NEWS & ADVICE : CREDIT CARDS
Recovering dead man’s dues
By Ankit Sharma
May 22, 2008
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In yet another case of harassment of banks, a consumer court has penalized and ordered two multi national banks to pay a 11/7 widow for the accident insurance money she was entitled to on her husband’s death.

Two months after her husband Vithal’s death in the serial blasts that ripped through a first-class compartment at Borivili station, Kavita Choudhary, 35, started getting calls from recovery agents working for ABN-Amro Bank and statements from HSBC, demanding payment of outstanding dues on her husband’s credit cards. Vithal, an engineer with Western Railway, was the sole bread earner for his family.

Kavita, in deep shock over the blasts, was perplexed by the banks’ persistent demands. She had already destroyed her husband’s credit cards and had sent a copy of his death certificate to the banks within a month of the tragedy.

"I kept trying to tell them that the person who owned the cards was dead. Yet, they insisted that I pay the outstanding amount," said Kavita.

Kavita was aware that every credit card owner was insured against accidental death. According to her lawyer, Uday Wavikar, ABN-Amro and HSBC owed her the insurance cover provided for in the event of accidental death of Rs5 lakh and Rs4 lakh respectively.

On contacting HSBC, the bank replied in a written letter, informing her that the personal accident insurance cover was only for road and air accidents and did not cover death in a bomb blast. ABN-Amro, whose insurance bank is ICICI-Lombard, changed track and asked her to settle the insurance amount to just Rs1 lakh.

Kavita’s valiant efforts to stop the banks went and in vain and in January 2007, a harassed Kavita with the support of her father, Vinayak Latkar, 68, moved the Bandra Consumer Disputes Redressal Forum against both ABN-Amro and HSBC. However, in spite of repeated communication by Kavita, both banks refused to participate in the court proceedings.

Reacting very strongly against the actions taken by the banks, on February 14, the consumer forum ordered HSBC to provide the insurance cover with interest, plus compensation of Rs.40, 000 and costs to Kavita. "The bank, which is reportedly very prompt in taking actions for obtaining payment from customers, has totally ignored its own responsibility. Ignoring this insurance claim of a widow at a young age as a result of violent accident - bomb blasts - causes even more mental tension and anguish," the court said. Earlier, a similar order was passed against ABN-Amro in November 2007.

Arguing Kavita’s case, Wavikar had argued, "Banks should have additional social commitment and sensitivity towards customers. They should not act like private brokers and moneylenders. Such unfair trade practices should be taken up by the Reserve Bank of India."

However, there has been little respite even after the court order. ABN-AMRO was prompt to follow the court order but HSBC still sends Kavita bank statements every month in Vithal’s name, showing late fees and charging interest. "Why do they send statements in a dead person’s name? Just when I try to sort out my life, they keep reminding me of his loss," said Kavita.


(Comments Posted : 1) Post Your Comments
1. This is the visible weakness of the government of india and thelaw enforcement authorities. if the bank has still not settled the card and insurence issue the bank should be fined for a Rs One lac per day and the for all the day since late Vithal’s death day till date. and the bank should be banned from doing any card transactions in India.
Prashant (Posted: May 27, 2008)
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