
In this case, when Mr Sandip approached the bank for taking back his vehicle, he was informed that the vehicle has already been sold for 70,000/-. This sale had taken place without the consent of the owner and in clear violation of Supreme Court guidelines in all such cases.
We are sure people in the recovery department, including one Mr. Dinesh Singh, who sits at the infamous RPG Tower, JB Nagar Branch of ICICI bank made a pot of money at the expense of the poor vehicle owner.
Their modus-operandi is simple. They will pick up a vehicle where there is even a small default. Then they will sell the vehicle to an agent of their choice by taking some money officially and a lot of money un-officially. All the people in the recovery departments of these banks including ICICI, HDFC, HSBC, CitiBank, etc are following the same practice.
Read Supreme Court Judgment below
"Banks cannot employ goondas to recover loans"
J. Venkatesan
Feb 27, 2007
NEW DELHI: The Supreme Court on Monday deprecated the procedure adopted by commercial banks of employing musclemen as agents to recover the outstanding loan amount from defaulters.
A Bench of Justices A.R. Lakshmanan and Altamas Kabir, in separate but concurring judgments, said: "We are governed by a rule of law in the country. The recovery of loans or seizures of vehicles could be done only through legal means. The banks cannot employ goondas to take possession by force."
The Bench was disposing of an appeal filed by the ICICI Bank against an order passed by the Allahabad High Court rejecting its plea to quash the criminal cases registered by the U.P. Government against the Managing Director and top officials for using criminal force against a loan defaulter.
The case was registered at the instance of the High Court on a complaint from Prakash Kaur, a 75-year-old widow, that the bank had sent musclemen to seize the vehicle for non-payment of one instalment of loan.
Mr. Justice Lakshmanan said: "Once the credit card or loan is taken and there appears a default, then the witch-hunt begins. Now the bank is the aggressor and the public is the victim. The first step to recover the money due is through the so-called recovery/collection agents. A very dignified term used for paid recovery agents who are individual and independent contractors hired by the banks to trace the defaulters and to both physically, mentally and emotionally torture and force them into submitting their dues."
He said: "A man's self-respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernised version of Shylock's pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner."
The Judge said: "It is mandatory that the banks be held vicariously liable for such acts of agents..."
In a recent case, Mr. Sandip Narayan Pagde approached us with a complaint against ICICI Bank. He had taken a Maruti Omni on a 5 year loan from ICICI. His installment was 4800/- which he has been paying till February 2008. With just 11 installments remaining balance, Mr. Pagde's vehicle was re-possessed by ICICI Bank because he had fallen behind in making 4 payments. He offered to make those payments but in his absence, ICICI recovery agents took away the vehicle by misleading his wife. They told her that Mr Pagde had just to pay 4 installments and then the vehicle could be his without making any further payment.
This is a very standard technique used by these recovery agents, they lure you with a false promise and a lucrative deal. In fact all they promise is false to start with.
In this case, when Mr Sandip approached the bank for taking back his vehicle, he was informed that the vehicle has already been sold for 70,000/-. This sale had taken place without the consent of the owner and in clear violation of Supreme Court guidelines in all such cases.
We are sure people in the recovery department, including one Mr. Dinesh Singh, who sits at the infamous RPG Tower, JB Nagar Branch of ICICI bank made a pot of money at the expense of the poor vehicle owner.
Their modus-operandi is simple. They will pick up a vehicle where there is even a small default. Then they will sell the vehicle to an agent of their choice by taking some money officially and a lot of money un-officially. All the people in the recovery departments of these banks including ICICI, HDFC, HSBC, CitiBank, etc are following the same practice.
Read Supreme Court Judgment below
"Banks cannot employ goondas to recover loans"
J. Venkatesan
Feb 27, 2007
NEW DELHI: The Supreme Court on Monday deprecated the procedure adopted by commercial banks of employing musclemen as agents to recover the outstanding loan amount from defaulters.
A Bench of Justices A.R. Lakshmanan and Altamas Kabir, in separate but concurring judgments, said: "We are governed by a rule of law in the country. The recovery of loans or seizures of vehicles could be done only through legal means. The banks cannot employ goondas to take possession by force."
The Bench was disposing of an appeal filed by the ICICI Bank against an order passed by the Allahabad High Court rejecting its plea to quash the criminal cases registered by the U.P. Government against the Managing Director and top officials for using criminal force against a loan defaulter.
The case was registered at the instance of the High Court on a complaint from Prakash Kaur, a 75-year-old widow, that the bank had sent musclemen to seize the vehicle for non-payment of one instalment of loan.
Mr. Justice Lakshmanan said: "Once the credit card or loan is taken and there appears a default, then the witch-hunt begins. Now the bank is the aggressor and the public is the victim. The first step to recover the money due is through the so-called recovery/collection agents. A very dignified term used for paid recovery agents who are individual and independent contractors hired by the banks to trace the defaulters and to both physically, mentally and emotionally torture and force them into submitting their dues."
He said: "A man's self-respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernised version of Shylock's pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner."
The Judge said: "It is mandatory that the banks be held vicariously liable for such acts of agents..."
Thursday 12 June, 2008
Another murder from ICICI with admission of guilt
Argument by ICICI "Killers on contact - Not the bank employee"
When the supari become legal in this country??? Take care of your life if you deal with the ICICI bank.
For more, read the following news item
"Ten days after being blamed for the suicide of 38-year old Prakash Sarvankar, ICICI Bank has given his family an ex-gratia payment of more than Rs 15 lakhs, reports CNBC-TV18.
Six-year old Prajakta was witness to her father being harassed by recovery agents of ICICI Bank, when he defaulted on a loan of Rs 50,000, which the bank describes as “small ticket”. Fed up of the insults, on September 17, Prakash Sarvankar hanged himself and blamed recovery agents of the ICICI Bank in his suicide note.
The incident evoked strong reactions from activists, who blamed the bank for using strong arm tactics. Now the bank has announced an ex-gratia payment to Sarvankar’s family, which includes a fixed deposit, which will give them about Rs 9,500 a month and insurance of Rs 25 lakh over 20 years.
But Sarvankar’s widow is still inconsolable.
