Sub. : Appeal against decision of rbi banking ombudsman in case of mis-use of sbi credit card and non payment subsequently banking ombudsman complaint no. 4971 reference – sbi credit card no. – 4006 6760 1638 5067 dear sir / Madam, I wish to bring in your kind notice that a complaint regarding sbi credit card agency had been filed by me with rbi banking ombudsman vide banking ombudsman complaint no. 971. The rbi banking ombudsman in his order dated 2011 has closed the case and issued the order to that effect. The reasons cited as observation in impugned order are neither based on full disclosure of facts and nor as per guidelines issued by rbi for acceptance of credit card transactions by the banks. Hence, the decision of rbi banking ombudsman is not acceptable to me and liable for appeal before the appellate authority I.E deputy governor of rbi as per press release no. 608, dt 007. Therefore, I wish to appeal before your goodself for sympathetic re-consideration of this case on the grounds which the rbi banking ombudsman has overlooked and ignored while deciding and making his judgment. Further, I request before your goodself to grant me a compensation of rs. 1 lakh from sbi cards for mental agony and trauma which I have been suffering for last 2 years due to ‘continuous harassment for non payment’. A) brief facts of the case : 1) the disputed transaction took place on 2009 at pushpanjali motors, nelson mandela road, new delhi for rs. 86/- Through sbi credit card no. 4006 6760 1638 067. 2) somebody with the intention of committing fraud, ‘signed the transaction slip’ in name as “umesh yadav” in hindi and merchant or his authorized person may be in collusion with this person authorized the transaction without verification of credit card holder name and signature, even it was there on the back of the card. 3) myself, as sbi credit card holder was not aware of this transaction and even not being informed either through sms or email etc., 4) on calling up at sbi customer care, I found there are two transaction dt. 10 & 12 may 009, I.E. 10th may 2009 was done by me and 12th may 2009 was not mine. 5) as there was no other alternative available at that time, but to close the card instantly. Contd.. pg.2 pg.2 6) a police fir to that effect was also lodged on dt.18th may 2009 at nearest police station. 7) after receiving monthly credit card statement, one transaction dt. 10th may 2009 was paid (as always done in past), and dispute was raised by me for second transaction dt. 12th may 009, which was made without my knowledge. 8) the matter was raised to sbi card’s fraud prevention and other deptts. Of sbi cards explaining facts of case. Lots of request letters and correspondence were also sent since then. But till date, no satisfactory reply was received from sbi. 9) almost daily ‘telephonic calls and smss with all sorts of ‘high tones and money extraction’ calls, forcing me to make payment of transaction amount were given in these two year’s time. 10) the sbi card was ‘adamant’ on treating this case at par with ‘lost card case’ and DID not accept its responsibility of signature verification of the card holder at any stage I.E, either by the merchant or charge back bank. 11) finally when nothing could result through correspondence, a formal complaint was lodged with banking ombudsman vide complaint no. 971. 12) after realising that a complaint with rbi banking ombudsman had been filed, the sbi cards in its letter dt. 2011 immediately made an offer to settle the case in rs.5000/-. 13) the offer was not acceptable to me as the transaction was done without my knowledge and I was forced to pay for a transaction whose transaction slip was never signed by me. 14) the office of the rbi banking ombudsman initially called for a meeting on dt.21.03.2011 and then re-scheduled for dt.22.03.2011 on request from sbi cards at 3.30 pm at conference hall, boi’s office, reserve bank of india, sansad marg, new delhi. 15) again, a e-mail letter was sent by sbi cards to me for settlement amount of rs. 81/- In order to avoid the meeting at rbi’ office in this case. But again, this was not acceptable to me as I wanted to highlight in front of rbi that how unfair practices are prevalent and how these credit card agencies are ‘indifferent’ about card holder’s plight and helplessness, once the card is issued to him. B) proceeding at rbi bo’s office : 1) during proceeding on dt. 2011 at rbi bo’s office, the honourable bo after giving the both parties a reasonable opportunities to represent their cases, has made following observations: I) the signature on transaction charge slip was clearly of somebody else and not of the card holder; II) whether the chargeback was raised and disputed or not and ordered for production of correspondence etc. In this regard; III) advised sbi cards to separate the principal amount in transaction from interest in total outstanding amount as on date of rs. 000/ (Approx. After levying of various finance charge) and to stick their demand to principal amount of rs. 86/- Only. 2) then suddenly on dt.31.03.2011, a email from office of bo was sent to me for closure of the case under 13(a) referring not on the grounds of complaint referred to in clause (8) or otherwise not in accordance with sub-clause (3) of clause 9 of bos,2006. 3) a detailed order dt. 2011 was handed over to me during my visit to rbi bo’s office for making appeal based on last received e mail. Contd.. pg.3 pg. 3 C) grounds of appeal in the case : the learned rbi banking ombudsman in his order has erred on the facts and guidelines issued by the rbi to the credit card agencies in the instant case and hence the impugned order is liable for appeal before your goodself on following grounds : 1) during any credit card transaction, the ‘transaction slip’ and its ‘signing’ by the credit card holder form the integral part of the transaction. The liability of a credit cardholder could arise only when he has obtained any benefit through the value of goods or services obtained and signed on transaction slip in token of his acceptance. In the instant case, the signature of the card holder – tarun k johry was not obtained with credit card holder’s consent or knowledge on the ‘transaction slip’ against goods or services to make him liable for payment of transaction (as clearly written on the space provided in transaction slip). 