Tamil Nadu

StateCommission

FA/28/2018

Standared Charteted Bank, Rep by its MD Das Gupta Sinha and 2 others - Complainant(s)

Versus

H.A. Eswara - Opp.Party(s)

R & P Partners

25 May 2023

ORDER

 IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:   Hon’ble THIRU. JUSTICE R. SUBBIAH  :     PRESIDENT

                 THIRU R   VENKATESAPERUMAL           :      MEMBER

 

F.A. No. 28 of 2018

[Against the order passed in C.C. No.181 of 2013 dated 22.03.2017 on the file of the D.C.D.R.F., Chennai (North)].

 

Thursday, the 25^th day of May 2023

 

 

1. Standard Chartered Bank

    Rep. by Madhura Das Gupta Sinha

    Head, Service Quality India

        And South Asia

    No.19, Rajaji Salai,

 Chennai – 600 001.

2.  Standard Chartered Bank

 Principal Nodal Officer

Customer Care Unit

     No.19, Rajaji Salai,

Chennai – 600 001.

3.  Standard Chartered Bank

Represented by the Manager

Raja Rajeswari Towers

 No.29/30, Dr.Radhakrishnan Salai

Mylapore, 

 Chennai- 600 004.                                                .. Appellants/Opposite parties

 

                                                                            

- Vs –

H.A. Eswara

MMPDA Towers, 1st floor

New No.184, Old No.214

Royapettah High Road

Royapettah, Chennai – 600 014.                                 ..  Respondent/  Complainant

       

 

 Counsel for Appellants/Opposite Parties      : M/s. R & P Partners

 Counsel for the Respondent/Complainant    : M/s. Menon

 

                                               

This appeal came before us for final hearing on 25.05.2023, and on hearing the arguments of the counsel for the parties and on perusing the material records, this Commission made the following :-

O R D E R

R.SUBBIAH J., PRESIDENT [Open Court]

 

                This appeal has been filed under Section 15 of the Consumer Protection Act, 1986 as against the order dated 22.03.2017 passed by the District Consumer Disputes Redressal Forum, Chennai (North) in C.C. No.181 of 2013, allowing the complaint filed by the Respondent herein, in part. 

 

                  2.  For the sake of convenience, the parties shall be referred to in the course of this Order, as per their respective rankings before the District Forum.

