Should cardholders pay before filing a complaint?

Many may have got a wrong bill for their credit card. What do you do in such case? Pay the bill? Or, take it up with the company?

The Banking Ombudsman suggests you first pay the bill, even if disputed, before filing a complaint with the card provider.

Reason: This will protect you from the risk of paying more on the back of late payment, in case the decision is in favour of the card provider. In case, the case falls in your favour the excess money can be refunded to you.

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You would certainly ask why? Reasons a senior official at the Indian Banks' Association (IBA), "This is not an exceptional suggestion. In case of an income tax notice, you have to pay the dues before filing an appeal. In case of an order from the Debt Recovery Tribunal, you are required to pay two-thirds of the debt before knocking on the Appellate Tribunal's door."

While the card provider may not refuse to entertain your complaint if you've not paid the dues before that, some feel it is unfair to ask a consumer to pay up when he hasn't spent the money.

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Says V N Kulkarni, counsellor at Bank of India's Abhay Debt Counseling, "It appears the Banking Ombudsman has presumed the case may go against a consumer. If a credit card holder is absolutely confident that it is a wrong bill, there is no question of paying the amount first and then filing a complaint. It may take quite some time to get back the money and in all probability, without any interest." Refund, if any, is only adjusted with the next billing cycle.

Some bankers agree with Kulkarni that at times, cardholders are not at fault and are still asked to pay hefty amounts. Even if the case is not in favour of the consumer and is just a confusion, bankers say, cardholders should first check with the card provider before paying.

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The Ombudsman suggests likewise for those who rotate their card payments, as well. If you do not agree with the bill sent to you, ask the card company for details such as details of the transaction, charge slip and so on, they suggest.

Consumer activist Jehangir Gai feels if such norms are brought in, it would make sense to directly approach the consumer courts.

Agreed there are built-in checks for credit card transactions such as card holder's photograph on the card, mobile alert for each transaction, online transactions being permitted with CVV number and another password and many more.

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However, there are mishaps as there are some cases where in mobile alerts are not received. Heads of card companies heads point out that in case of a disputed transaction, point out immediately.

Says Kadambi Narahari, chief executive officer of SBI Cards, "Each transaction is sent back to the card holder in the form of a text message or e-mail alert. Ideally, point out there and then in case of a disputed transaction. Don't wait till the bill is generated. If there was nothing wrong in the alerts sent, there can't be a sudden change in the bill generated."

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Agrees the IBA official that a record is sent by a merchant, if the card is used. If not, then it must have been lost. Then, the card holder should be able to show a loss of card report he/she had filed.

Or, your card may have been cloned. In that case, you have to prove that you were not there at the merchant establishment when the card was used for the matter to be settled.

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But if you've adhered to none of the above, then you should pay the bill first, as filing a dispute complaint is always an option.

Instead of asking card holders to pay first, experts say, the grievance redressal machinery needs to be streamlined and the entire process should be completed in 30 days in which case there will not be huge liability as is made out.