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Reader Questions: Credit Card Overcharge


Reader PB asks over email:

  • Apart from Interest, ICICI Bank Credit Card Statement always include Service charge and Insurance charge. Is it right for the Bank to charge me these items though I have not signed any insurance form?
  • One fine morning I found that Reward Point 2500 accumulated with ICICI Credit card  became Nil . Is their any rule that reward points are time bound and needs to be reimbursed with in a particular period? Please enlighten.
  • I received a Credit Card from Standard & Chartered Bank thru courier though I have not applied for it. Never swiped even for once. After a year  Bank  sent me Bill for 1600.00 on the ground of not using the card.  Can such amount charging for unused card is legal? What steps I can take to withdraw this amount.

The answers:

  • Service Tax is applicable on bank fees and interest. But there is no need to pay an “insurance” amount unless you know what you are insured for. Call ICICI and get the charges removed – if the call center will not help, then please email their grievance officer. The insurance will stop, but what’s the point if you don’t even know what that insurance is.
  • Rewards points can lapse, according to individual card or bank policy. There is no regulatory framework that restricts points from lapsing. You have the right to ditch and move to a different card.
  • First, you should never accept a card that you have not applied for. Cut up the card and call SCB saying you have never applied for it, and therefore you have thrown away the card, never using it even once. You should have done this the minute you got the card, but since you have not used it even once you can state that the card was never used. Their call center will help you reverse charges and cancel the card. If they don’t you should again escalate through either their complaint form or by emailing

Hope this helps. I’m not an advisor, and some of the above may need legal help if it gets dirty.

Note that this may affect your CIBIL credit score, so maintain a copy of all your correspondence in case the banks refuse to correct their mistakes or misreport to CIBIL. Your next choice is the RBI Banking Ombudsman, but you can only use it 30 days after you officially complain to the bank and they don’t resolve it.


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