Is your bank charging your credit card for someone else's dues?

Around 400 years ago, when William Shakespeare said, “What’s in a name?” he certainly did not have credit reports in mind. But, if this English genius was around today, he probably might have acknowledged, “There’s much in the name.” Reason: if you have a name which is popular or common, there is a good possibility that things might go wrong, especially when it comes to modern day banking.

Picture this: You have a credit card with a certain bank and you are regular in paying your dues on time. One day you get a call from the bank’s appointed recovery agent asking you to make the payment on the card outstanding. You check your card details and you have no outstanding dues, but the calls just don’t stop. Even after several requests to your bank, you continue to get pesky calls from recovery agents for an outstanding amount, which was never due on your card.

This happened for real: If you thought this is an imaginary situation, it is not. This happened for real and is cited in a Reserve Bank of India’s document. Even after several requests to the bank to stop the pesky recovery calls, it seemed the request fell on deaf ears and the customer finally approached the banking ombudsman (BO). The ombudsman investigated the matter and found that the personal details pertaining to the card (in collections) did not tally with those of the complainant.

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In fact, the customer’s card number was different than the one on which the outstanding amount was due. The customer was being harassed on account of a mistaken identity. The BO found that two cards were issued to two different individuals having the same name, but the complainant was being approached for settling the dues of the other cardholder. The RBI document said, “BO advised the bank to pay the complainant compensation of Rs 10,000 for causing mental harassment to the customer who had been issued legal notices in the matter. The bank accepted their mistake.”

What we can learn: Clearly the bank goofed up in this particular case. But, as Edward Aloysius Murphy, famous for his Murphy’s Law, once said, “Anything that can go wrong, will.” And if this is true, it’s wise to know what all can go wrong, so that you can be cautious in advance and actually avoid facing an unpleasant situation. This logic seems true even when it comes to dealing with credit cards. If you are someone who has a popular or common name, it makes sense to get your credit report at least once a year, to see if all the information mentioned on your credit report actually belongs to you and there are no cards or loans assigned to your name.

Also, in the above mentioned case, since the customer was not on auto-pay facility, the bank had to actually make calls to recover the dues (though not his dues), but if he was on auto-pay, the bank would have simply deducted the due amount from his savings bank accounts even though the credit card dues relate to another person. In such a case, the customer would not even have realised whether the amount was small, and he wasn’t careful with checking card statements. Hence, it’s best to avoid linking your savings bank account to the credit card to pay dues. And finally, if you have any issues with the bank and they are unable to resolve the same within the legal timeframe or you are not satisfied with their resolution, it makes sense to approach the banking ombudsman.