“ He is not going to come back,” said Priyanka Sarvankar, Prakash Sarvankar’s widow.
Consumer organisations welcome the move, but demand stricter checks and balances on banks.
"Even the senior most official, in this case the CEO of the bank, is responsible for this,” said Vinod Chand, General Secretary, Credit Consumers Association of India.
For now four men are under arrest for abetting Sarvankar’s suicide. One of them is the owner of the recovery agency, and another, Kailash Choudhary, is an employee of I-Process. The police are investigating whether senior officials of the bank are responsible as well.
An inquiry has been launched into that alleged incident of harassment. The RBI backed Banking Codes and Standards Board of India has stepped in. According to sources, BCSBI has shot off a letter to ICICI Bank asking if it had done adequate due diligence before appointing the collection agency.
BCSBI also asked ICICI Bank to spell out the action taken against the agency and produce details of tangible evidence, which show that such incidents do not recur."
When the supari become legal in this country??? Take care of your life if you deal with the ICICI bank.
For more, read the following news item
"Ten days after being blamed for the suicide of 38-year old Prakash Sarvankar, ICICI Bank has given his family an ex-gratia payment of more than Rs 15 lakhs, reports CNBC-TV18.
Six-year old Prajakta was witness to her father being harassed by recovery agents of ICICI Bank, when he defaulted on a loan of Rs 50,000, which the bank describes as “small ticket”. Fed up of the insults, on September 17, Prakash Sarvankar hanged himself and blamed recovery agents of the ICICI Bank in his suicide note.
The incident evoked strong reactions from activists, who blamed the bank for using strong arm tactics. Now the bank has announced an ex-gratia payment to Sarvankar’s family, which includes a fixed deposit, which will give them about Rs 9,500 a month and insurance of Rs 25 lakh over 20 years.
But Sarvankar’s widow is still inconsolable.
“ He is not going to come back,” said Priyanka Sarvankar, Prakash Sarvankar’s widow.
Consumer organisations welcome the move, but demand stricter checks and balances on banks.
"Even the senior most official, in this case the CEO of the bank, is responsible for this,” said Vinod Chand, General Secretary, Credit Consumers Association of India.
For now four men are under arrest for abetting Sarvankar’s suicide. One of them is the owner of the recovery agency, and another, Kailash Choudhary, is an employee of I-Process. The police are investigating whether senior officials of the bank are responsible as well.
An inquiry has been launched into that alleged incident of harassment. The RBI backed Banking Codes and Standards Board of India has stepped in. According to sources, BCSBI has shot off a letter to ICICI Bank asking if it had done adequate due diligence before appointing the collection agency.
BCSBI also asked ICICI Bank to spell out the action taken against the agency and produce details of tangible evidence, which show that such incidents do not recur."
ICICI Bank fined Rs 50 lakh: Its recovery agents had beaten up man with iron rod
Express news service
Posted online: Tuesday , November 06, 2007 at 12:00:00
Updated: Tuesday , November 06, 2007 at 01:47:0
New Delhi, November 5 The State Consumer Commission has fined ICICI Bank Rs 50 lakh and ordered it to pay Rs 5 lakh to a borrower whose friend was beaten with iron rods and left bleeding on the road by recovery agents.
The commission described the bank’s conduct as “abominable” and in violation of orders of the Supreme Court. The fine will be held in a fund meant to provide complainants free legal aid.
In his complaint, Tapan Bose, a resident of Pandav Nagar, said he borrowed Rs 3.4 lakh from the bank in 2005 to buy a Maruti Swift. He paid monthly installments regularly. When three of his post-dated installment cheques bounced, he went to the bank and cleared the dues in cash. The bank never returned the bounced cheques.
Later Bose was unable to pay four installments, but the bank did not send him notice. Its recovery agents struck on January 8, when Bose and his friend’s son Vinod were visiting the Delhi District Cricket Association Club on Bahadur Shah Zafar Road.
Bose said he went into the club but Vinod preferred to stay back and listen to music on the car radio. He said he’d barely entered the club when he got a missed call from Vinod on his cellphone. When he went to check what it was about, he found the car missing and Vinod lying on the road bleeding. Vinod was admitted to LNJP Hospital, where he spent two weeks. In his statement to police, Vinod said a man knocked on the car window and asked him to reverse the vehicle. When he asked why, the man said he was from ICICI Bank, pulled him out and started beating him up. He said the last thing he remembered was being beaten up by three-four men and hit on the head with an iron rod. Police recovered the car from the bank’s godown. It was restored to Bose on a court order.
The bank told the commission that it had engaged Elegance Collxns to deal with loan defaulters. Justice JD Kapoor took the bank to task for “taking the law into its hands, causing multiple and serious injuries, and humiliating and insulting the man in public.”
http://www.expressindia.com/latest-news/ICICI-Bank-fined-Rs-50-lakh-Its-recovery-agents-had-beaten-up-man-with-iron-rod/236573/
Express news service
Posted online: Tuesday , November 06, 2007 at 12:00:00
Updated: Tuesday , November 06, 2007 at 01:47:0
New Delhi, November 5 The State Consumer Commission has fined ICICI Bank Rs 50 lakh and ordered it to pay Rs 5 lakh to a borrower whose friend was beaten with iron rods and left bleeding on the road by recovery agents.
The commission described the bank’s conduct as “abominable” and in violation of orders of the Supreme Court. The fine will be held in a fund meant to provide complainants free legal aid.
In his complaint, Tapan Bose, a resident of Pandav Nagar, said he borrowed Rs 3.4 lakh from the bank in 2005 to buy a Maruti Swift. He paid monthly installments regularly. When three of his post-dated installment cheques bounced, he went to the bank and cleared the dues in cash. The bank never returned the bounced cheques.
Later Bose was unable to pay four installments, but the bank did not send him notice. Its recovery agents struck on January 8, when Bose and his friend’s son Vinod were visiting the Delhi District Cricket Association Club on Bahadur Shah Zafar Road.
