Banks Can't Deduct Membership Fee For Lost Credit Cards, Jalandhar District Commission Holds RBL Bank Liable

Brief Facts:

The Complainant held a credit card issued by RBL Bank (“Bank”). He was assured that no extra or hidden charges would be applied. In January 2019, the Complainant lost his credit card and promptly informed the Bank requesting the card to be permanently blocked. The Bank informed him to pay the outstanding amount of Rs. 30,196/- in order to block the card. The Complainant made the aforementioned payment via RTGS from his account. Despite this, he received a call from the Bank claiming an outstanding balance of Rs. 1,055/-, which he also paid. Later, he received another call demanding Rs. 4,500/-. The Complainant argued he had not used the card since losing it and requested its permanent blockage. He contended that the Bank's demand for additional payments was excessive. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Jalandhar, Punjab (“District Commission”) against the Bank.

In response, the Bank argued that the allegations of extortion required extensive evidence, including handwriting experts, and the matter was beyond the District Commission's jurisdiction. It claimed that the Complainant was not a consumer under the Consumer Protection Act since the card was blocked and no services were being provided. It also stated that there were complex legal and factual issues that rendered the complaint unsustainable. It denied the allegations and argued that no excess amounts were demanded or received.

Observations by the District Commission:

The District Commission noted that the Bank contended that the annual fee for the credit card, amounting to Rs. 3,538.82/- was charged in February 2019. It further claimed that the Complainant only paid Rs. 1,055/-, leaving a total due of Rs. 4,142.76/-. Due to non-payment of the annual fee and other charges listed in the account statement, the Complainant was liable to pay Rs. 7,474.99/-, which included the membership fee, late fee, and other charges.

The District Commission noted that once the card was lost and no longer in the Complainant's possession, he could not have used it. Despite this, the Bank categorized the card as 'L' for lost instead of blocking it. It held that this categorization should have prompted the Bank to act accordingly by blocking the card and ceasing further charges. The District Commission noted that there was no provision indicating that charges were to be collected for blocked cards. Therefore, the bench held that the Bank wrongfully levied the annual fee, fine, membership fee, late fee, and other charges.

Consequently, the District Commission directed the Bank to return the excess amount charged after January 4, 2019, with an interest rate of 6% per annum. Additionally, the Bank was ordered to pay Rs. 10,000/- as compensation to the Complainant for mental harassment and Rs. 5,000/- as litigation expenses.

Case Title: Suresh Kumar vs RBL Bank Ltd and Anr.

Case Number: CC/288/2019

Date of Pronouncement: 25th June 2024