Have multiple products from the same bank? If yes, watch out

Have multiple products from the same bank? If yes, watch out

Sometime in 2004, I became a victim of cross-selling. A persistent telecaller from a UK bank where I held a savings account, sold me a “free" credit card and an add-on card for my husband. Having worked for two banks, I had accumulated an array of credit and debit cards, so I almost never used it. My husband was once stuck in Frankfurt airport and used this add-on credit card to buy a phone card costing around €10. No other transaction ever happened on those cards.

In the following years, a lot changed in our lives, particularly our mailing address as we moved from Mumbai to overseas to Noida. The bank was updated about the change in addresses for the savings account so I did not feel the need to do the same thing separately for the credit card.

Recently when I idly logged onto the bank’s net banking, I was baffled to see a debit of Rs12,000 in what was a near-dormant account for me. Alarmed, I called up that bane of modern day living—the call centre. Apparently, the €10 transaction (approximately Rs600), had snowballed into Rs12,000 due to various late charges and interest rates.

I sputtered in fury to the agent that I had never received statements for this card.

“It is going to your Andheri address ma’am," the lady hissed. Right, I thought, the one I quit long years ago. I wrote to the head of consumer banking asking three questions:

One, since the bank has taken the money from my savings account, it knows that the savings account and the card belong to the same person. So, when it can use that information to grab the money, it can also use the address on the savings account to inform me that this is the outstanding on my card, which they plan to debit.

Two, why is there a gap of a few years between the transaction and the recovery? Can you touch a customer’s money years later, without telling them? What if a customer had budgeted for it and suddenly finds that they are short by Rs12,000 because the bank decided to go on a recovery drive?

Three, isn’t it ironical that I was actually being penalized because (out of my own fiscal indiscipline) I had kept idle cash in a dormant savings account? All the while, the bank has been profiting from those funds and, in return, slapped a fine on me that I didn’t even know was due.

After a tiresome, long drawn out argument, I finally received a mail from the bank’s nodal office in Chennai. They had reversed the charges as a service gesture. But they wished to draw my attention to the card services guide that explicitly states that “…the bank may, without notice, combine or consolidate the outstanding balance on the credit card account with any other account(s) which you maintain with the bank and set-off any money outstanding to the credit of such other account(s)…"

There is silence on whether this can be done without intimation to the customer and after any number of years.

And I would love to know how many people actually read the card services guide—the glossy little book with legalese in font size three. Obviously, putting it there gives the bank adequate cover in situations like this.

Creating a single window view of all the customer’s relationships is a huge challenge in retail banking, owing to the lack of a unique identifier across the customer’s products (different names on a card and a savings account; mailing address could be office in one and residence in the other etc.). In this case, the bank had, in fact, got a single window view of my relationship, but myopically chose to use that to settle some petty dues instead of contacting me with an investment idea for the idle funds.

Vandana Vasudevan writes stories of mass urban consumer experiences. She is a graduate from the Indian Institute of Management, Ahmedabad and currently works with HT Media Ltd.