24 June,2009 08:44 AM IST | | Madhusudan Maney
Banks are playing dirty even with merchants. Shopowners allege that they refuse to pay up despite the swiping machines approving credit card transactions Cash only: Anil Kumar of Anil Jewel Paradise has now stopped accepting cards
Several shopowners are complaining that banks don't pay them for purchases made using credit cards on the flimsiest of reasons.
MiD DAY has lined up a few cases where banks have put on hold transactions worth lakhs of rupees.
CASE 1: A customer visited Anil Jewel Paradise in Ganganagar and bought gold worth Rs 1.3 lakh through his credit card. But Axis bank refused to pay the merchant saying the card used was a counterfeit.
Anil Kumar of Anil Jewel Paradise said, "If the card was fake, it should have been blocked. Why was the transaction approved? Only when the machine shows approved do we deliver the goods to the customer. How will we know whether the card is duplicate or genuine? When the bank says it's a forged transaction, it is the bank's duty to get back the money from the card-holder, not the merchant's."
u00a0"As per the bank's instructions, we are supposed to verify the card, collect ID proof, get the customer's signature on the slip and tally the signature. We submitted the photo ID, address proof and phone number of the customer. What more does the bank want?"u00a0
u00a0"The amount was reflected in the day-to-day statement but I was surprised to see that it was omitted in the monthly statement. Now, we've stopped accepting credit cards," says Anil, adding that this had happened to several businessmen in this area. "This is nothing but harassment to the merchants," he said.
That was not the first bad experience for Anil. In September 2008, payment for Rs 11,700 was put on hold for the same reason.
"Even after several phone calls, we couldn't get the money back. Finally, on April 13 this year, the amount was automatically cleared but the Rs-1,30,000 transaction was blocked. A week later, our EDC machine was deactivated without notice and the bank sent someone to take away the machine. When we refused to return the machine, they debited Rs 15,000 from our account. Two months later, we still haven't got back the money.
We lost the gold as well as the money. In addition, gold rates are increasing every day," he added.
CASE 2: The same bank blocked Rs 1,14,120 of K K Jewellers, giving similar reasons.
"A customer walked in and bought gold ornaments worth over Rs 1.14 lakh with his credit card. The transaction was approved and the ornaments delivered. We pay 1.6 per cent as service charge every time a card is swiped. But if we do not get proper service from the bank, what is the point? Our EDC machine was also deactivated without notice," says S Rajesh, of K K Jewellers.
CASE 3: Amit Kataria of Aakar Jewellers in Ganganar had to wait for more than two months to get Rs 3 lakh from American Express Bank. "The bank held my money for 75 days in spite of the transaction being genuine. First, they told me the transaction was a fraudulent one. A few days later, they said the card had been misused.
Finally, they said unless the customer pays up, the money will not be transferred to my account. If this is the case, why should the bank issue credit cards to the public? Why do they have to unnecessarily hold on to such a huge amount for so long?"
CASE 4: Another jeweller in the same area, who would rather remain anonymous, said, "A private bank had blocked a transaction for Rs 1,49,300 for two months. I made several calls to the bank but didn't get proper response. Two days back, I told the person concerned that I would go to the media if they didn't pay me. I was surprised to get an SMS within hours saying a partial amount of Rs 83,000 had been credited to my account," he said.
Bank's version
Reacting to Case 1, Shabeer, merchant services executive, Axis Bank, said: "The customer used a counterfeit international card. We asked the merchant to send documents like signed c/slip of the transaction, invoice signed by the card holder, Xerox of the card used for transaction and a photo identity card of the customer.
We have got the documents and have submitted it to the opposite bank (Chase Bank) for further action. It takes a minimum of 180 days to clear the case. Our head office is working on it and getting reports from the opposite bank. In a year, we come across around 500 such cases," he added.
