Bank fined Rs 10 lakh for harassing man over credit card dues

Rahul Chhabra / TNN / Feb 23, 2007, 23:52 IST

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The State Consumer Commission has slapped an exemplary fine of Rs 10 lakh on Standard Chartered Bank for harassing a CR Park resident.

Bank fined Rs 10 lakh for harassing man over credit card dues

NEW DELHI: Showing little mercy for banks which take to insensitive and illegal tactics for recovery of credit card dues, the State Consumer Commission has slapped an exemplary fine of Rs 10 lakh on Standard Chartered Bank for harassing a Chittaranjan Park resident and raising an illegal bill for Rs 28,000.
Commission president Justice J D Kapoor also directed all other banks and financial institutions to refrain from such practices and directed SHOs of Delhi Police to register a criminal case against the chief executive officers (CEOs) of concerned banks and financial institutions if consumers complain about threats or abuse by their loan goons.
"If in future, we receive any such complaint, the CEO of the concerned bank or finance company shall face punishment as provided under Section 27 of the Consumer Protection Act, 1986, a minimum sentence of one month imprisonment or fine or both," thundered Justice Kapoor.
"We, through this order, direct all the banks or financial institutions who provide loans and credit cards, not to resort to methods which are illegal and have no legal back-up and not to use abusive and threatening languages on telephone and not to visit residence of a consumer for recovery of loan and not to use force or musclemen for repossessing vehicles," said Justice Kapoor.

Pulling up Standard Chartered Bank for harassing Vibhu Bhakru, a Delhi High Court advocate living in CR Park, for over an year by sending goons to his house and issuing threats on phones to the extent that he would be abducted if the dues were not paid, the commission said: "The conduct of the bank amounts to the grossest kind of deficiency in service, unfair trade practice and flagrant breach of terms of the contract," said Justice Kapoor.

The commission dumped the bank's defence that the matter had been settled as a "no due certificate" had been given to Bhakru and said that it was only after being forced and that the certificate was issued after the complaint was filed.
Issuing the certificate did not take away the right of the consumer to seek compensation and seek imposition of punitive damages on such service providers, the commission said.
Stressing that no civilised society could brook such kind of methodology for recovery of any dues which are recoverable through civil legal remedy, Justice Kapoor said: "We, as a deterrent, impose a punitive damages of Rs 10 lakhs to be deposited in favour of the State Consumer Welfare Fund (legal aid) and award Rs 20,000 to the complainant for trauma, mental agony, harassment and loss of reputation and creditworthiness because of threat of putting him on defaulters' list."
"No person, howsoever rich, would pay to the bank or to any other financial institutions for nothing unless and until he owes something... therefore, to take the plea that the complainant has filed the plea to become unjustly rich is like rubbing salt over the wound and adding insult to injury," Justice Kapoor said, awarding a compensation of Rs 20,000 to Bhakru for mental agony suffered at the hands of goons.
Bhakru received a bill of Rs 28,000 after his credit card expired and no new new card was issued. He said in his complaint that he took up the issue with the bank but the officials did not pay heed. Rather recovery agents sent to his house injured and even threatened to abduct him.

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