The South Mumbai District Commission holds IndusInd Bank accountable for failing to disclose the terms of a secondary credit card

The District Consumer Disputes Redressal Commission in South Mumbai, Maharashtra, comprising P.G. Kadu (President), S. A. Petkar (Member), and G. M. Kapse (Member), found IndusInd Bank liable for inadequate service for not disclosing the terms of holding a secondary credit card and failing to clarify why it was ineligible for EMI payments.

Summary of Events:

The complainant bought an iPhone SE 16 GB Space Gray for Rs. 38,000/- as a gift for his son-in-law. The retailer, Unistore (“Dealer”), offered an EMI option of Rs. 1842.49/- per month for 24 months, along with a guaranteed cashback of Rs. 6400/-. Based on this offer, the complainant used his credit card issued by IndusInd Bank (“Bank”) for the purchase.

Despite making regular EMI payments, the outstanding balance did not decrease as expected. The Bank clarified that this amount comprised solely of interest on the credit utilized. Additionally, the Complainant was informed belatedly that his credit card did not qualify for the EMI facility, a detail not disclosed at the time of purchase. To prevent accruing further interest charges, the Complainant eventually settled the amount at Rs. 38,855/-.

Upon writing to the Bank seeking interest waiver, the Complainant received an email from the Dealer stating that the Bank had declined the transaction due to the involvement of a secondary credit card. Alleging unfair trade practices and deficient service by both the Bank and the Dealer, the Complainant felt aggrieved and subsequently lodged a consumer complaint with the District Consumer Disputes Redressal Commission in South Mumbai, Maharashtra (“District Commission”).

The Bank referred to its statements, showing a minimum payment due of Rs. 1899.87/- with a deadline of 01/11/2016. It contended that the Complainant had only paid the minimum amount due, not the entire outstanding balance, resulting in the balance being carried over with additional interest and charges applied as per credit card regulations. These charges appeared in subsequent statements, which the Complainant continued to pay minimally. The Bank argued that due to insufficient information on EMI terms from Unicorn, it continued issuing statements based on the total purchase amount. The Complainant’s request for an interest waiver was denied because of consistent partial payments of the minimum amount due instead of the full outstanding balance.

Findings of the District Commission:

The District Commission observed that the Bank offered conflicting explanations for rejecting the transaction. Initially, it stated a lack of information about the EMI transaction, but later cited the use of a secondary card as the reason. It noted that the Bank did not provide the terms and conditions concerning secondary credit cards or clarify why such cards could not be used for purchases and EMI payments. The Complainant had informed the Bank about the EMI purchase via email. Consequently, the District Commission concluded that the Bank’s failure to provide clear explanations and supporting evidence raised doubts regarding the validity of its grounds for rejecting the transaction.

“Having informed the Bank about the EMI purchase, the District Commission ruled that it was the Bank’s responsibility to process the transaction accordingly and convert it into an EMI plan. However, the Bank failed to do so and continued to levy interest, amounting to INR 8,638/-. This was deemed an unfair practice and a service deficiency by the Bank.

Consequently, the District Commission ordered the Bank to reimburse INR 8,638/- to the Complainant, along with 9% interest. Additionally, considering the mental and physical distress suffered by the Complainant and the loss of trust in using the credit card for future transactions, the Bank was directed to pay INR 5,000/- as compensation for mental anguish and INR 5,000/- as litigation costs incurred by the Complainant.

Case Title: Mr Abdul Rashid Momin vs IndusInd Bank and Another

Case Number: 84/2017

Date of Order: June 12, 2024″

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