How to Dispute Unsolicited Credit Card Issued Without Customer’s Consent or Knowledge
Maya M 29 January 2021
The Reserve Bank of India (RBI) had stopped banks from sending unsolicited credit cards during the tenure of Dr Y Venugopal Reddy as governor. But the menace is back again and cards are being dubiously issued to people without their knowledge or consent. Moneylife has received scores of details from people who are struggling to have such cards cancelled. Some of them aren’t even aware about the nasty consequences of ignoring cards issued in their name and the fees that are billed to them. 
Please remember, an unsolicited credit card can have any number of unforeseen issues, including a bill that is compounding rapidly and affecting your credit score; or misuse of the card issued and activated without your knowledge. 
If you are a victim, please email details to [email protected] (Moneylife Foundation ) which is in the process of drafting a memorandum to the RBI. 
What should you do if a bank has issued and sent you a card without your explicit consent or knowledge? Let’s examine a few scenarios.
Case 1: Arjun discovered that he has been issued a credit card which was never received by him, but had been activated by someone else. So, he began to receive payment notices and calls from the bank asking him to pay up. He has now received a fat bill for a two-year period, which shows that the card has been used for shopping. His credit score is affected and he wants to know how to resolve the problem. 
This is in violation of the RBI Master Circular on credit card operations. Under section ’Right to Privacy’, RBI empowers the customer to fight cases where a card is issued by the bank has not reached the correct person (the end-customer) and has been fraudulently used. 
Point 8.1 of Section 8 of the Master Circular clearly says, “Unsolicited cards should not be issued. In case, an unsolicited card is issued and activated without the written consent of the recipient and the latter is billed for the same, the card issuing bank shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed”. 
Arjun is clearly a victim of a fraudulent transaction; so, what are his rights in this case? 
The RBI has advised credit card issuers to ensure that wrong bills are not raised and if a customer lodges a complaint he must be provided with an explanation and documentary evidence of his acceptance of the card within a maximum period of 60 days with the spirit of amicable redressal of the grievance. 
Further, credit card issuers have been advised to be careful before reporting a credit card holder as a defaulter to credit bureaus in case of pending disputes. As per RBI, such issues must have well laid down procedure for resolution and included in the issuers’ most important terms and conditions (MITCS).
Arjun can cite the above RBI regulations and write to the bank’s nodal officer (details are mentioned on respective bank portal) and if he is unhappy with the resolution, he can appeal with the RBI banking ombudsman after waiting for  four weeks.  
Case 2: Maya was issued an unsolicited Make-My-Trip ICICI co-branded credit card when her relationship manager (RM) forged her consent. When Maya called to complain,  the call centre executives first tried to deny the forgery, then claimed it was an additional new card being offered as an upgrade. She was told that she could destroy the new card or even retain it without using it and nothing would happen. She insisted that her consent was fraudulently obtained and she wanted the card cancelled. However, instead of cancelling the card issued, they despatched it the same night and it was out for delivery the next morning. 
Maya wrote to the bank’s nodal officer highlighting the unfair means (RM forging her consent) being used by the bank to push unsolicited credit cards on unsuspecting consumers. 
Point 8.5 from section 8 of the RBI Master Circular says “Unsolicited loans or other credit facilities should not be offered to the credit card customers. In case an unsolicited credit facility is extended without the consent of the recipient and the latter objects to the same, the credit sanctioning bank/NBFC shall not only withdraw the credit limit, but also be liable to pay such penalty as may be considered appropriate”.
She also pointed out that the banking regulator has also strictly forbidden banks and NBFCs from unilaterally upgrading credit cards and enhancing credit limits. Prior consent of the borrower should invariably be taken whenever there are any change/s in terms and conditions.
The bank apologised and cancelled the credit card after escalating the issue.
Case 3: Rahul had a credit card issued by HDFC Bank. He requested the bank not to renew it after expiry. However, the card was renewed and sent to him. He refused to accept the renewed card, but the bank re-sent the card to his home and it was delivered to the building watchman (since Rahul was not at home and his family had refused to accept the courier). To add insult to injury, the bank billed him annual charges for the card. 
Rahul wrote to the bank and quoted the RBI circular about unsolicited credit cards. Even if cards are issued at the request of customers, it is the duty of the bank to verify that the card has reached the correct customer. The card cannot be delivered by the courier agency to the building liftman or watchman. 
Case 4: Deepti has requested the bank to close her credit card multiple times in the past, but it is still showing up in her credit report as active.
It is not uncommon to see that banks are unwilling to close card accounts of long-standing good customers, who have established a healthy credit history. In case, if after repeated requests, your credit card has not been closed and you are being made to pay annual charges for the same, send a letter via registered AD or speed post to the internal ombudsman (His name and address is available at their website) stating that at the time of full & final settlement, payment was made and thus charges levied on the said account are completely illegal. Further, the ombudsman must take corrective measures so as to not affect the credit history of borrower / complainant. Attach a photocopy of your payment records of full and final settlement, letter requesting closure submitted to the bank earlier. Wait for 30 days and if he fails to revert back, file a complaint with the RBI banking ombudsman depending upon the region where you are located and this officer will 100% revert back and action will be taken against the erring bank.
How do you find out if you have been issued an unsolicited credit card?
The first step is to  check your credit report. If a credit card that you have not asked for, shows up in your report (which you cannot identify as what you had signed up for or consented and use regularly), take it up with the concerned bank immediately. You can lodge complaint with the credit information company, which will also take up the matter with the concerned entity. 
You need to dispute the credit card with the issuing bank after reading the RBI Master Circular, Section 8 which deals with the issue.  
Remember, not making the effort to close the card can snowball into a big issue later and you could land up in serious trouble if the card remains activated and misused.
Before approaching the Banking Ombudsman, remember the RBI mandates a three tier system for customers to follow. If these steps are not followed, then the ombudsman may reject the complaint.
1) Lodge a complaint in writing with the concerned branch/office of the card issuer. Obtain acknowledgement with stamp & date. 
2) If the grievance is not redressed at this level, approach the Nodal Officer, whose contact details are available at their website. 
3) If there is no response from the card issuer or the Nodal Office in 30 days, then approach the Banking Ombudsman
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