        3.   In brief, the case of the complainant, as given in the complaint filed before the District Forum, is as follows :-

                The Complainant is a renowned Architect.  He used to travel extensively to various foreign countries very often for his business and leisure.  He has been using the credit cards issued to him without any default for about 30 years.  Whileso, the complainant visited United States of America on 21.04.2013 on a holiday trip.  The Visa Gold Card issued by the opposite party Bank was accepted only for a few days in America.  Thereafter, to his shock and surprise, the said Gold Card was rejected wherever he swiped at the point of sale.  Hence, the complainant called the credit card helpline of the opposite parties on 04.05.2013 and they informed the complainant that there was no reason for rejection of the cards, however, they assured that the problem had been set right and the credit card could be used from the next day.  But, contrary to the assurance given by the opposite parties that the cards are valid, the said Card was accepted only in certain places and that too for a value below 100 dollars and the card was rejected on many occasions in respect of transaction of more than 100 dollars, which has put the complainant in acute embarrassment.  The complainant being a renown architect having a priority bank account with the opposite parties, had to face several questions at the points of sale as to the ownership of the cards in front of other public.  Hence, the complainant and his son made several international calls to the opposite parties helpline in Chennai.  The helpline staff of the opposite parties gave various reasons for rejection of the credit cards, stating that the concerned sales desk clerk would have closed for the evening and that the payment would have been stopped at night as a security measure for the card holder, which was unbelievable.  Since the problem was not resolved, the complainant had to use his platinum card.  But, on 04.05.2013, the platinum Visa Card issued by the opposite party Bank was also rejected at Macy's Departmental Stores, New York, which caused much embarrassment and inconvenience to the complainant.  Hence, the complainant panicked and his desperate attempt to get the helpline of the opposite parties to resolve this issue failed repeatedly, as he had to comply with several dialing instructions and was put on hold over the overseas calls for several minutes.  From thereon, both the credit cards of the complainant continued to be rejected although they were accepted for transactions less than $100, that too only in some places.  In order to resolve the issue, the complainant arranged a conference call with the credit card helpline of the opposite party Bank through his office in Chennai on 06.05.2013 early morning 01.30 am, New York time.  A lady in the helpdesk listened to the complainant and said that she would set right the problem within an hour and would call back the complainant after rectifying the problem.  But the complainant did not receive any call from the helpdesk, in this regard.  The complainant got a call at 05.30 am from the opposite parties helpdesk only to enquire once again about the credit card problem of the complainant.  Hence the complainant had to provide all the details including the credit card numbers again and he was given an assurance that the problem would be set right, once again.  But even thereafter, the complainant's credit cards were not accepted causing embarrassment, loss of reputation and humiliation, leading to severe stress, pain and mental agony and was made to suffer insults and insinuations.  On 10.05.2013, when the complainant was at Dubai, his Visa Gold Card was accepted for a transaction of 810 Dirhams, while the same card was rejected for a transaction of 1745 Dirhams at another point of sale.  After returning to India, on 16.05.2013, the Visa Gold card was rejected at Bangalore for a transaction of Rs.80,000/- but came to be accepted when it was swiped for about four times at the point of sale.  To the surprise of the complainant, he was called over phone by the opposite parties to authenticate the transaction and his identity after the transaction.  This shows that the opposite parties had not taken any steps to redress the grievance of the complainant, who was on a foreign trip with his family, totally depending on the credit cards issued to him, which shows that the opposite parties were deliberate in deactivating the credit cards of the complainant and thus had committed deficiency in service provided to the complainant.  The conduct and attitude of the opposite parties and the deficiency in service by not resolving the issue of the complainant with regard to rejection of his credit cards, amounts to negligence, deficiency in service and unfair trade practice.  The complainant was an architect of high repute in Chennai, who was put up in Hilton Hotel in Times Square, New York and Loews Madison Hotel in Washington and to his embarrassment and discomfiture, he had to make alternate arrangements to clear the hotel bills by cash.   Further, the Visa Gold Card issued to the complainant's wife was also deactivated without prior intimation, approval or consent.  Hence, the complainant sent a detailed letter on 21.05.2013 to the opposite parties seeking their explanation but there was no response from the opposite parties.  Therefore, the complainant sent a legal notice dated 17.05.2013 to the opposite parties demanding compensation.  The opposite party sent an email dated 20.06.2013 stating that due to security concerns, in high risk countries, the transactions of card holder would be permitted after the bank had positively validated the identity of the card holder and hence the transactions were rejected.  This explanation of the opposite parties was absurd and untenable as the Bank had accepted the credit card transactions for a few days in respect of the Visa Gold Card and the transactions in respect of Visa Platinum Card till 04.05.2013.  If the opposite parties had made a call to the complainant to verify the authenticity of the transaction and identity of the complainant, the issue would have been easily resolved. Instead, even after confirming his identity on the helpline, the opposite parties kept the credit card deactivated and did not inform the complainant about their security concerns in high risk countries.  Hence, alleging deficiency of service on the part of the opposite parties, the complaint has been filed seeking the following directions to the opposite parties :- 

1. to pay a sum of Rs.1,00,000/- towards reimbursement of the expenses incurred by the complainant due to deactivation of the credit cards;
2. to pay a compensation of Rs.10,00,000/- towards deficiency in service, negligence, unfair trade practice and also for the embarrassment, insult, stress, pain suffering and mental agony caused to the complainant;  and
3. to pay the cost of this complaint.

                 4.  Resisting the case of the complainant, the opposite parties have filed a version stating that the Credit Card bearing No.4196074947975240 had been issued to the complainant by the opposite parties on 19.05.1997 under the category "Gold Reward-Primary" with expiry date as September 2018.  The complainant is also holding another credit card bearing No.4541982338863449 under the category "Manhattan Platinum-Primary" with expiry date as June 2017.  Due to misuse of credit cards abroad, certain security measures are undertaken by way of velocity parameters by the opposite parties.  It is the further case of the opposite parties that the velocity parameters are certain essential parameters that are built into credit cards in order to reduce misuse of the credit cards.  This will serve as a protection not only for the customers but also for the opposite parties.  Based on the said velocity parameters on a credit card, a transaction may be referred to the issuer for certain type of transactions.  This could lead to some amount of customer dissatisfaction, especially for transactions in abroad of high value, since most merchants would not be willing to call the issuer and take an approval.  Therefore, a parameter override was given to certain customers by the opposite parties under special request from the customers.  The opposite parties are abiding all the guidelines, directives, instructions or advices of RBI as may be in force from time to time.  Clause 6 of the Credit Card Member Rules and Regulations states as follows:-

" Use of the Card: 

(A)  The card should be used: (i) only within the credit limit notified by the bank to the Card Member, (ii) not after the last date of the month embossed on its face, (iii) within the foreign exchange entitlements as stipulated by RBI from time to time, (iv) by residents for making personal remittances which are permitted under the extant Foreign Exchange Management Act, Rules and Regulations subject to the applicable ceilings, if any, and compliance with conditions and documentation prescribed for the purpose concerned, (v) by residents going abroad for all bonafide personal expenses, including the purchase of goods for personal use provided, the total exchange drawn during the trip abroad does not exceed the entitlement.  Import of goods so purchased abroad into India would be governed by the Baggage Rules/ Exim Policy in force. "