Bose said he went into the club but Vinod preferred to stay back and listen to music on the car radio. He said he’d barely entered the club when he got a missed call from Vinod on his cellphone. When he went to check what it was about, he found the car missing and Vinod lying on the road bleeding. Vinod was admitted to LNJP Hospital, where he spent two weeks. In his statement to police, Vinod said a man knocked on the car window and asked him to reverse the vehicle. When he asked why, the man said he was from ICICI Bank, pulled him out and started beating him up. He said the last thing he remembered was being beaten up by three-four men and hit on the head with an iron rod. Police recovered the car from the bank’s godown. It was restored to Bose on a court order.
The bank told the commission that it had engaged Elegance Collxns to deal with loan defaulters. Justice JD Kapoor took the bank to task for “taking the law into its hands, causing multiple and serious injuries, and humiliating and insulting the man in public.”
http://www.expressindia.com/latest-news/ICICI-Bank-fined-Rs-50-lakh-Its-recovery-agents-had-beaten-up-man-with-iron-rod/236573/
Top 10 Tips for avoiding Credit Card Problems
Do not pay membership fees. There’s no reason to. Either call your customer service representative and insist that the fee be waived, or find a better deal at consumer-friendly.
Reduce your bank credit accounts to a maximum of two. One for a monthly balance: a no-frills card with low interest (under 9.9% fixed or 7.9% variable). The other to be paid off each month: a higher interest rate card with benefits like free car rental insurance or annual itemized statements.
Make sure the “grace” period is at least 21 days. And resist frequent flyer reward programs with membership fees unless you charge over $2,000 per month. In general, the best rewards are cash-back programs–-at least 1.0 percent of all charges--with
some over 2.0 percent after exceeding a specified level. If you choose a “free” gift, make sure that the delivery fees are modest or you will “eat up” your hard-earned points.
DEMAND a lower interest rate. Call your customer service representative and bargain over the phone. Play hardball and insist on talking to a supervisor--the worst they can do is say “no,” and that’s unlikely.
Lock in a fixed rate account now. Interest rates are likely to continue to rise, including home mortgages.
Look out for the “bait and switch” maneuver. If the credit offer sounds too good to be true, it probably is. Make sure that the credit card you receive is the one you applied for by carefully checking the terms--and if it isn’t, demand the original terms or cancel the credit card immediately.
Monitor “fixed for life” interest rates. It’s not unusual for the 3.9 percentage rate that you started with to jump to 28.9 percent simply due to rising balances on other bank accounts or being late by only one day on a single payment–-and we have the U.S. Congress-sanctioned “universal default” provision to thank.
Check for “tiered” interest rates on your account balances. Oftentimes cash advances, normal purchases and low introductory “teaser” specials are charged at differing rates. Keep in mind these short-term rates can expire and leave you with a large balance at the higher rate.
Cancel unused credit accounts. You may have accounts open you don’t even remember, like store credit cards, harming your credit score. Check your free credit report at www.annualcreditreport.com and cancel the most recent accounts first.
Don’t even think about a credit card “benefit” program. These unemployment and disability programs are pricey and worthless. Use the premium you’re NOT paying to pay down balances instead.
http://www.stopthesqueeze.org/
http://www.indebtwetrust.org/
Trapped by debt? Free yourself in 7 steps
The Basics
Trapped by debt? Free yourself in 7 steps
There's an economic recovery coming, and what an opportunity for you: Now you have time to get your financial life under control.
By Terry Savage
The recession may be over -- or it may have been so brief that it didn’t officially qualify as a recession in spite of all the official pronouncements. But whatever the statistics say, many American families still find themselves in a personal financial recession.
Americans are declaring bankruptcy at record rates, with one in every 100 families affected by a bankruptcy. Though the stigma has diminished, the effects linger, touching your life in unexpected ways. For example, many prospective employers will pull a credit report as a character reference.
If you’re overwhelmed with debt, the economy is giving you some breathing room now. Take advantage of the upturn to liquidate your debt. The next time around, you might not have this opportunity. There’s still a push in Congress for more stringent bankruptcy legislation. And if interest rates start to rise, the burden of variable-rate credit cards and mortgages will become heavier to bear.
Americans are now carrying $683 billion in revolving credit card debt. That’s not the amount we charge every month; it’s the outstanding unpaid balances on which people pay interest. And, according to a report by Cambridge Consumer Credit Index, 47% of the people who paid less than the full amount on their credit card bills in a recent month, made only the minimum payment due. In fact, only 13% of Americans with an outstanding balance could afford to pay more than half the balance.
Pay now, or pay and pay and pay later
Not paying off the debt is a strategy that will bury you in interest charges. The way some companies calculate the required minimum payments, it could take you as long as 30 years to pay off your original purchase. And along the way, you’ll pay four times the original charge in finance charges.
Surely the purchase that seems so important this month isn’t worth a lifetime of indebtedness. The couch that is so attractive today will likely be long gone in 30 years. Vacation memories and photos will be faded if you’re just paying off that hotel bill in three decades. And a meal charged today is down the drain before the bill even arrives.
It’s time to rein in that debt and do something about paying it down. Here are seven steps you can take to get your debt under control:
Step No. 1: Make a list of what you owe. This first step may be the hardest part of dealing with your debt. Put all your bills in a pile. Then list your debts in order, starting with the largest balance first. Next to the amount, list the minimum monthly payment, and the interest rate you’re paying on that card. Now you know where you stand.
Step No. 2: Prioritize your repayments. If you have one or two small balances, you might want to apply extra money to pay them off, while continuing to pay the minimums on the cards with larger balances. Or you might want to pay off the card with the highest interest rate first.
When you’ve paid off the smaller balances, attack the larger ones. Here’s a trick that can save you years of interest charges. Simply double the minimum monthly payment -- and don’t charge another penny. That should get you out of debt in less than three years.
You can also use the debt evaluation tool at MSN Money. It will help you evaluate your situation and prioritize your payments.
Step No. 3: Eliminate credit cards and don’t roll over balances. When you pay off a card, notify the company that you want to close the account. Don’t just stick the card back in your wallet where it will tempt you again.
