Mr. Singh owned his first credit card when private banks started providing it for an annual fee and the credit card usage was growing in online and offline market. However with the passage of time, banks turned themselves into “one – stop shop”; offering variety of products and services like utility bill payment, investment management, insurance, credit & debit cards so on and so forth. Mr. Singh has an account with a public sector bank which offered credit card without any annual fees and higher credit limit than previous card. One day he received a call from the card company offering him ‘protection insurance’ of Rs.
6,00,000/- at a nominal premium of Rs. 47/- approximately as an add on service on the card. The insurance primarily covered death/disability due to accident. He accepted the offer and paid the premium regularly. Meanwhile many banks started offering ‘card-on-card’ facility, with different schemes. Now he had almost four of them but he seldom used any of his cards for making his purchases. A year later, Mr. Singh received another call from the card company and he was offered ‘Suraksha Plan’ (The plan was specifically designed and delivered by the bank’s insurance arm to its credit card holders).
The plan offered cover of Rs. 3,00,000/- for 5 years, double personal accident cover on death, required no medicals, age proof or salary slip and claim acceptance was guaranteed. The premium of Rs. 2,565/- was to be paid only once and further provided for flexi-pay option in which the amount could be paid in easy installment of 12 months (Rs. 235. 12/- approximately per month) and the premium paid was eligible for rebate under Income Tax Act. The plan was in addition to the existing ‘protection insurance’. The policy documents were to be delivered within 21 days of acceptance. Looking to all the benefits Mr.
Singh accepted the policy with flexi-pay option and paid his first installment that was debited on his credit card. Before paying the second installment, he called up the card company to inform them that he hasn’t yet received the ‘Suraksha Plan’ documents. The customer service representative (CSR) took his complaint and assured him that he would receive the said documents very soon and he should continue paying his premium installments. Two weeks later, Mr. Singh called up again at the call centre number of the company and after holding the line for almost 10 minutes; he was connected to CSR and told the him the problem and the promise made by the CSR in his earlier call.
His call was transferred to the insurance department, which insured him that he would receive the documents within a week’s time. The wait turned out to be futile and the third installment was due. One day he was visiting his bank and bought the matter in knowledge of the local authorities which assured him to look into it and do the needful. A week later he again called up and this time it took him 12 minutes to get to CSR and narrated the entire incidence again and again got the promise to get the document within 4 working days.
He paid the third installment. He received his statement showing the fourth installment due. Called up the company, repeated the same story but this time he noted the date, time of call and name of CSR. He was informed that the company had sent the documents to the address that was available (i. e. Current billing address). He checked from his local post office and his wife about the document and called the next day to inform that no documents were received till date. The CSR told that he would report the matter to seniors and would arrange for resending the documents. Mr. Singh kept on calling and paid fifth installment.
One day while returning from office he realized that his wallet was missing which contained some cash and his card. He informed the company about the incidence and his card was blocked. He was requested by the company to lodge a complain of card loss in the nearest police station as well which he did the next day and preserved the copy of same. ****The case is meant for classroom discussion only and does not imply any good/bad management practices**** Despite of many calls made, he got only one thing from the company – promise and being frustrated by this he stopped paying his further installments.
After one and a half month he received a letter from the company requesting him to clear his dues. He called up, told them the entire story and expressed his willingness to pay the due installments only after he received the policy documents that he has to submit in order to obtain the tax benefit and again was requested to wait for 4 workings days. He also requested the company to cancel the ‘protection insurance’, which was done. He had decided to stick to his words to pay further premium only if he receives the documents. Two months later he received a call from the company’s local recovery office regarding his dues.
He told them the entire incidence and emphasized that he has lost the card on which the policy was issued (Policy terms not applied to ‘Defaulting Cardholder’ – i. e. Cardholder who has failed to pay the premium for the cover and /or has failed to pay the minimum amount due for three consecutive billing periods during the period of two year, commencing from the date when the premium amount for the cover is first charged). The local office called him twice and assured him that the matter will be reported to the head office and then the calls stopped.
One evening he received call from company’s Chennai office which offered him a replacement card in lieu of the lost card, to which he refused. In his conversation with the calling officer he narrated the entire incidence and the officer promised him that this is a fresh card and the dues of the lost card (which were the unpaid premium installments) would be reversed and credited back to his account. The replacement card was delivered within 21 days and in the statement of his lost card that he received 2 days later continued to show the dues.
He again called the Chennai office, reminded them of their promise and vehemently told that he won’t pay for the policy he never received and now he was no more interested in receiving the policy as the assessment year for which the policy was meant had already gone. Unsatisfied with the response and looking on to the regular statements of dues he decided to take the matter further with senior officers. He mailed to head – cards telling them what all had happened till date and asked for the refund of his partly paid premium.
Two days later he received a full page length reply by Mr. Bharti, AVP- Customer Service; in which he has written almost the same language that his department has been responding Mr. Singh till date and promised him that he would send the policy documents as soon as possible and requested him to clear the dues as the policy look up period was 30 days only (i. e. Within 30 days of the policy acceptance, the customer (if he/she wishes) can cancel the policy and get the money paid ( if any) towards the premium refunded). Mr.
Singh’s asserted that this look up period neither was told to him when he was offered the policy and nor during subsequent conversations of almost 1. 5 years with the company. He also mailed him the scanned copy of the report he had done with the police station after the loss of the card and requested Mr. Bharti to reverse the charges levied on him and refund his money. One day he finally received his policy documents which were of no use now. The conversation with Mr. Bharti went on for days and every time Mr. Singh strongly put his point and demanded refund.
Looking onto no positive response he stopped sending emails to Mr. Bharti. One afternoon he received the statement of his card in which all charges levied till date were credited back to his account, making his total outstanding zero but didn’t had any refund of his part premium payment. Two days later he received a call from another card company which offered him critical illness and death benefit of Rs. 14,000,00/- at a premium of couple of thousand rupees to be paid in easy installments and tax benefits moreover! ****The case is meant for classroom discussion only and does not imply any good/bad management practices****.