Consumer issues brought to the fore.
I have a personal loan, credit card and current account with salary transfer in RAK BANK. I had been making all personal loan installments and credit card due payments well in time. In April, I was approached by RAK BANK sales personnel for Balance Transfer facility which RAK BANK is offering free of interest or any charges. Since I knew the bank's tendency of unnecessarily charging the customers without any justification and referring to some 'xyz' terms and conditions, I was not convinced and did not go for it. But due to a lot of insistence and assurances that there will not be any issue, I agreed to take Dh9,000 as Balance Transfer. I was informed that minimum of 3 per cent of loan amount has to be paid each month and has to be completely repaid within 3 months. It is interest-free and no charges for this. I made the payment for settlement of my credit card during April with Dh3,000 as a first installment of Balance Transfer and an additional sum for my credit card purchases within the due date. Before making this payment, to avoid any finance charges, as a precaution, I did call customer care and the above sales personnel to check if I have to mention anything to the bank on how to adjust my payment so that wrong settlement does not take place and I am not being charged unnecessarily. I was informed by both that there will not be any issue. Payment has to be made in a normal manner without any remarks and will be taken care of properly. First payment went correctly. In the same month of April, since I was about to go for vacation, as a precaution, I checked out for my purchases from customer care and made that payment for purchases so as not to default. I was stunned and shocked to see finance charges in my May statement. Upon enquiry from the sales personnel, she confirmed it was a mistake and would definitely be reversed. But I needed to make an official complaint in customer care. Although I was extremely furious about this, since she promised me to take care of it, I lodged an official complaint for this reversal. It was reversed and I was informed that my payment first goes for settlement of credit card purchases and then balance goes for Balance Transfer repayment. Since I knew that I am making a payment in settlement of my purchases as well as Balance Transfer installment, there was nothing to worry. But June's statement, again, reflected finance charges, which I referred back to the sales personnel and she again promised it was an error and that I needed to lodge a complaint. I did the same, once again. But most surprisingly, it got rejected. After that, sales personnel stopped taking my calls. Upon asking the reason from customer care on this, I could not get an adequate reason. Getting frustrated, I lodged a complaint on RAK BANK internet banking. After a few days, I received a call from its representative stating that the date I made the pre-payment, their system did not reflect any outstanding purchases because their system did not generate credit card statements. As per their system, since there were no purchases, my complete "early payment" during April went for clearing the Balance Transfer instead of credit card purchases. Although I stated I cannot be expected to know how a bank system has adjusted my payment, she informed me that during previous call to customer care I was informed that my payment, first goes for settlement of credit card purchases and balance to Balance Transfer settlement. I replied that I had purchases to be settled. By making pre-payment for purchases, I settled my purchases before going for vacation. But she mentioned that as the system did not generate credit card purchase statement, as per their system, there are no purchases and the payment was completely adjusted against Balance Transfer. I was shocked on hearing this. As an outsider, I cannot be expected to know that, for RAK BANK, a purchase is not a purchase until a credit card statement is generated. But for me, once I spent money, it was a purchase, which I settled. Further, I have made all payments correctly within due date or much early - both Balance Transfer as well as purchases. It's just a matter that due to its internal policy or system working it was adjusted to Balance Transfer instead of purchases. Hence it's just a matter rectifying that adjustment. Anyway, bank cannot expect an outsider to know how their system works. But all my efforts went unheeded. Even subsequently, RAK BANK senior customer care staff spoke to me but I understood that regardless of the fact that I acted genuinely, in complete compliance, proactively, with utmost care and due diligence, they completely made up their mind to not reverse these charges. It seems as if they pre-planned in such arrangements of Balance Transfer to somehow charge the customer to cover cost of free Balance Transfer. I shall highly appreciate Gulf News assistance to resolve this issue.
From Mr Subhash Chaurasia
Mr Ian Hodges, Head of Personal Banking, RAK BANK, responds:
Thank you for giving us an opportunity to justify our stance on the issues raised by Subhash Chaurasia, RAK BANK customer.
Please note that the customer had availed of a Balance Transfer Promotion with RAK Bank in April 2012 and had queries on the calculation of Finance Charges. Chaurasia was informed about the payment allocation by our staff in this regard.
Since the customer made a prepayment which settled the promotional Balance Transfer in his April 2012 statement, Chaurasia's May 2012 Finance Charges were reversed by the Bank as a service gesture.
Subsequent to this, the customer's May 2012 Credit Card outstanding was not paid in full due to which Finance Charges were levied on his June 2012 statement. Prior to the receipt of your email, we have informed Chaurasia on the reason for the Finance Charges levied.
Mr Chaurasia responds:
I very much appreciate the intervention. I do not know if RAK BANK authorities do not understand my point or are knowingly bypassing that point and talking about other matters. The point is - I made a pre-settlement of my "purchases," which was taken by RAK BANK system as settlement of Balance Transfer. The reason was, for RAK BANK system, if the credit card statement is not generated there is no "purchases" in their system, whereas for me, once I made a purchase, I have to make a payment, sooner or later, which I paid sooner than later. Instead of thanking me for that, RAK BANK, as per their system took that settlement against Balance Transfer and still saying my purchases are unpaid. Hope to receive RAK Bank's reply on the above point exactly and not just simply saying that purchases are unpaid. If that was the matter there was no issue.
Mr Hodges, RAK BANK, responds:
Please note that the payment allocation was explained to the customer when the Promotional Balance Transfer was offered to him by our staff. Since there were no retail purchases outstanding on his Credit Card, the Promotional Balance Transfer was settled by the payment received on the card.
In view of the above, we are unable to reverse Finance Charges levied on Mr Chaurasia's Credit Card in June 2012 and our stance on the matter remains the same.
Mr Chaurasia responds:
Thank you to Gulf News for the efforts with this regard. My issue still remains - their system says a purchase is purchase only if it is in a system generated credit card statement, whereas for me since I made a purchase, it is outstanding in my credit card and I made payment much in advance for my purchases. RAK BANK is not answering on this specific point. Just talking about not paid for purchases and informed about the method of settlement. They are not talking on this specific point because they understand they are wrong only on this point and the crux of the whole matter is this point only. Otherwise there is no issue.
Mr Hodges, RAK BANK, responds:
As clarified in our previous letters, the client was aware about the payment allocation at the time he availed the Promotional Balance Transfer. Further we have also clarified the matter to him prior to his email to Gulf News. In view of the above, our responses provided to Gulf News remain the same.
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