Are you a credit card defaulter?

Have you ever been blacklisted by a bank for not paying your credit card dues? Do you know how to clear your name from this list? Do you know the consequences of being blacklisted?

Is the banking ombudsman genuinely of any help to credit card customers? Do they take up your problem with the respective banks?

Do you know your responsibilities as a credit card customer?

Part I -- Credit card problems? Here's help

kundan asked,  Dear Mr Roongta, this happened two years ago: I dropped a cheque in the Bangalore branch of my bank but the bank misplaced the same and it went to Chennai and hence they charged me penalty against delayed payments. In spite of lawyer notices, I refused to pay stating that it was the bank that was at fault. The bank had hot listed (black listed) my name. I came to know about this hot list as two banks declined fresh credit cards. How to get my name removed from this hot lists. I have a very good credit rating with four other credit cards (Citi, SCB ,HDFC etc). How does this hot list affect me?

Harsh Roongta answers, I suggest that you take this extremely seriously, since hotlisting in the credit bureau will affect your chances of getting any loan in the future. File a complaint with the banking ombudsman (http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=159) and insist on getting an official letter declaring you as a non-defaulter in this case.

palani_d asked, Hi I hold a credit card from HSBC. I am regularly paying my outstandings before due date. One month when I had to go away to my hometown, I presented a cheque which dated as 27th February whereas my due date was 28th February. I dropped this cheque by 24th February itself as I was going away. But HSBC did deposit the cheque on 23rd itself and bank returned cheque saying post-dated with a penalty of Rs 100...again these HSBC guys charged me Rs 350 + service tax for postpaid cheque. Later on my insistence they waived off all the charges but I was made to pay Rs 100 to the bank for post dated cheque...My question is why are they presenting the cheque without waiting for 2-3 days when my due date was on the 28th?

Harsh Roongta answers, I think as consumers we should also have realistic expectations of what the bank can deliver. Almost all banks provide bold display print on their bills to not put post-dated cheques in the collection boxes. Obviously given the volumes it is not possible for the banks to segregate current cheques from post-dated cheques. One suggestion would be to provide standing instructions for debiting a specific bank account on due date. Most credit cards provide this facility.

vamsi asked, May I know what's the profit the bank is going to make by issuing credit cards if the customers are paying the outstandings regularly with out any delay?

Harsh Roongta answers, Not too much. They make a small commission on the amounts spent by you at merchant establishments where you use the cards. Also there is income by way of fees, charges and interest should you happen to delay any payment.

Kamaal asked, I have taken a BT (balance transfer) scheme of SBI favouring Citibank but the cheque issued got returned without clearing. Now SBI maintains the cheque is cleared whereas Citibank maintains the cheque has been returned. But I have been charged for the amount so what options do I have as a customer?

Harsh Roongta answers, If you have deposited the cheque with Citibank, then the cheque should have come back to you. If not, clearly Citibank is responsible for proving that the cheque has bounced. If the physical copy of the cheque has indeed come back to you, then the problem lies with SBI.

In either case, file a complaint with the concerned card issuer and if not addressed to your satisfaction in 2-3 weeks you should approach the banking ombudsman (http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=159). For the SBI card, you will have to file a general compliant on the RBI website as it is a non-banking finance company, NBFC, and is not covered by the banking ombudsman.

veekay asked, Is the RBI Banking Ombudsman known to genuinely help customers by taking up their issues with the banks?

Harsh Roongta answers, It is a statutory body which can and does give directions which are binding on Indian banks. Please read the decisions given by them in the recent past. It is a very effective remedy. Just the mention of going to the ombudsman galvanises the banks and, in most cases, the queries are resolved at the bank level itself. Unfortunately, the banking ombudsman scheme does not cover NBFCs like SBI cards.

anushree asked, Dear Sir, I had a credit card and used it to the maximum limit. I was paying all my dues fine and on time. But one fine day I felt that the bank has earned enough because of me and stopped paying. After a period of time, the bank barred the payment facility from my card as I was overdue.

Now after about two years the bank is still sending me statements despite me telling them to cancel my card and today the late payment fee and the interest has multiplied many times and the amount due is more than Rs 4 lakhs. Tell me if the bank will pull me to courts? What if I am not in india or if I change my residence which the bank will never know. Please advice me as to how I should save my head?

Harsh Roongta answers, I would advise you to settle up with your bank. Your sins of non-payment will follow you in this digital age where you can and will be traced no matter what you do.

rohitb asked, I had closed a Stanchart card in 1996 after making a full and final settlement due to a fraudulent and disputed charge on my card. Since this was settled Stanchart has still listed me as a defaulter how can I get my name cleared from the defaulters' list?

Harsh Roongta answers, If the charges were indeed disputed and you have proof of that dispute, then I suggest you approach a good lawyer specialising in tort to take up your case.

koushik asked, Hi Harsh...this is Koushik here. What is a Credit Bureau? Does it track everybody or only those who default on their loan payments? How is the tracking done (e.g PAN) etc?

Harsh Roongta answers, Credit Bureau is the banking equivalent of Orwells Big Brother which keeps track of all your repayments -- good or bad. Several things are used to match up records including PAN, date of birth, name variations, etc.

Swarup asked, How do I protect myself from credit card payment recovery if my friend had spent on my card and willing to accept it on paper. Is it possible to have legal paperwork and ask the bank to chase the friend if he defaults in future? And what is the procedure for recovery?

Harsh Roongta answers, You are responsible for your credit card. The bank can and will seek recourse to you. Whether you recover the money from your friend or not is your outlook only. Credit cards require responsible handling and this lapse will probably make you more careful in the future about allowing other people to use your credit card.

Chandra asked, I don't have any outstandings on my credit card. I want to close the card during its validity period. How to go about it?

Harsh Roongta answers, Cut your card into 4 pieces and send it under acknowledgement due post to the address given in the billing statement.

venkat asked, Hello Sir, my credit card number and pin number was taken by one of my staff and he lost the details. Can they do online purchasing or payments through my credit card? What shall I do now? I have tried reaching the bank but they are not responding.. they asked me to send a hard copy to the bank requesting the same.. but in the meantime if somebody uses my card it will be a huge loss for me.. how to go about on this?

Harsh Roongta answers, Immediately call up the bank and report it as a lost card so that they can hotlist the card. Take an acknowledgment number for your hotlisting request so that your liability ceases from that time onwards. Most banks will however charge you a card replacement fee for issuing a new card.

Aliasgar asked, Could a bank use abusive language for recovering their dues?

Harsh Roongta answers, As per voluntarily adopted guidelines by the banking industry, this cannot be done.

Harsh Roongta says, Ok folks. It was great chatting with you. See you next time. For any queries please read this transcript or logon to www.apnaloan.com

Harsh Roongta is the CEO of apnaloan.com, a site that help people get the most competitive loans.