There were restrictions on certain transactions.  However, on receiving the call from the complainant, the opposite parties had made sufficient arrangements and the complainant was able to utilize the card amount.  As per the statement of the credit card bearing No.4541982338863449 for 29th April and 29th May 2013 and the statement for the credit card bearing No.4196074947975240 for 26th May 2013, the credit cards had been utilised for abroad transactions, especially in USA and Dubai.  As per the statement dated 26.05.2013, the complainant had utilised the credit card for about Rs.1,08,332.12 in Dubai.  In relation to the transaction dated 16.05.2013, it could be clarified that the transaction had been processed for Rs.80,000/-.  Further, the electronic verification systems allow merchants to verify in a few seconds that the credit card is valid and the credit card customer has sufficient credit to cover the purchase, allowing the verification to happen at the time of purchase.  The said verification is performed using a Credit Card Payment Terminal or Point of Sale (POS) system with a communication link to the merchant's acquiring Bank.  Further, data from the credit card is obtained from a magnetic stripe or chip on the credit card.  As the system is fully automated the failure might have occurred due to a rare technical failure, wherein the request from the merchant did not get connected to the Visa/ Mastercard Network.  It is wrong and false to state that the credit card facility was deactivated on 04.05.2013. It is evident from the statement of the credit card that the complainant had extensively utilised the credit card facility during his trip abroad and had utilised the Platinum Credit Card on 5th and 6th May 2013 respectively.  Thus, there is no cause of action against the opposite parties.  It is a settled position of law that any act which is done in bonafide discharge of duty cannot be termed as negligent or deficient.  Therefore, there is no deficiency of service on the part of the opposite parties and thus sought for dismissal of the complaint.

 

 

                5.  In order to prove the case, both parties have filed their proof affidavits and on the side of the complainant, 14 documents have been marked as Exhibits A1 to A14 and the opposite parties have filed 3 documents and the same were marked as Ex.B1 and Ex.B3.  

 

 

                6.  The District Forum, after analyzing the entire evidence on records, had observed that both the credit cards were issued by the opposite parties for the purpose of using the same during the travel to foreign countries.  When the international credit cards were not accepted and rejected abroad, the very purpose of issuing international credit cards for using abroad is defeated.  The reasons given by the opposite parties for rejection of the credit cards for more than 100$ cannot be accepted.  Thus, it has come to the conclusion that there is deficiency of service on the part of the opposite parties and directed the opposite parties to pay a sum of Rs.1,00,000/- as compensation for mental agony and Rs.5000/- towards litigation expenses, with a default clause to pay 9% interest.  Aggrieved by the said order, the opposite parties have filed the present appeal.

 

 

                7.  Heard the submissions of the learned counsel for the appellants/opposite parties and the respondent/complainant and perused the material available on records. 

 

 

                8.  Learned counsel appearing for the appellants/ opposite parties submitted that due to misuse of the credit cards abroad, certain security measures are undertaken by way of velocity parameters by the opposite parties.  The velocity parameters are certain essential parameters that are built into the credit cards to reduce misuse of the credit cards.  This would serve as a protection not only for the customers but also for the opposite parties.  Based on the velocity parameters on a credit card, a transaction may be referred to the issuer for certain type of transactions.  This would lead to some amount of customer dissatisfaction, especially for transactions made abroad of high value, since most merchants would not be willing to call the issuer and take an approval.  Hence, a parameter override was given to certain customers by the opposite parties on the basis of special request from the customers and controls therein.   This procedure is followed in case of high risk countries only.  However, in the instant case, the opposite parties have made sufficient arrangements when they received a call from the complainant and the complainant was also able to use the card.  In fact, as per the statement of the credit card dated 26.05.2013, the complainant had utilised the credit card for about Rs.1,08,332.12 in Dubai.  In relation to the transaction dated 16.05.2013, it could be clarified from the statement that transaction had been processed for Rs.80,000/-.  The electronic verification systems allow the merchants to verify in a few seconds the validity of the credit card and the sufficient credit to cover the purchase by the customer, allowing the verification to happen at the time of purchase.  The details have been clarified to the complainant by the opposite parties vide their e-mails dated 08.05.2013 and 20.06.2013.  As per the records available with the opposite parties, the complainant had utilised the Platinum Credit Card on 05.05.2013 and 06.05.2013.  Hence, prays to set aside the order of the District Forum and consequently dismiss the complaint. 

