Two interesting cases have been reported from the consumer courts (District Consumers’ Redressal Forum) this month. The first of these, pertaining to credit cards, is of particular interest since credit cards are very widely used these days and it is good to be warned about what could happen when things go wrong.

Dinesh’s Visa Gold credit card, issued by Standard Chartered Bank, got stolen from a pouch that he had kept locked in his scooter along with other documents while he left the two-wheeler parked briefly. On discovering that the pouch was missing, he immediately tried calling the bank’s hotline but it was 40 minutes before he could get through and report the loss.

To his horror he discovered that in those 40 minutes, Rs 50,000 had been withdrawn from his account through the fraudulent use of his card. The bank produced a dispute declaration form and insisted that Dinesh should pay up the amount with interest and penalty, adding up to Rs 55,133.

Now comes the interesting part — when Dinesh pursued his complaint, the bank argued that for monies withdrawn before the request for blocking the account was received by the bank, the card holder would have to take responsibility, and that his insurance cover would become applicable only from the time the loss is reported to the bank.

Which amounts to saying that when a credit card is stolen, the holder has to ensure that the bank is informed literally within seconds (within the time it takes to withdraw money from an ATM). Since the loss was suffered by Dinesh “before the loss of the card was reported to the bank” the bank accepted no liability for the withdrawal.

Ponder over that — if your credit card is stolen, unless the person who steals it tarries and takes a while before using it to withdraw money, giving you enough time to discover the loss and also get the message to the bank, you are in big trouble.

Even if you discover the loss immediately but can’t get through on the hot line to the bank to report the theft, you are in trouble. Even if your credit limit is low, apparently.

Because, under the rules that applied to Dinesh, he was eligible for a cash advance of only Rs 9,900 (15 per cent of his Rs 66,000 limit since he had had the card for less than six months) so a withdrawal of Rs 50,000 ought not to have been facilitated.

The consumer protection group that he had engaged to assist him in fighting his case also pointed out that an ATM would not show the credit limit on its own, it is the bank officials who feed this information into the machine, so permitting a withdrawal larger than his limit amounted to negligence and deficiency of service.

The court ordered the bank to return to Dinesh Rs 45,233 — the amount they had collected from him minus the cash advance that he was eligible for because that was all that he could be held liable for. Dinesh was also awarded Rs 1,000 as costs to be paid by the bank.

A judgment from the National Commission for Consumer Complaints Redressal is also available along similar lines.
The second case, also from Gujarat, is about a new Maruti car that the complainant, Sujatha, purchased from a dealer.

The car was delivered to her but without the temporary registration number. The dealer took away the car two days later for getting the registration done, but on the way to the RTO the vehicle met with an accident and got damaged. The dealer refused to accept responsibility for this mishap, arguing that once the car was delivered, the onus was entirely on the owner, for any costs or repairs.

Having paid for a new car, along with registration and RTO charges, she refused to accept a damaged one, and complained to the district forum. Fighting her claim the dealer and manufacturer declared that her complaint could not be entertained “at all” under the Consumer Protection Act since the car had been already delivered to her and it was her responsibility to get the registration done.

The dealer argued that the car had been taken away for registration “only as a goodwill gesture”. For good measure it was also argued that the accident had in fact not been their fault (and therefore they could not be held responsible for the damage caused).

The ruling in this case said that delivering a vehicle without a temporary registration was unlawful under the Motor Vehicles Act and that the seller was clearly in the wrong. The dealer and the manufacturer (Maruti) were together ordered to pay the complainant Rs 3,94,662 that she had paid for the car.

Although the case had taken nearly two years to come to a conclusion, the court decided that no interest on that amount would be payable to the aggrieved party since she had had the use of the car during the time that it took for the case to be resolved. There are lessons in both these cases, for credit card users and buyers of vehicles.