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RBI says, credit card companies must not harass their customers

The Reserve Bank of India (RBI) has conveyed a stern warning to credit card issuers and third-party agents, requesting that they refrain from using intimidation or harassment to recover debts from clients.

Concerning the collection of client debts, the RBI has requested issuers to ensure that they and their representatives follow the fair lending practises code.

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Card issuers/their agents shall not use intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude on the privacy of credit cardholders’ family members, referees, and friends, making threatening and anonymous calls, or making false and misleading representations, it stated.

Meanwhile, the RBI has instructed card firms not to issue unsolicited credit cards or upgrade an existing card without the customer’s informed agreement, or they would face a penalty of double the invoiced amount.

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It also requested that card issuers and third-party agents refrain from using intimidation or harassment to collect debts from clients. The RBI said in its master directives on credit and debit card issuance that “the issue of unsolicited cards/up-gradation is absolutely forbidden.”

These guidelines will go into effect on July 1, 2022.

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It further said that if an unsolicited card is issued or an existing card is updated and activated without the recipient’s specific agreement, the card issuer would be required to reverse the charges and pay a penalty equal to twice the invoiced amount.

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