 

                9.  Countering the submissions of the appellants/ opposite parties, counsel for the respondent/ complainant submitted that the complainant is a renown Architect who frequently travels abroad for business and leisure.  He always uses Manhattan Platinum Visa card and Visa Gold card issued by the opposite parties, without any default.  Whileso, on 21.04.2013 when he visited United States of America for a holiday trip, the Visa Gold card was accepted only for a few days in America.  Thereafter, to his shock and surprise, the said card was rejected wherever he swiped, at the point of sale.  When he called the credit card helpline of the opposite parties, he was informed that there was no reason for rejection of the credit cards.  Though the opposite parties informed that the problem has been set right, they have not done so.  Contrary to the assurance given by the opposite parties that the cards are valid, the Visa gold card was accepted only in certain places and that also for a value less than US $ 100.   Since the card was rejected on many occasions, it had put him in acute embarrassment.  Similarly, on 04.05.2013, when the complainant used the Platinum Visa card issued by the opposite parties, the said card was also rejected.  Thus, both the credit cards were continuously rejected, except at some places that too for transactions less than US $ 100, for which no reasons were given by the opposite parties.  Therefore, there is deficiency of service on the part of the opposite parties, which has been rightly held by the District Forum. 

 

                10.  On perusal of the records we find that the complainant is a renown architect who used to travel very often to foreign countries.  He was holding two credit cards, namely, Manhattan Platinum Visa Card and Visa Gold Card.  During his travel to foreign countries, he was using the said cards.  On 21.04.2013, when he was in United States of America he used his Visa Gold card, but the said card was rejected wherever he used, at the point of sale.  When the complainant called the credit card helpline on 04.05.2013, he was informed that there was no reason for rejection of the cards and they assured him that the problem had been set right.  But again the complainant faced the same problem.  The Visa Gold card was accepted only in certain places and that too for a value below US$ 100.  Therefore, on 04.05.2013 the complainant used the Platinum Visa card, which was also rejected at Macy's Departmental Stores.   Both the credit cards were accepted for transactions less than US$ 100 that too only in some places.   The complainant had suffered great difficulty and mental agony, when he was unable to use the said cards.  But it is the reply of the opposite parties that it is wrong and false to state that the credit cards were deactivated on 04.05.2013.  Due to misuse of credit cards abroad, certain security measures were undertaken by way of velocity parameters by the opposite parties.  Based on the velocity parameters on a credit card, a transaction may be referred to the issuer for certain types of transactions.  The Statement of Credit Cards would show that the complainant had used the credit cards for transactions on 4th,5th and 6th May 2013.   Therefore, there is no deficiency of service.  But we are unable to accept the explanation offered by the opposite parties.   The main defence of the opposite parties is that due to misuse of credit cards abroad certain security measures were undertaken by them.  Velocity parameters were inbuilt in the credit cards to reduce the misuse of the credit cards.  If it is so, if really the opposite parties are so cautious to avoid the misuse of the credit cards, they ought to have informed the same to the customers, especially when they were carrying the credit cards in order to use the same abroad.  But no such action is said to have been taken by the 1st opposite party.  The in-built mechanism made in using the credit cards has not been informed to the customers.  Had he been informed about the inbuilt method, the complainant would have been cautious while using the credit cards.  Instead, when the transactions of the credit cards are declined, certainly the complainant would have been put in a great embarrassing position at the time of using the credit card in foreign countries. 

 

                11.  Therefore, we do not find any infirmity in the order passed by the District Forum.  We are of the opinion that there is deficiency of service on the part of the opposite parties.   Hence, this Commission is constrained to direct the opposite parties 1 to 3, jointly and severally, to pay a sum of Rs.1,00,000/- towards compensation for mental agony besides a sum of Rs.5000/- towards litigation expenses, as ordered by the District Forum, within a period of six weeks.  However, we find that the interest granted at the rate of 9% by the  District Forum appears to be on the higher rate and hence, the rate of interest granted @ 9% in the default clause, is reduced to 6%.  Except this modification, the order dated 22.03.2017 passed by the District Consumer Disputes Redressal Forum, Chennai (North) in C.C. No.181 of 2013 remains unaltered.             

 

                12.  In the result, the opposite parties 1 to 3, jointly and severally, are directed to pay a sum of Rs.1,00,000/- towards compensation for mental agony besides a sum of Rs.5000/- towards litigation expenses, as ordered by the District Forum, within a period of six weeks.  However, the rate of interest granted @ 9% in the default clause, is reduced to 6%.  Except this modification, the order dated 22.03.2017 passed by the District Consumer Disputes Redressal Forum, Chennai (North) in C.C. No.181 of 2013 remains unaltered.  Consequently, the Appeal is partly allowed. 

 

 

 

R  VENKATESAPERUMAL                                                                                                 R.SUBBIAH

         MEMBER                                                                                                                     PRESIDENT

 

 

Index :  Yes/ No

 

 

AVR/SCDRC/Chennai/Orders/May/2023