2) the transaction slips in the credit card business are treated at par with cheque leaves in banking services and hence only their signing can bind the account holder for payment of dues. So, if a cheque leaf is lost or stolen and then signed in a wrongful or fraudulent manner, it does not exonerate the bank from its liability towards bank account holder to make his losses good and the account holder is not responsible. In other words, the bank is fully responsible to compensate the account holder and would bear the entire loss for bank’s official’s negligence in signature verification of cheques. If bank or its officials do not verify signatures of account holders ‘for sake of their own convenience’, they themselves are taking risk of frauds and wrong payments, and not the account holders of the bank. Similarly in the instant case, sbi credit card through its paying bank or merchant was negligent for ‘convenience used in card holder’s signature verification’. 3) the space, which was meant for signature of tarun k. Johry (I.E. For card holder) on transaction slip was clearly “signed by sh. Umesh yadav” in hindi. The name of the card holder as ‘tarun k. Johry’ was printed in bold letters on front side of the card, whereas the signatures were clearly in hindi as ‘umesh yadav’ on transaction slip. It should be noted that the signatures of the card holder are not ‘forged’ in this case, but are clearly different and in hindi of some different person; it would have been easily established had the merchant or his men prima-facie with normal prudence tried to see and verified the signatures on the back of the credit card. It seems that merchant or his deputed men deliberately ignored the signatures in this case being intentional and fraudulently in collusion. 4) the vehicle no. Registration as DL a5-ar 3135 was also mentioned on the transaction slip and from that vehicle no.Registration, it could have been established who has done this fraud. But again, the sbi card DID not make any effort to trace or file police complaint as it was easier to put blame on the card holder in the ‘shield or cover of ‘lost card’. What steps have been taken to recover money from the merchant or his men, when it was beyond doubt and was accepted in case proceeding also that the signatures on transaction slip are clearly of different person and vehicle no. Was also available on the transaction slip? if money could not be recovered from merchant or authorizing or charge back bank, then does it mean that ultimately credit card holder would bear the brunt and be liable in all situations? 5) if the signatures of a bonafide /Rightful card holder are not required or has no relevance on a transaction slip of the credit card, then why credit card issuing agencies always insist on signing at the back of the card in case of a new credit card. It means that they also intent to verify the signatures by the merchants in every transaction before a payment becomes liable. So if the practice of accepting payments without signature verification has been established by the merchants for their convenience and in defiance, does it mean that then the poor customer has to suffer and pay for these malicious and unscrupulous activities. Contd.. pg.4 pg.4 has rbi also consented and authorized them for use of such practices? if yes then, are we not encouraging such frauds to happen? 6) is the founder of a lost card becomes a rightful owner and beneficiary with same privileges and offers? if not, the how that fraudulent person can bind the card holder by his deeds or acts for which he was never authorised and his act or transaction done by him was void ab-initio. And, if any transaction is void ab-initio, how can it be enforced for payment against the credit card holder? 7) it is clearly evident in this case that the sbi cards being ‘ineffective’ in taking steps to recover money from merchant, and hence is seeking ‘protection and cover’ under ‘lost card case’s clauses of card issuance agreement’. In a process to cover its losses, it is taking refuge under lost card case and referring lengthy and ambiguous terms and conditions of credit card issuance agreement. It wants to absolve itself from basic and foremost responsibility towards forcing and authorizing payment only on the basis of proper signature verification even as per card issuance agreement. 8) has rbi issued any instruction or guideline for not enforcing any signature verification on transaction slip? is it written anywhere that the signatures of a credit card holder are not required to be tallied at any point of time? the credit card agencies cannot ignore this vital fact and take advantage in their favour through ‘card issuance agreement’ even in case of a lost card. The role of rbi in preventing and curbing such kind of practices by the credit card agencies plays crucial and important in controlling and prevention of such kinds of frauds. D) relief sought in appeal : based on the above mentioned grounds of appeal, the following remedies are sought from your goodself: 1) the principal amount and/Or any other amount outstanding on account of interest, finance charges etc. As on date in the name of tarun k. Johry should be waived off and settled. (The last settlement amount offered by sbi cards was rs.1581/- Through its mail dt. 18.03.2011); 2) a compensation of rs. 1 lakh should be allowed in my favour for facing mental trauma and harassment for more than last two years from sbi credit card agency and for proving grounds for non payment in this transaction.