Ok, so its no news to people that most banks in India are pathetic to customers. I think I am going to see some of that first hand. I woke one October morning seeing an abnormally high balance on my Standard Chartered India credit card. I was here sitting in the US so wondered why the large balance, I sent out a mail, soon there was a charge on my statement which I didn’t recognize. The charge was in Navi Mumbai, a city I have not visited for more than 5 years I think. So I call up Standard Chartered bank in India, went through their ancient and archaic phone banking system, and somehow managed to reach someone on phonebanking.

Suspiciously, I got disconnected twice on telling them about the dispute. Third time was a charm, I was told my card is blocked and I was told to send across a dispute form to them. I was also told I would get a temporary credit to my account. Awesome ! , yeah right, they are just complying with the law here. Note that I reported the fraud as soon as I could humanly, I didn’t get an alert on the transaction on my phone and even before the transaction had posted to my account, I had filed a dispute. I had my phone from India here and didn’t receive a call or SMS regarding the transaction worth half my credit limit in a city thousands of kilometers away from where I stay. so much for Standard Chartered’s automatic fraud detection. If I ever interview someone who has worked for them, I will ask about their algos or lack of algos to detect fraud.

Here is where things do downhill however, they are doing the above just to comply with the law, the real shrewdness of the bank comes in now. This is the dispute process outlined by the bank in a response to my netbanking message :

1) With regard to Dispute:

We are in receipt of the Dispute Declaration Form and have forwarded the same to the concerned department to investigate the disputed transactions.

We inform you that, we had provided temporary credit to your card account for the disputed transaction and the same will reflect in your next statement.   
As the process involves the concerned Merchant Establishment, his Banker and us, we will need a minimum of 45-50 days to complete the investigation. Formal correspondence will be sent to you with regard to the outcome of investigation.

We request you to contact us after 14 November 2015 to update with you the dispute status.

2) With regard to Dispute payment process:

Please note that you have the following two options regarding the repayment towards your account while the disputed charge is being investigated at our end.

a) You can pay the total outstanding (including the amount disputed), to ensure no financial charges are billed to your card account in the subsequent statements, while the investigations are in progress.

b) You have the option of paying the outstanding in your account less the transaction disputed by you. Your subsequent statements will incur financial charges due to short payment towards your outstanding amount.

Upon completion of the investigation at our end;

1) If we find that you have incurred the charges based on the supporting documents, the amount would be debited to your card account and you would be liable to pay the same, along with the financial charges accrued.

2) If we find that you have not incurred the charges (in the absence of any supporting documents provided to us by the Merchant), the permanent credit will be provided to your card account.

If the dispute resolves in customer’s favour, the financial charges will be reversed to their card account along with the disputed transaction.

 

This is the WTF part to me. Why am I responsible for these finance charges while the dispute is being processed. What’s the point of a temporary credit, only to appease RBI gods ? And why do I need to contact them after Nov 14th ? , shouldn’t they call me and let me know, they owe it to me when I have an annual fee of Rs.999 on the card. It’s a Manhattan Platinum, their most premier card. Well obviously, the disregard for the customer is uniform. There is a nice article on RBI around credit card disputes, apparently in 2013 RBI had asked banks to install chip and pin machines and to give chip and pin cards. The lazy cheap folks at Standard Chartered bank didn’t bother to issue a chip and pin card to me to save a little money. Compare that to HDFC and Citibank who had both issued chip and pin cards to me. Quoting from the article :

Pointing out that banks were told that there would be no further extensions, the RBI said, “It has been decided not to grant any further extension of time. Accordingly, banks not complying with the requirements shall compensate loss, if any, incurred by the cardholder using card at POS terminals not adhering to the mandated standards.”

There are usually two banks in every credit card transaction. One that issued the credit card and the other that has installed the swipe machine. The RBI has said that the card issuing bank should ascertain in three days whether the fraud has taken in a non-compliant machine and within seven days refund the money to the cardholder. The card issuing bank will in turn recover the money from the bank which has installed the swipe machine.

Not sure if it was even legal as per RBI for Stan Chart to not update my card to a chip and pin one.

There is also an onus now on banks to prove the credit card owner acted fraudulently, again, good luck proving that in court :

This has resulted in banks levying late-payment penalty. The new rule is announced by the Banking Cdes and Standard Board of India (BCSBI) that works to protect customer rights. It makes banks responsible to find evidence that the customer had authorised and was responsible for the disputed transactions.

I really hope I don’t have to go to court for this since I don’t want to waste time, but seeing Stan Chart’s response (finance charges making my blood boil), this may go down south pretty soon. To be fair, they haven’t yet decided the dispute. Lets see what information the merchant presents.