Managing frauds: You must subscribe to banks' value-added SMS alerts

The Reserve Bank of India (RBI) recently notified banks on matters of charges levied by banks for sending SMS alerts. The notification posted on the apex bank’s website says, “With a view to ensuring reasonableness and equity in the charges levied by banks for sending SMS alerts to customers, banks are advised to leverage the technology available with them and the telecom service providers to ensure that such charges are levied on all customers on actual usage basis.”

But before you get confused about these charges, there are a couple of things you need to know. Basically banks send you two types of SMS alerts: One is mandatory ones which give details of charges and transaction details like when you use your debit card at a point of sale terminal or at an ATM and are not charged and the other a value added service which many banks have started charging for.

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A banks website says, “Debit/Credit card transactions alerts sent as per regulatory and internet banking alerts do not form part of SMS banking services (referred as mandatory alerts). Customer who are not registered for chargeable value added SMS service will continue to get these mandatory alerts free of charge.”

The services include value added SMS services like SMS alerts for:

*Alerts for cheque bounce due to insufficient funds.

*Utility bill payment alerts.

*Weekly account balance.

*When your account balance goes below Rs 5000, Rs 10,000, Rs 20,000, Rs 50,000.

*Alters over the regular mandatory SMS, as in special alerts for card transaction greater than Rs 5000, Rs 10,000, Rs 20,000/ Rs 50,000, that isfor transactions that are greater than the limit specified by you.

The benefits of value added services are that every debit and credit above a certain value is intimated to you. Also, you don’t need to visit bank, ATM or phone banking to make a balance enquiry. Apart form getting bill payments you can also schedule payments on your phone as well.

These are just a few example of the services which the value added SMS services banks offer.

The banker we spoke to told us, “If the customer has a savings account as well as a credit card, we don’t charge separately for both the relationships.” The good part is that the charges for value added SMS service is usually around Rs 15 per quarter or Rs 60 annually. Keep in mind that you don’t have to subscribe for the value added SMS service, but we strongly do. The cost is very small, and in these times of financial frauds the sooner you know about any activity on your account the better it is.

To know how banks goof up and how setting SMS alerts on your accounts and cards can help, read these banking horror stories here, here and here.

Chances are that you are already receiving SMS alerts from your bank. But there is a good possibility that would just be the mandatory SMSes and not the value added services. Are you sure you are registered for the value added service? If you already have value added service on your account/ card activated, good for you. But if you are not, call your bank and get this fixed. The Rs 60 you pay annually is really not a very big amount for additional safety and monitoring of your accounts.