HSBC Bank directed to pay Rs 25,000

The Hongkong and Shanghai Banking Corporation (HSBC) Ltd has been directed by a consumer forum to pay Rs 25,000 as compensation to one of its former credit card holders for not getting his name removed from a defaulters list even after he cleared all his dues.

The New Delhi District Consumer Disputes Redressal Forum observed that once the card holder paid all the dues, the bank should have closed the accounts and informed the Credit Information Bureau (India) Ltd (CIBIL) that nothing was outstanding.

“We hold opposite party (HSBC Bank) deficient in service in not informing CIBIL of settlement of all outstanding dues of complainant…,” the bench presided by C K Chaturvedi told.

It directed the bank to issue a no-dues certificate to Delhi-resident Vinay Chola and to reconsider a fresh card for him. The forum also awarded him compensation of Rs 25,000 towards litigation charges and harassment caused to him.

The order came on the complaint of Vinay who had alleged that his credit status with CIBIL showed him as a defaulter despite he having cleared all his dues with the bank.

According to a settlement agreed upon with the bank, Vinay said, he had paid Rs 25,000 in three separate instalments one of which was collected late by the recovery agents and the same was shown as outstanding by HSBC.

The bank, in its defence, had contended that the settlement amount was not paid within the agreed upon time.

The forum, however, rejected the contention saying its recovery agents collected the last payment late.

HSBC to pay Rs 20,000 compensation to credit card holder

Hongkong and Shanghai Banking Corporation (HSBC) has been ordered by a consumer forum here to pay Rs 20,000 as compensation to one of its credit card holders for adding his name in CIBIL’s defaulters list even though he had paid all his dues.

While awarding the amount to the HSBC credit card holder, the New Delhi District Consumer Disputes Redressal Forum said the Bank should have “gracefully” accepted its fault instead of adopting an “obstructionist attitude” by seeking rejection of his complaint.

“We are shocked to observe the obstructionist attitude of opposite party (HSBC) which instead of accepting the fault gracefully by filing a reply, has sought rejection of the complaint on ground of remedy of arbitration under the Credit Information Bureau (India) Limited (CIBIL) Act.

“It (HSBC) has not disputed facts. The remedy under the Consumer Protection Act is not affected by the arbitration agreement. We dismiss the application of the opposite party and award a compensation of Rs 20,000 to the complainant (Rakesh Gupta) inclusive of litigation expenses,” said the bench presided by C K Chaturvedi said.

Delhi resident Rakesh Gupta in his complaint had alleged that he had been issued a HSBC credit card on understanding that no annual charges would be levied, yet after the first two months of usage the Bank started levying the charges.

When he made a representation to the bank about annual charges, the same were reversed temporarily, he said adding in 2006 he paid all the outstanding dues and asked the bank to close the card.

Gupta alleged the bank, instead of closing the card, continued showing the annual charges as outstanding and informed CIBIL that he was a defaulter, without giving him a notice.

The bank had sought dismissal of the complaint against it on the ground that the remedy available was through arbitration only.

HSBC Money Laundering: Govt will probe the matter

India on Thursday said it will “get to the bottom” of the alleged violation of safety compliance by HSBC’s staff in the country against money laundering and terrorist financing as it was “serious” matter.

 New Delhi also said it would seek more information from Washington on the probe by the US Senate’s Permanent Sub-committee on Investigations which found that HSBC’s Anti-Money Laundering (AML) Compliance Department, that included employees in India, was highly inadequately staffed.

 “I think this is a very serious matter and we will get to the bottom of it. We need to get some more information from the Americans. We will get that very soon. This has been worrying us,” home secretary R K Singh told reporters here.

 Singh was reacting to reports that HSBC’s India staff have come under the scanner for deficiencies in their role as “offshore reviewers” of the global banking giant’s compliance to safety mechanism against money laundering and terrorist financing.

 “To tackle this, we have set up a Financial Intelligence Unit,” he said.

 The home secretary said terrorists were using new methods to carry out money laundering to fund their nefarious activities and the security agencies too had to resort to new strategies to catch them.

 “Any financial institution that does not follow the international guidelines set by the Financial Action Task Force makes the entire world vulnerable,” he said.