And don’t roll balances from card to card. This is a tempting way to make yourself believe that you’re doing something about your debt problem, if only by lowering the interest rate you’re paying. Switching from card to card has drawbacks. Every time you get a new card, you’re generating an outstanding open credit line that will appear on your credit report. Other lenders may be unwilling to let you keep rolling balances. And when those tempting introductory rates expire, you could be stuck with huge balances on high rate cards.
Step No. 4: Get a copy of your credit report and credit score -- and study both carefully. Your credit report is simply a compilation of your bill-paying history. Don’t hide from the truth. There may be some errors on your credit report that you’ll want to correct by contacting merchants. And if you do make progress toward paying down your balances, you’ll want to make sure they’re correctly reported.
You’re entitled to a free copy of your credit report if you’ve been turned down for a loan or a credit card. And there are many Web sites that offer a report for under $10 -- or even for free, if you sign up for a credit monitoring service that you might not need.
Your credit score is a different, more complex evaluation of your creditworthiness. Your credit score doesn’t just report your payment history; it uses a formula that assigns a weigh to factors such as bill repayment habits, percent of available credit used, and even your employment history. This credit score is used in almost every mortgage decision, and may be used in one form or another when pricing life or homeowner's insurance or car loans.
The most frequently used version of the credit score is the FICO score created by Fair Isaac & Co., the company that pioneered the concept of scoring. A FICO score ranges between 300 and 850. About 39% of the population scores above 750 -- and a score below that level is a warning signal.
Some aspects of your credit report are beyond your immediate control. They’re calculations based on the length of time you’ve had the same accounts open. But other factors in your credit score that weigh heavily are your timely bill-paying habits and the percentage of your credit limit that you are using on each card.
You can get a copy of your Equifax credit report and your FICO score at myFICO.com or you can click here on MSN Money. The cost is $12.95 -- and it includes online access so you can track any changes in your credit report.
And by 2005 you should be able to get credit reports for free. The Fair and Accurate Credit Transactions Act, signed into law by Congress in Dec. 2003, gives every American the right to a free credit report every year from each of the three major credit bureaus: Equifax, Experian and TransUnion. But it will take a while for the government to write the exact regulations for the freebies and more months for the companies to comply.
Step No. 5: Make a spending plan. Now’s the time to change your free-spending ways. To do that, track the money that’s coming in and going out. Fortunately, there are easy ways to do that. One thing worth spending money on is personal finance software such as Microsoft Money and Quicken. Both programs let you track all your check writing by category and make monthly comparisons of your actual spending to the amount you’ve budgeted.
Use a debit card instead of your credit card. Then, when you download your bank transactions into your Quicken or Money program, all of your debit transactions will be included, and can be easily categorized. (If you’re not paying bills online, you’ll need to keep the receipts and enter them into your checkbook and your budget plan.) Your bank ATM card is a debit card if it carries the Visa or MasterCard logo. You won’t earn points for your purchases, but you won’t run up bills that have to be paid at the end of the month. You can only use the card if you have money in your account!
Step No. 6: Be careful about the equity in your home. In the past few years, Americans have withdrawn billions of dollars worth of equity in their homes. The ads and commercials are tempting, because the rates on home equity loans are typically lower than the rates charged on outstanding credit card balances. And the interest on a home equity loan may be deductible.
But there are dangers in home equity loans. Frequently, the money is used to pay down credit cards, which are then charged up again. The banking industry has a term for it: reloading.
Be very careful about digging into this last reserve. Yes, home values have been rising 5% to 6% a year in recent years, according to data from the National Association of Realtors. But there’s no guarantee that home prices will continue to rise at the current pace. And if you have future problems that require cash, you’ll have no place to turn. Instead, you’re putting your house on the line.
Step No. 7: Get help. Sometimes credit problems are easily attacked once you’ve faced up to them. But for some people, the problem of overspending is a psychological one. Spending can become a habit that’s as difficult to kick as alcohol, drugs or gambling. And then there are those who are over their head in debt because of circumstances they truly could not avoid: medical bills or divorce or loss of a job.
In those cases, it’s wise to seek help from professionals. The only problem is that there are so many advertisements for “credit counseling” that you can’t be sure whether they’re rip-offs. I’d suggest you stick with one of the national, non-profit credit counseling services such as Consumer Credit Counseling Services.
Many people are afraid that just one visit will be reported to the credit bureaus and make their problems even worse. That’s not the case. You can talk with a credit counselor on a private basis. Only if you enter their debt repayment program, where they contact your creditors and arrange for lower payments or interest rates, does this relationship appear on your credit report.
Another excellent source of advice and assistance is Myvesta, formerly Debt Counselors of America, a nonprofit financial crisis center. (See link at left.) Myvesta offers individualized counseling, a debt management service, advice on avoiding bankruptcy and foreclosure, and even counseling for families buried in debt. This is another source you can trust completely. Of course, all the counseling and advice in the world is useless without your own personal determination to deal with your debt.
The bottom line
If you’ve taken these seven steps, you should be able to work your way out of debt and toward a brighter future. It will take time and lots of self-discipline. It’s worth the effort.
Trapped by debt? Free yourself in 7 steps
There's an economic recovery coming, and what an opportunity for you: Now you have time to get your financial life under control.
By Terry Savage
The recession may be over -- or it may have been so brief that it didn’t officially qualify as a recession in spite of all the official pronouncements. But whatever the statistics say, many American families still find themselves in a personal financial recession.
Americans are declaring bankruptcy at record rates, with one in every 100 families affected by a bankruptcy. Though the stigma has diminished, the effects linger, touching your life in unexpected ways. For example, many prospective employers will pull a credit report as a character reference.
If you’re overwhelmed with debt, the economy is giving you some breathing room now. Take advantage of the upturn to liquidate your debt. The next time around, you might not have this opportunity. There’s still a push in Congress for more stringent bankruptcy legislation. And if interest rates start to rise, the burden of variable-rate credit cards and mortgages will become heavier to bear.
Americans are now carrying $683 billion in revolving credit card debt. That’s not the amount we charge every month; it’s the outstanding unpaid balances on which people pay interest. And, according to a report by Cambridge Consumer Credit Index, 47% of the people who paid less than the full amount on their credit card bills in a recent month, made only the minimum payment due. In fact, only 13% of Americans with an outstanding balance could afford to pay more than half the balance.
