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Bank pays for card torment

New Delhi, Dec. 13: A bank that humiliated and terrorised a client for payments on a credit card he never received or used must pay “exemplary damages”, a court ruled while warning other banks against such tactics.

Asking Standard Chartered Bank to pay Vinay Kumar Sood Rs 2.5 lakh, the judge told banks in general their “approach in casually resorting to such aggressive, belligerent and callous methods unmindful of a person’s reputation has to be prevented and nipped in the bud”.

Many banks have been known to hound clients for alleged dues on cards they never used or for payments they had already made. The banks often ignore requests to explain the demands, issue correct statements or return sums misplaced by technical faults.

Sood, a Delhi resident, had applied for a Stanchart credit card in 1994. He never got the card, but in 1999, he received a notice stating he had an outstanding amount of Rs 1.2 lakh on the card.

Despite repeated requests, the bank didn’t explain the notice or show the accounts. On July 28, 2002, Sood received another bank notice, this one revising the amount he had to pay to Rs 4.21 lakh.

When a desperate Sood wrote to the bank’s head office in Bangalore, the bullying worsened. The bank kept calling him at home and at office, asking him to pay up and branding him a “creditor”.

Sood’s close friends, relatives and colleagues began to believe that he did indeed owe money to the bank.

“This resulted in his falling in the esteem of the people around him and tarnished his reputation,” additional district judge Ina Malhotra said.

Sood’s wife told the court that bank officials would call at their home and threaten to file a case of cheating against her husband and have him arrested. “We were shattered and the entire family was living in a state of fear.”

“The sword of Damocles hung over his head with fear of criminal action and a likely arrest,” the judge observed. “(The) persistent acts of the bank without any ground was defamatory in nature and harmed the reputation of the complainant.”

The bank was asked to pay Sood Rs 2 lakh for loss of reputation and Rs 50,000 for mental agony and harassment.

The RBI, too, recently moved against credit card harassment by banks.

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