Consumer is King » Extra Charge

Airline charges extra for child, told to compensate

ashish — Fri, 27 Nov 2009 21:08:44 +0000

Quite a few times, consumers get stuck in the dispute around being promised something when they are placing the order; and when they go for delivery, at that time, they do not get what was promised. This can cause them great inconvenience, and also expense; and it is at such times that consumer forums help hapless consumers get justice. For example, in this case, this family was promised that their child will be given an infant ticket even for a journey where the child would no longer be an infant as per age, but since the round trip was started earlier, such a concession would be available. However, at the time of the trip, the airline refused to allow such a concession causing additional expense and lots of inconvenience (link to article):

District consumer forum penalized Air Canada on Wednesday for deficiency in service and causing mental harassment to Sector-43 resident Inderpreet Kaur. The airline was directed to refund Canadian dollars 632.98 to the complainant and pay Rs 5,000 as damages along with Rs 2,000 as cost of litigation as it overcharged for the ticket of her minor son Jaideep.
Their two children were to accompany them. She stated that Jaideep was less than two years old at the time and they paid the fair for ‘infant’ category in his case. As Jaideep’s birthday fell on June 17, he was to become ineligible for the low-price ticket during the trip. Kaur said the travel agency was told about this and the staff there informed her that Jaideep would be allowed to travel on the ticket even after he attained the age of two as the round trip was to begin when he was an infant.

Banks setting limit on withdrawal from other bank ATM’s

ashish — Mon, 12 Oct 2009 06:08:12 +0000

On April 1, 2009, the RBI brought in a move that was supposed to remove the restrictions on using the ATM’s of other banks. Before this move, if you wanted to use the ATM of some other bank, then it would cost. These would include a direct to the customer for checking account balance, or for withdrawing cash, and could have gone upto Rs. 50 in direct charges. Removal of this limit was a major benefit to customers, since you could now go and access any other ATM. So, if you are out shopping, and run out of money, you would not have to search for the ATM of your bank, instead all you have to do is to find the nearest bank and use the ATM, and all this free of charge. Banks were not too comfortable with this measure, but given that this was an RBI Directive, they went ahead. However, this was free only for customers, the banks still had to clear expenses among themselves. So, if you were an ICICI customer, and wanted to use an ATM of SBI, there were some expenses that the banks would have to bear.
Also, banks that that had huge customer bases and were finding that their ATM’s used to remain busy were obliged to keep on expanding the number of their ATM’s; which is why banks such as SBI and ICICI have a large number of ATM’s, while smaller banks such as Yes Bank, Deutsche Bank, and many others have a much smaller number of ATM’s. By allow customers of these smaller banks to access the larger networks had 2 associated problems:
- It would have some negative effect on the load of the ATM’s of the larger banks
- It would remove the competitive advantage of the larger banks in terms of a much wider and easy availability of the ATM network compared to smaller banks
As a result, there was a push by the Indian Banks Association to add some constraints to this availability of ATM’s, and from October 15, there would be some restrictions on this service (link to news article):

From October 15, a customer can take out a maximum of Rs 10,000 per withdrawal from ATMs not owned by the bank in which he has an account, and the number of such transactions would be limited to five a month.
Going by the IBA guidelines, a savings account holder may get five free third-party transactions a month and could be charged from sixth onwards. However, current account holders might not get any free third-party usage.

For customers of banks with a much wider ATM network, this may not make much of a difference, but for people having accounts with smaller banks and who have got used to being able to use other ATM’s, this restriction may bite (for example, somebody who has got an ATM of another bank right next door). Personally, I have never had chance to use the ATM of another bank, so may not matter much to me.

Changes in the way telecom tariffs are currently being calculated

ashish — Fri, 09 Oct 2009 12:42:04 +0000

Indian telecom tariffs operate on what is called as the pulse plan, which is typically pegged to minutes, and call rates are based on these pulses. So, for example, if the pulse rate is pegged to 1 minute, then whether you speak for 5 seconds, or whether you speak for 55 seconds, you will get charged the same rate. This helps telecom companies since they get more revenue, after all, if a number of calls are closer to 10-20 seconds, and you get charged for a minute, then they earn more. Not many people have really felt that they could challenge this policy, even though this is equivalent to charging the customer extra. However, one of the companies in the telecom space decided to try to be different, and they have come out with a plan where you can get charged with a pulse plan of 1 sec, so you are literally charged only as much as you speak.
And now the telecom regulator has got into the act. It has tried to address this customer issue, and advised that it will make a recommendation that all the telecom operators need to follow. Given that this will be a revenue loss for the operators, they are hesitant to follow down the path of offering a plan to their customers that allows customers to select the option of having a per-second plan (link to article):

Despite rumbles of discontent by telecom operators and the tanking of telecom stocks over the past few days, Trai chairman J S Sarma on Thursday confirmed he was examining the feasibility of bringing in a direction, making it mandatory for service providers to include a ‘pay-per-second’ tariff plan in their bouquet of plans. “We will issue a consultation paper on the matter in a month,” he said in a hurriedly convened press conference.
Clarifying the meaning of “mandatory option”, Sarma explained that it will be mandatory for the operators to offer at least one such plan, but optional for the consumers on whether or not they wish to subscribe to such a plan. However, Sarma said operators would be free to determine the rate that they charge per second.

Operators are taking the argument that TRAI need not intervene in matters of plans and tariffs, and that the high level of competition in India has meant that market rates in India are among the lowest, but many of these lower tariffs were also the result of regulator involvement over the years.

HDFC Bank fined for ‘extra charges’

ashish — Sat, 16 May 2009 07:14:13 +0000

Normally, dealing with banks is a hot and cold affair. When you have dealings with ATM’s and with over the counter in branches, things are fine normally fine. But when there is something that is out of the ordinary, that is when people have more complaints. This could be when there are some delays in credit card payments, or a person is on the edge when qualifying for a loan, or when there is some problem in making the loan repayments. In such cases, it is hard for bank customers to understand all the charges that a bank levies as penalties or extra charges, and this could lead to banks sometimes levying charges that are more than normal.
Consider the following example when a person had bought a motorcycle on loan from HDFC Bank, and was unable to pay some of the installments on time; he was unable to understand some of the charges levied by the bank and filed a case in the consumer forum against these charges (link to article):

Sending a clear message against unfair trade practices, UT consumer forum directed HDFC Bank to pay Rs 25,000 as compensation and Rs 5,000 as litigation cost to Panchkula-resident Sohan Lal. The bank was also asked to issue a no-dues certificate (NDC) and overhaul its client’s account. Consumer forum’s decision came in the wake of allegations laid by Lal stating that the bank had asked him to pay exorbitant bouncing charges.
Holding that the bank adopted an unfair trade practice of charging exorbitant bouncing fees, the forum held, “The bank did not place any document to suggest if it was entitled to charge Rs 400 as bouncing charges.” The forum stated it was not clear that under what provision of law or agreement the bank was fleecing the complainant. “It is very unfortunate that banks are fleecing those who take petty loans for their basic needs,” it stated.

The problem described in this article is something that a number of people have faced when dealing with banks; some fight it out with complaints and a determined quest to ensure that they are not cheated, others don’t fight it out and accept whatever the bank ordains for them – in either case, it is still incumbent on consumers to not take any extra charges lying down.