Pay now, or pay and pay and pay later
Not paying off the debt is a strategy that will bury you in interest charges. The way some companies calculate the required minimum payments, it could take you as long as 30 years to pay off your original purchase. And along the way, you’ll pay four times the original charge in finance charges.
Surely the purchase that seems so important this month isn’t worth a lifetime of indebtedness. The couch that is so attractive today will likely be long gone in 30 years. Vacation memories and photos will be faded if you’re just paying off that hotel bill in three decades. And a meal charged today is down the drain before the bill even arrives.
It’s time to rein in that debt and do something about paying it down. Here are seven steps you can take to get your debt under control:
Step No. 1: Make a list of what you owe. This first step may be the hardest part of dealing with your debt. Put all your bills in a pile. Then list your debts in order, starting with the largest balance first. Next to the amount, list the minimum monthly payment, and the interest rate you’re paying on that card. Now you know where you stand.
Step No. 2: Prioritize your repayments. If you have one or two small balances, you might want to apply extra money to pay them off, while continuing to pay the minimums on the cards with larger balances. Or you might want to pay off the card with the highest interest rate first.
When you’ve paid off the smaller balances, attack the larger ones. Here’s a trick that can save you years of interest charges. Simply double the minimum monthly payment -- and don’t charge another penny. That should get you out of debt in less than three years.
You can also use the debt evaluation tool at MSN Money. It will help you evaluate your situation and prioritize your payments.
Step No. 3: Eliminate credit cards and don’t roll over balances. When you pay off a card, notify the company that you want to close the account. Don’t just stick the card back in your wallet where it will tempt you again.
And don’t roll balances from card to card. This is a tempting way to make yourself believe that you’re doing something about your debt problem, if only by lowering the interest rate you’re paying. Switching from card to card has drawbacks. Every time you get a new card, you’re generating an outstanding open credit line that will appear on your credit report. Other lenders may be unwilling to let you keep rolling balances. And when those tempting introductory rates expire, you could be stuck with huge balances on high rate cards.
Step No. 4: Get a copy of your credit report and credit score -- and study both carefully. Your credit report is simply a compilation of your bill-paying history. Don’t hide from the truth. There may be some errors on your credit report that you’ll want to correct by contacting merchants. And if you do make progress toward paying down your balances, you’ll want to make sure they’re correctly reported.
You’re entitled to a free copy of your credit report if you’ve been turned down for a loan or a credit card. And there are many Web sites that offer a report for under $10 -- or even for free, if you sign up for a credit monitoring service that you might not need.
Your credit score is a different, more complex evaluation of your creditworthiness. Your credit score doesn’t just report your payment history; it uses a formula that assigns a weigh to factors such as bill repayment habits, percent of available credit used, and even your employment history. This credit score is used in almost every mortgage decision, and may be used in one form or another when pricing life or homeowner's insurance or car loans.
The most frequently used version of the credit score is the FICO score created by Fair Isaac & Co., the company that pioneered the concept of scoring. A FICO score ranges between 300 and 850. About 39% of the population scores above 750 -- and a score below that level is a warning signal.
Some aspects of your credit report are beyond your immediate control. They’re calculations based on the length of time you’ve had the same accounts open. But other factors in your credit score that weigh heavily are your timely bill-paying habits and the percentage of your credit limit that you are using on each card.
You can get a copy of your Equifax credit report and your FICO score at myFICO.com or you can click here on MSN Money. The cost is $12.95 -- and it includes online access so you can track any changes in your credit report.
And by 2005 you should be able to get credit reports for free. The Fair and Accurate Credit Transactions Act, signed into law by Congress in Dec. 2003, gives every American the right to a free credit report every year from each of the three major credit bureaus: Equifax, Experian and TransUnion. But it will take a while for the government to write the exact regulations for the freebies and more months for the companies to comply.
Step No. 5: Make a spending plan. Now’s the time to change your free-spending ways. To do that, track the money that’s coming in and going out. Fortunately, there are easy ways to do that. One thing worth spending money on is personal finance software such as Microsoft Money and Quicken. Both programs let you track all your check writing by category and make monthly comparisons of your actual spending to the amount you’ve budgeted.
Use a debit card instead of your credit card. Then, when you download your bank transactions into your Quicken or Money program, all of your debit transactions will be included, and can be easily categorized. (If you’re not paying bills online, you’ll need to keep the receipts and enter them into your checkbook and your budget plan.) Your bank ATM card is a debit card if it carries the Visa or MasterCard logo. You won’t earn points for your purchases, but you won’t run up bills that have to be paid at the end of the month. You can only use the card if you have money in your account!
Step No. 6: Be careful about the equity in your home. In the past few years, Americans have withdrawn billions of dollars worth of equity in their homes. The ads and commercials are tempting, because the rates on home equity loans are typically lower than the rates charged on outstanding credit card balances. And the interest on a home equity loan may be deductible.
But there are dangers in home equity loans. Frequently, the money is used to pay down credit cards, which are then charged up again. The banking industry has a term for it: reloading.
Be very careful about digging into this last reserve. Yes, home values have been rising 5% to 6% a year in recent years, according to data from the National Association of Realtors. But there’s no guarantee that home prices will continue to rise at the current pace. And if you have future problems that require cash, you’ll have no place to turn. Instead, you’re putting your house on the line.
Step No. 7: Get help. Sometimes credit problems are easily attacked once you’ve faced up to them. But for some people, the problem of overspending is a psychological one. Spending can become a habit that’s as difficult to kick as alcohol, drugs or gambling. And then there are those who are over their head in debt because of circumstances they truly could not avoid: medical bills or divorce or loss of a job.
In those cases, it’s wise to seek help from professionals. The only problem is that there are so many advertisements for “credit counseling” that you can’t be sure whether they’re rip-offs. I’d suggest you stick with one of the national, non-profit credit counseling services such as Consumer Credit Counseling Services.
Many people are afraid that just one visit will be reported to the credit bureaus and make their problems even worse. That’s not the case. You can talk with a credit counselor on a private basis. Only if you enter their debt repayment program, where they contact your creditors and arrange for lower payments or interest rates, does this relationship appear on your credit report.
