On the evening of February 1, 2017, 39-year-old H Manjunath from Bengaluru received a text message from Kotak Bank Limited, stating that Rs 2,499 had been deducted from his savings account as per their special card protection plan.
Having no recollection of ever subscribing to such a plan, Manjunath eventually took the matter to a consumer court, which earlier this week ordered the bank to pay him a compensation of Rs 10,000 for “unfair trade practices”, reports The Times of India.
Before taking the case to a consumer court, Manjunath called the bank manager the following day and raised a complaint about the money that was deducted from his account without his consent.
Responding to Manjunath, the bank official said it was part of the annual fee customers pay for their ‘card protection plan’. While Manjunath did manage to get a refund from the bank after a month, he wasn’t going to let this slide.
A card protection plan (CPP) is a service many banks offer their customers as a form of insurance for all their debit cards, credit cards, and retail cards–basically for all types of plastic.
“Simply put, it is a comprehensive card protection service in case of any loss, theft, fraud and other related emergencies. Apart from credit and debit cards, banks have extended this service to safeguard the details of other important documents like PAN card, Aadhaar card and several others essential documents. In short, this service is designed to come in handy in times of a crisis situation,” says a Business Today report on the nature of these CPPs.
The benefits of such plans are standardised across all banks. Further, there are different grades of protection one can seek, provided an annual insurance premium of sorts is paid. This premium ranges from Rs 1,200 to Rs 3,000, depending on the service.
In the consumer court, the bank argued that it withdrew the sum from Manjunath’s savings bank account only after he gave his consent to their bank representative and signed up for the CPP with a fee of Rs 2,499.
However, after hearing both sides for over 18 months, the judge ruled that the bank had failed to acquire an authorisation letter from the customer before deducting the sum. Despite the initial refund, the court ordered the bank to pay Manjunath Rs 5,000 in damages (harassment and causing mental agony), plus another instalment of the same sum for court expenses within 30 days.
This isn’t the first time that banks have been caught deducting ‘fees’ for their services without the consent of the customer. For the customers too, it is imperative to take legitimate grievances to a consumer redressal forum so that banks don’t run all over them.
So if you are a bank account holder, do keep a track of all fees and deductions you are charged, and remember this case’s example, in case you are unfairly billed for a service you never signed up for.
(Edited by Shruti Singhal)