HSBC directed to pay penalty for not refunding balance on deactivation of credit card

The HSBC has been directed to pay penalty of Rs 2,250 to a complainant for closing his credit card account without refunding him the due balance. The District Consumer Disputes Redressal Forum has also instructed the bank to pay Rs 1,100 as litigation costs.

The complainant, Narender Rana, a resident of Sector 35, got the credit card from the bank and was renewed in July 2008 with a limit of Rs 21,000 and expiry date was of August 2011.

He alleged that the renewed card never became operational and the bank closed the account, without giving any reasons

The complainant also informed that he had used his credit card for booking a flight ticket from Chandigarh to Delhi on April 25, 2008 (before the renewal of the card) and had paid Rs 2,379 for it. As the flight was cancelled, the Airlines gave a refund of Rs 2,250 was to the credit card account of the complainant, which could not be added to his account as his card was not operational.

He got up set therefore he moved the consumer forum.

In its reply, the bank stated Rana had never been a fervent user of the card and that he scarcely made transactions with the card.

The bank said the complainant was already informed that if the said card was not used for any transaction up to June 30, 2008, it would be closed. As the complainant did not use the card within the set period, his card account was closed and a letter was duly sent to him vide dated May 29, 2008.

Also, Rana was asked to contact the bank officer for the withdrawal of the amount lying in his credit card account, but he never turned up to meet the concerned official, maintained the bank.

But the forum, said at the time of deactivating the card, the bank should have immediately refunded the said amount of Rs 2,250.