Another excellent source of advice and assistance is Myvesta, formerly Debt Counselors of America, a nonprofit financial crisis center. (See link at left.) Myvesta offers individualized counseling, a debt management service, advice on avoiding bankruptcy and foreclosure, and even counseling for families buried in debt. This is another source you can trust completely. Of course, all the counseling and advice in the world is useless without your own personal determination to deal with your debt.
The bottom line
If you’ve taken these seven steps, you should be able to work your way out of debt and toward a brighter future. It will take time and lots of self-discipline. It’s worth the effort.
Complaints about excessive interest charged by NBFCs
Date: May 24, 2007
Complaints about excessive interest charged by NBFCs
RBI/2006-2007/414
DNBS.PD/ CC.No. 95 /03.05.002 /2006-07
May 24, 2007
To,
All Non-Banking Financial Companies (NBFCs)
Including Residuary Non- Banking Companies (RNBCs)
Dear Sir,
Complaints about excessive interest charged by NBFCs
Complaints about excessive interest charged by NBFCs
RBI/2006-2007/414
DNBS.PD/ CC.No. 95 /03.05.002 /2006-07
May 24, 2007
To,
All Non-Banking Financial Companies (NBFCs)
Including Residuary Non- Banking Companies (RNBCs)
Dear Sir,
Complaints about excessive interest charged by NBFCs
- The Reserve Bank has been receiving several complaints regarding levying of excessive interest and charges on certain loans and advances by NBFCs.
- Though interest rates are not regulated by the Bank, rates of interest beyond a certain level may be seen to be excessive and can neither be sustainable nor be conforming to normal financial practice.
- Boards of NBFCs are, therefore, advised to lay out appropriate internal principles and procedures in determining interest rates and processing and other charges.
- In this regard the guidelines indicated in the Fair Practices Code about transparency in respect of terms and conditions of the loans may be kept in view.
- NBFCs may confirm having put in place appropriate systems in this regard within a period of one month from the date of this circular to the Regional Office of this Department in whose jurisdiction they are registered.
Yours faithfully
(P Krishnamurthy)
Chief General Manager In-Charge
(P Krishnamurthy)
Chief General Manager In-Charge
The Millionaire Next Door
"The Millionaire Next Door" is the title of a best-selling book published around 1990. The book was the result of research on how everyday people became wealthy. The book outlined the habits of self-made millionaires (those with a net worth of at least $10 million).
The book revealed the fact that self-made millionaires are frugal and tend to live simple lives. Contrary to the way they are portrayed in the media, the typical millionaire is not a doctor or lawyer; he is a self-employed person who works at least 60 hours a week in his own small business. He might run a very unglamorous business, such as an automobile junkyard. He also drives a six-year old vehicle (the most popular, a Ford pick-up); does not accumulate debt; shops for bargains; lives in a home well below his means (upper middle class); and invests his money in mutual funds and other types of relatively safe investments and watches it grow over time.
The typical millionaire is not interested in "keeping up with the Jones'." They don't have 100 pairs of shoes or a late model, expensive car. They don't buy designer clothes or spend $100 for a haircut. His neighbors and friends would never guess he was a millionaire unless he told them.
Most importantly, the typical millionaire develops a budget and financial plan and sticks to it religiously.
If you want to have real wealth instead of the appearance of wealth, stop spending your money on things designed to impress other people, and adopt the habits and values of those who are truly rich.
Develop a realistic budget and stick to it. Your ultimate goal is to start saving as much money as you possibly can and investing it wisely. Over time, you will get out of debt and start building real wealth.
The book revealed the fact that self-made millionaires are frugal and tend to live simple lives. Contrary to the way they are portrayed in the media, the typical millionaire is not a doctor or lawyer; he is a self-employed person who works at least 60 hours a week in his own small business. He might run a very unglamorous business, such as an automobile junkyard. He also drives a six-year old vehicle (the most popular, a Ford pick-up); does not accumulate debt; shops for bargains; lives in a home well below his means (upper middle class); and invests his money in mutual funds and other types of relatively safe investments and watches it grow over time.
The typical millionaire is not interested in "keeping up with the Jones'." They don't have 100 pairs of shoes or a late model, expensive car. They don't buy designer clothes or spend $100 for a haircut. His neighbors and friends would never guess he was a millionaire unless he told them.
Most importantly, the typical millionaire develops a budget and financial plan and sticks to it religiously.
If you want to have real wealth instead of the appearance of wealth, stop spending your money on things designed to impress other people, and adopt the habits and values of those who are truly rich.
Develop a realistic budget and stick to it. Your ultimate goal is to start saving as much money as you possibly can and investing it wisely. Over time, you will get out of debt and start building real wealth.
When you go over the limit
Banks world over are involved in looting. Here is an example from the US as how banks charge exorbitant fees when you get late in making payments to them.
When you go over the limit
By Bankrate.com
Q. What happens when I charge my credit card over the limit?
You will be socked with a hefty penalty fee. Over-the-limit fees of $25 and $29 are common.
Norm Tapper, a Bankrate.com reader in Indiana, was charged a $25 late fee and $25 over-the-limit fee on a Capital One card with a $300 limit.
Issuers point out that fees are spelled out in the credit-card agreement and monthly statements list credit limit, balance information and due dates. But a lot of people are shocked by over-the-limit fees. In fact, most people learn about a card's over-the-limit penalty after they get charged one.
Credit card issuers have two basic choices when a customer makes a purchase that exceeds a credit limit. They can decline the transaction or approve the transaction and charge a fee.
A third option, approve the transaction and automatically lift the credit line, is reserved for the best customers.
Today's issuers are adept at targeting card offers to a customer's specific credit profile and that includes the handling of over-the-limit charges. Issuers decide what customers can go over credit limits and by how much. The last thing an issuer wants to do is decline a card purchase.
So it looks like issuers will continue to charge bigger and bigger fees to customers who outgrow their credit limits. Don't let it happen to you. Here's how:
1. Monitor spending closely.
Keep track of credit card purchases and stay well within your limit. Leave a big enough cushion on your card for large, unexpected expenses. Some consumer experts recommend keeping one credit card cleared for emergencies.
