Always keep an eye on your a/c

Have you ever thought of the possibility of your bank or credit card company charging you erroneously for something which does not pertain to you? Are you among those who do not bother checking your bank statement regularly? Do you pay your credit card bills without glancing through the expense list detailed in the statement?

If you are one of those people, then it is high time you wake up and begin checking your bank statements and credit card statements regularly.

Let’s look at a few examples which can prove really harmful to your finances if you do not check your statements on time.

Tax deduction  for gift

Raj was not in the habit of checking his credit card statements regularly and simply used to pay the dues by the due date. On a particular month, the amount payable was looking inordinately high and he happened to look at the details. He found an expense head called ‘TDS on Gift’ in the statement with an amount of Rs 11,400 debited to his credit card account.

He had not purchased anything, nor had he received any gift and was thoroughly confused as to what this amo-unt pertained to. On enquiring with his bank, he found out that the bank was offering a gift to a lucky winner every week, who spent Rs 15,000 in a single transaction in the previous week.

Although the product would be given as a gift, the credit card holder who won the offer would be required to pay TDS at the rate of 30 per cent of the value of the gift before collecting the same.

This TDS amount would be debited in the credit card account of the winner.

Now, although Raj had spent Rs 15,000 in a single transaction, he was neither aware of such a scheme, nor was he interested in availing the gift. Also, he had not yet received the gift, although considerable time had elapsed.

In such a situation, if he had not checked his account, he would not have realised that he was charged with the TDS amount. If he does not receive the gift, he would have simply paid the extra amount, without even being aware of it.

Deduction  by error

In some cases, banks also debit your account erroneously due to mistaken identity. So in the above case, Raj may not even be eligible for the gift, as he would not have spent the required amount.

As a result, he would not receive the gift, but nevertheless would be charged with the TDS amount due to mistaken identity. That is, the bank wrongly debits Raj's account instead of doing so to the right recipient of the gift.

Let’s take another example. Sheela holds a locker in bank XYZ, which is linked to her savings bank account held in the same bank. The bank charges an annual locker rent of Rs 1,000 and this is debited from the related savings bank account.

However, there is a clause that if a customer maintains an average quarterly balance of over Rs 1 lakh in the savings account, the locker rent is waived for the year. Sheela maintained this balance and therefore was entitled to be waived off the annual locker charges.

However, the bank erroneously debited this amount. Sheela does not notice this charge in the statement, and the amount is, therefore, deducted from the account due to this oversight.

Non-intimation of new rules

Let’s look at an example of minimum balance non-maintenance charges. Usually banks charge a fee for non-maintenance of the stipulated minimum balance in the account. In Madhu’s case, his bank increased the minimum balance requirement for his type of account from Rs 2,000 to Rs 10,000 in September.

However, this increase was not communicated to the account holders. As a result, Madhu was not aware of the new minimum balance requirement, and continued to maintain a balance less than Rs 10,000 as the monthly average balance. The bank debited his account with Rs 250 in the month of October, for non-maintenance of minimum balance in September.

Madhu failed to check his bank statement and for the next eight months, the bank continued to debit Rs 250 every month. In May, Madhu realised that his savings bank balance was lower than what it should have been and, therefore, checked the account.

Only then did he notice this debit. He immediately claimed for a reversal from the bank. However, since considerable time had elapsed and the financial year had closed, the bank declared that it was not possible to reverse the charges. Had he noticed these charges earlier, the bank could have refunded the amount.

Extra deduction due to ATM error

A wrong debit in your account due to ATM transactions is another example. Priya withdrew Rs 1,000 from the ATM, but the machine dispensed only Rs 900. However, her account is debited with Rs 1,000. Priya thinks her account is debited with the actual cash she obtained from the ATM, i.e. Rs 900 and does not notice the extra amount debited in her account.

What's the solution

So, what is the solution to the customers in the above examples? First, it is clear that one has to check his bank statement and credit card statement every month to avoid such mistakes. If there is some transaction that was not authorised by you, it should informed to your bank immediately.

As all banks now have online banking, make sure you activate this facility to be able to check your statements and balance at any time.

Write a complaint to your bank’s grievance cell with all facts of the case and proofs, if any. For example, Sheela should produce her locker opening form which specifies that she will be waived off the fees if she maintains over Rs 1 lakh. Similarly, Priya should enclose a copy of her ATM transaction slip.

If your bank does not offer a suitable reply within 30 days of filing the complaint, you can approach the Banking Ombudsman. This is a senior official, who is appointed by RBI to address and resolve customer complaints with regard to banking services.

You can either file an online complaint or write to them in the offline mode by filling the complaint form. The complaint form is available on the RBI website.

Remember to attach all proofs and copies of correspondence when you file the complaint. A complaint must be filed at the office of the ombudsman in which jurisdiction the concerned bank branch is in.

A legally binding agreement will be passed by the ombudsman within a month. If, however, a settlement is not possible, an award is passed allowing both the parties to present the case to the ombudsman.

Finally, if the settlement of the ombudsman is not satisfactory, you can file an appeal with the appellate authority within 30 days or you can also approach the consumer court which deal with banking complaints.

Adhil Shetty is CEO of BankBazaar.com