If you are a frequent user of credit cards or are planning to purchase a credit card, you may face a situation where your consumer rights may be violated. Therefore, it becomes important that you are aware of the different credit card rules to protect your rights.
The Reserve Bank of India (RBI) has imposed many rules and regulations to protect the interests of credit card users. These rules protect you from cases of fraud, privacy breach, data leakage, etc. Check out six important credit card rules of RBI that are meant to protect a credit card user.
1. Interest rate
The RBI has stipulated that interest rates on credit cards should be transparent and reasonable. Banks and NBFCs should not charge exorbitant interest rates and hidden charges. Banks are required to set a ceiling on interest and other costs. However, they may charge different interest rates based on the credit card user’s payment history and must be transparent about this.
2. Accurate billing
Banks and NBFCs must ensure that credit card statements are generated on time and in a fair manner. Credit card users can request justification from issuers if they receive an incorrect bill. In such a case, the credit card company will be obliged to provide an explanation for the incorrect invoice. They may also be asked to provide supporting documents. Banks and NBFCs have been given 60 days to resolve the issue. RBI has advised issuers to provide online credit card statements to avoid delayed billing.
3. Credit card debt collection process
As per the RBI guidelines, banks and NBFCs must collect debts fairly and not compromise the quality of customer service. Even if they outsource debt collection, they must ensure that the third party does not resort to unfair practices and maintains the confidentiality of the customer’s data, respects the customer’s privacy and adheres to fair practices in collecting debts. Banks and NBFCs cannot use force, intimidation or threats while collecting debts.
4. Privacy issues
As per RBI guidelines, banks and NBFCs should not issue unsolicited cards to customers without their consent to protect privacy. If an unsolicited card is issued without authorization, the issuer will be required to reverse the action and pay a fine equal to twice the value of the reversed charge. RBI also offers similar protection for existing credit card users.
If a bank or NBFC wants to upgrade a credit card, they must first inform the user and explain the terms and conditions. They can only upgrade or increase the credit limit with a user’s consent.
According to the RBI, banks and NBFCs have to adhere to the Do Not Call Registry (DNCR). It is a contact list of credit card users who have not consented to receive marketing messages or calls from banks or NBFCs. This measure aims to protect the privacy of a credit card user.
5. Protection of Identity and Confidentiality
Protecting the identity and confidentiality of a card user is RBI’s top priority. Therefore, banks and NBFCs should not disclose any information held by users from the time of account opening or credit card issuance without obtaining specific consent from the user. Credit card issuers cannot use a user’s information for marketing purposes. Besides, banks and NBFCs can declare a card user as a defaulter by first notifying them. Once a credit card user has been notified, he/she will be given a notice period to pay their bills.
6. Report fraud
If your credit card has been used fraudulently, report it to your issuer immediately. You will not be responsible for fraud if you notify your issuer within three business days. However, you may be held liable for fraud if it is the result of your negligence or if the delay in reporting is more than seven business days, according to your bank’s approved policy.
In conclusion, RBI sets certain norms to protect the rights of a user. As a credit card user, you must be aware of the rules and regulations that protect your rights as a consumer. If any of your rights are violated, these rules are a helpful solution to address your concerns.