2. Sign up for free e-mail alerts.
Some issuers send e-mail reminders to customers who are nearing credit limits.
3. Make the limit your limit.
Card holders at Capital One can request that any limit-busting purchase be declined at the point-of-sale. However, most companies refuse to provide this service.
4. Call ahead and get that limit raised.
If you know you're going to go over a credit limit with a purchase, call ahead and request a line increase. Issuers grant increases on a case-by-case basis. It's a worth a shot and it could save you $30.
5. Check out cards from local banks and credit unions.
Penalty fees are much lower, typically $5 to $15, and smaller institutions are much more lenient when it comes to charging them. For example, at Suncoast Schools Federal Credit Union in Tampa, Fla., the $15 over-the-limit fee is not imposed until you exceed the credit line by 8 percent.
When you go over the limit
By Bankrate.com
Q. What happens when I charge my credit card over the limit?
You will be socked with a hefty penalty fee. Over-the-limit fees of $25 and $29 are common.
Norm Tapper, a Bankrate.com reader in Indiana, was charged a $25 late fee and $25 over-the-limit fee on a Capital One card with a $300 limit.
Issuers point out that fees are spelled out in the credit-card agreement and monthly statements list credit limit, balance information and due dates. But a lot of people are shocked by over-the-limit fees. In fact, most people learn about a card's over-the-limit penalty after they get charged one.
Credit card issuers have two basic choices when a customer makes a purchase that exceeds a credit limit. They can decline the transaction or approve the transaction and charge a fee.
A third option, approve the transaction and automatically lift the credit line, is reserved for the best customers.
Today's issuers are adept at targeting card offers to a customer's specific credit profile and that includes the handling of over-the-limit charges. Issuers decide what customers can go over credit limits and by how much. The last thing an issuer wants to do is decline a card purchase.
So it looks like issuers will continue to charge bigger and bigger fees to customers who outgrow their credit limits. Don't let it happen to you. Here's how:
1. Monitor spending closely.
Keep track of credit card purchases and stay well within your limit. Leave a big enough cushion on your card for large, unexpected expenses. Some consumer experts recommend keeping one credit card cleared for emergencies.
2. Sign up for free e-mail alerts.
Some issuers send e-mail reminders to customers who are nearing credit limits.
3. Make the limit your limit.
Card holders at Capital One can request that any limit-busting purchase be declined at the point-of-sale. However, most companies refuse to provide this service.
4. Call ahead and get that limit raised.
If you know you're going to go over a credit limit with a purchase, call ahead and request a line increase. Issuers grant increases on a case-by-case basis. It's a worth a shot and it could save you $30.
5. Check out cards from local banks and credit unions.
Penalty fees are much lower, typically $5 to $15, and smaller institutions are much more lenient when it comes to charging them. For example, at Suncoast Schools Federal Credit Union in Tampa, Fla., the $15 over-the-limit fee is not imposed until you exceed the credit line by 8 percent.
Letter to Finance Minister Written in February 2005... but no action as yet...
9th February 2005.
Mr. P. Chidambaram,
The Honable Minister of Finance,
Government of India,
Ministry of Finance,
New Delhi.
Respected Sir,
On behalf of the members of our association, I wish to place before you compelling evidence that will prove beyond doubt the day light robbery being committed by foreign banks or their associate companies in their credit card business.
1. Included with this letter is audio-video evidence of abusive practices adopted by credit card issuing banks. The problem has been independently investigated by the media and they have found enough evidence to suggest that these companies are adopting aggressive and misleading marketing practices followed by illegal recovery methods. Please find time to go through the enclosed video footage which will demonstrate beyond doubt the high handed and criminal methods adopted by these companies. This is included as exhibit ‘A’ for your ready reference.
2. There is a complete lack of any law that allows monitoring the activities of these companies. The activities of these companies affect more than 1.5 Crore Indians and surprisingly, there is no law or guideline available to them for conduct of their business. I have included for your perusal a copy of law enacted in US for the express purpose of preventing credit card companies and other credit recovery agencies from adopting illegal means for recovery of outstanding dues. The law has not only been implemented but is being complied with by these very same companies. The US DoJ has prosecuted companies violating the law. The act and the judgements are enclosed as exhibit ‘B’ and ‘C’ respectively.
3. Please also find time to go through a petition filed by US PRIG (Public Rights Interest Group) in the US against these companies where it has been made clear that these companies follow a method of ‘negative amortization’ that is any outstanding due actually grows bigger if the customer follows the regimen of minimum payment as demanded by the credit card issuing companies. The same is included as exhibit ‘D’ for your ready reference. We have carried out a similar calculation exercise which is marked exhibit ‘E’ which clearly shows that the banks adopt the very same practice here in India too.
4. There also exists enough evidence suggesting that these companies discriminate against the borrower on the basis caste, creed, religion and profession. For example credit cards are denied to Muslims, Lawyers, Politicians, people residing in a particular geographic location and no reasons are ever given for such a denial. These companies are thus indulging in the practice of racial and selective discrimination and therefore should be prosecuted under relevant laws of the land.
5. These exists a law in US called the ‘Equal Credit Opportunity Act’. All these companies adhere to and operate under this law which specifically bars them from discriminating against any person on the basis of caste, creed, color, etc. A copy of the law is enclosed as exhibit ‘F’ for your ready reference. I request that a similar law be enacted to provide all Indians with a fair chance at credit. It is worthy to note that these same banks will never refuse to accept money or open an account or accept deposits on the basis of the same factors that they refuse to lend credit!
6. In the city of Mumbai alone, there are more than 60 to 70 Lac credit cards. The use of a credit card allows a person to have access to an unsecured line of credit. In the guise of providing an unsecured line of credit these credit card companies are flouting and violating all rules and imposing heavy rate of interest on its card members. This rate of interest is around 3% per month and is compounded monthly resulting in a total interest rate in excess of 60% per annum. This is day light robbery and this industry is working without any check or regulation.
7. In case of default of payment of dues, these companies are employing the services of recovery agencies which are totally unregulated. In the matter of recovery of outstanding amounts, these banks threaten the customer under IPC 420 and often take the help of local police in the matter of recovering their monies. As far as my knowledge goes, non-return of borrowed money results in a civil liability and enough remedial measures are available in the law and courts of law allowing for recovery of any outstanding dues. I am enclosing as exhibit ‘G’ a telegram issued to one of our members which clearly demonstrates the interpretation of the law by the credit card issuing bank.
8. Inadvertently the police ends up hauling the credit card holder whereas actually they should be telling the bank to approach the court of law and get the necessary order before taking any action.
9. Also included for your ready perusal is reference material as to how the whole system works and how these companies have adopted the very same predatory methods of cheating the customers worldwide. All this relevant material is enclosed as exhibit ‘F’ for your ready reference.
therefore have the following request to make to you
1. A Parliamentary Commission of Enquiry be immediately setup to investigate all the malpractices being carried out by these banks and credit card issuing companies.
2. Laws on the line of ‘Fair Debt Collection Practices Act’, ‘Equal Credit Opportunity Act’ and any similar law be enacted forthwith to prevent exploitation of the Indian middle class.
3. Clear directions be given to all States of the Union regarding the role of police in all such disputes.
4. Immediate direction to the Governor of Reserve Bank of India to carry out a complete investigation into the affairs of these companies and immediate framing or relevant laws to prevent financial exploitation of the common man.
I assure you of my association complete and unfailing support in taming this wild tiger that is ripping the heart and soul of the middle class of the country.
Thanking you,
Yours Sincerely,
Vijay Kamble
President
Mr. P. Chidambaram,
The Honable Minister of Finance,
Government of India,
Ministry of Finance,
New Delhi.
Respected Sir,
On behalf of the members of our association, I wish to place before you compelling evidence that will prove beyond doubt the day light robbery being committed by foreign banks or their associate companies in their credit card business.
1. Included with this letter is audio-video evidence of abusive practices adopted by credit card issuing banks. The problem has been independently investigated by the media and they have found enough evidence to suggest that these companies are adopting aggressive and misleading marketing practices followed by illegal recovery methods. Please find time to go through the enclosed video footage which will demonstrate beyond doubt the high handed and criminal methods adopted by these companies. This is included as exhibit ‘A’ for your ready reference.
2. There is a complete lack of any law that allows monitoring the activities of these companies. The activities of these companies affect more than 1.5 Crore Indians and surprisingly, there is no law or guideline available to them for conduct of their business. I have included for your perusal a copy of law enacted in US for the express purpose of preventing credit card companies and other credit recovery agencies from adopting illegal means for recovery of outstanding dues. The law has not only been implemented but is being complied with by these very same companies. The US DoJ has prosecuted companies violating the law. The act and the judgements are enclosed as exhibit ‘B’ and ‘C’ respectively.
3. Please also find time to go through a petition filed by US PRIG (Public Rights Interest Group) in the US against these companies where it has been made clear that these companies follow a method of ‘negative amortization’ that is any outstanding due actually grows bigger if the customer follows the regimen of minimum payment as demanded by the credit card issuing companies. The same is included as exhibit ‘D’ for your ready reference. We have carried out a similar calculation exercise which is marked exhibit ‘E’ which clearly shows that the banks adopt the very same practice here in India too.
4. There also exists enough evidence suggesting that these companies discriminate against the borrower on the basis caste, creed, religion and profession. For example credit cards are denied to Muslims, Lawyers, Politicians, people residing in a particular geographic location and no reasons are ever given for such a denial. These companies are thus indulging in the practice of racial and selective discrimination and therefore should be prosecuted under relevant laws of the land.
5. These exists a law in US called the ‘Equal Credit Opportunity Act’. All these companies adhere to and operate under this law which specifically bars them from discriminating against any person on the basis of caste, creed, color, etc. A copy of the law is enclosed as exhibit ‘F’ for your ready reference. I request that a similar law be enacted to provide all Indians with a fair chance at credit. It is worthy to note that these same banks will never refuse to accept money or open an account or accept deposits on the basis of the same factors that they refuse to lend credit!
6. In the city of Mumbai alone, there are more than 60 to 70 Lac credit cards. The use of a credit card allows a person to have access to an unsecured line of credit. In the guise of providing an unsecured line of credit these credit card companies are flouting and violating all rules and imposing heavy rate of interest on its card members. This rate of interest is around 3% per month and is compounded monthly resulting in a total interest rate in excess of 60% per annum. This is day light robbery and this industry is working without any check or regulation.
7. In case of default of payment of dues, these companies are employing the services of recovery agencies which are totally unregulated. In the matter of recovery of outstanding amounts, these banks threaten the customer under IPC 420 and often take the help of local police in the matter of recovering their monies. As far as my knowledge goes, non-return of borrowed money results in a civil liability and enough remedial measures are available in the law and courts of law allowing for recovery of any outstanding dues. I am enclosing as exhibit ‘G’ a telegram issued to one of our members which clearly demonstrates the interpretation of the law by the credit card issuing bank.
8. Inadvertently the police ends up hauling the credit card holder whereas actually they should be telling the bank to approach the court of law and get the necessary order before taking any action.
9. Also included for your ready perusal is reference material as to how the whole system works and how these companies have adopted the very same predatory methods of cheating the customers worldwide. All this relevant material is enclosed as exhibit ‘F’ for your ready reference.
therefore have the following request to make to you
1. A Parliamentary Commission of Enquiry be immediately setup to investigate all the malpractices being carried out by these banks and credit card issuing companies.
2. Laws on the line of ‘Fair Debt Collection Practices Act’, ‘Equal Credit Opportunity Act’ and any similar law be enacted forthwith to prevent exploitation of the Indian middle class.
3. Clear directions be given to all States of the Union regarding the role of police in all such disputes.
4. Immediate direction to the Governor of Reserve Bank of India to carry out a complete investigation into the affairs of these companies and immediate framing or relevant laws to prevent financial exploitation of the common man.
I assure you of my association complete and unfailing support in taming this wild tiger that is ripping the heart and soul of the middle class of the country.
Thanking you,
Yours Sincerely,
Vijay Kamble
President
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