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Old 20th August 2009, 23:10   #1
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Default Procedure/experiences in filing case with ombudsman (Bank: Kotak)

Guys,

Need your support, and the power of the tBHP network effect here.

I have committed the cardinal stupidity of choosing Kotak Mahindra bank home loan over HDFC. The offer was too good to be true and I am now repenting for the same (around 0.25% lower)

Below is the major issues:
a. They added on Life Insurance (with ONE time premium option only - even the form allows for monthly but they didn't let me fill that) which was added onto my EMI. I was FORCED (as the agreement was expiring) to sign the forms as they said it was absolutely required for loan disbursal THOUGH on receipt on my sanction letter, it didnt contain any such condition precedent.

Then at the last minute, on my vehement protests, I was told VERBALLY by their area manager that it has been waived off, but it wasn't. My signed insurance form wasn't returned back to me, and then the insurance was activated.

Impact: 1.07L, loaded onto the EMI.
(Basically, in the event of my death, home loan is waived off to the extent of the insurance by the bank - so they are not happy with selling me a secured loan - they want insurance on that as well)

b. They have levied commitment charges on me (I am looking at 2% on about 4-5L or about 10k). At the time of signing, I said what are they - they said don't worry you won't attract any such charges. And bear in mind that I was fighting the insurance mentioned above (pt a)

The beauty is that at their convenience (when they realized that sanction > amount actually required) they reduced the sanction just before the actual transaction (I signed a sanction on Jul4, then on Jul9). At the time of the transfer, there was a big mess over a different issue and I just signed whatever sheets were there - I distinctly remember not being told of the exact commitment charge rate.

Impact: 10k, cash.

Now basically, both places, they have signed documents from me.

But both documents have come into existence as a result of misrepresentation from the bank's agents. I have already lodged an email complaint on July 31. All they are saying is that you signed, now you pay as we say.

Now I wish to file it with ombudsman in September. Want your advice/ experiences so that I can:
a. Evaluate my realistic chances
b. Build a watertight case

Once the case is settled, will share factual data and learnings with the BHPians as well so that no one else goes through the sheer misery and torture that I am going through.

I would personally recommend HDFC anyday. My friend bought his builder floor at the same time. Whatever I saved in a fantastic deal on the house has been lost in the above charges to Kotak.

FYI, regarding other banks:
DPB also has a variant of commitment charges in their agreement.
LIC has a clean agreement but there is a value of service.
HDFC has the cleanest loan agreement and no hidden charges in the business.
SBI has a 8% offer, that is 0.5% higher than others, from second year onwards.
Axis bank has competitive rates, but asks for 20% downpayment.
Sarkari banks have higher rates and 20% min downpayment.

Three key learnings:
a. Always see/study the loan agreement. I was so busy bargaining for rates, that I didn't read only kotak's agreement.
b. If a BANK has a too good to be true offer, its probably a farce.
c. Anything they have promised - get it on email. Else treat it as a white lie.

There's a devil in the details
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Old 20th August 2009, 23:30   #2
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I think you may have a case against Kotak for misrepresenting the terms of insurance, and take up the matter with IRDA, who is the insurance regulator.

In case you have not yet received the policy papers, you have another option of asking for the cancellation of the policy within the 15-day look-in period, which is mandatory under Indian insurance laws.

If you have not received a copy of the loan documents, you can protest that Kotak put undue pressure on you and coerced you to sign the papers without allowing you to see the fine print.

The only problem with all this is, you also threaten to foreclose the loan - in which case you must be ready with another loan company ready to take over the loan. And Kotak must be compelled to waive foreclosure charges, if any, and refund you the processing charges, if any.

Write in all the financial forums that you see about Kotak playing dirty - damn them so that no customer will touch them.

Send a copy of your complaint to all media - internet, printed media, etc - maybe someone will take up the matter, even without any active intervention on your part. Don't forget to send a copy to every another house loan company you may have met. Nothing like a competitor to advise you on how to get back.

See if you can also approach a Consumer Forum.

Under the MRTP Act, you can also protest against a "tag-along" product (called Tied selling practice) which means that Kotak has compelled you to buy another product which you don't want (in this case, the insurance policy). This amounts to a Restrictive Trade Practice (RTP), which is not permitted under MRTP Act.

But before all that, write a no-nonsense letter to Kotak, asking them to take corrective action (either cancel insurance policy or alter terms to what you want) and question them on unilaterally changing terms without your explicit consent. And threaten them with suitable legal action.

And there is no point in talking to the front office guys in Kotak - they are the marketing guys who have no idea/ botheration about customer complaints like yours, because they may not even appreciate the legal implications of their own act. You must find a suitable higher-up (say, the legal head, or the business head) to take up the matter with them.
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Old 21st August 2009, 00:40   #3
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First step: Make sure you document all your correspondence with Kotak properly. You need to give Kotak one month to reply to your satisaction before approaching the Banking Ombudsman.

Now if the complaint isn't resolved satisfactorily, go to RBI's site and click the link to Bankng Ombudsman (BO).

Reserve Bank of India

Click on the complaint form link and submit as detailed a complaint as possible. A complaint number would be generated and the BO would forward this complaint to Kotak. A copy of the same would reach you as well and you will need to make three copies of the entire set of documents (including complaint forms and supporting documents). Once this is done, you need to submit the same at any RBI office. The RBI office is on Sansag Marg in Delhi. Just drop in your set of documents and take a set back after acknowledgement. And let the BO work its magic.

PS: I successfully claimed penal interest @ 12% per annum from SBI on a cheque which they lost and could not trace for best part of six months, all thanks to BO.

Best of luck in your efforts. These goons need to be taught a lesson that we consumers are aware of our rights and would not be beaten into submission. Feel free to call me in case you need any help.

Last edited by nkapoor777 : 21st August 2009 at 00:43.
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Old 21st August 2009, 06:43   #4
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Thanks guys.

HVK ji - have sent follow up emails as discussed.

NK - ah lovely. Just the kinda experience I wanted to hear from BHPians.

Personally, I am quite hopeful of atleast getting the insurance cancelled with minimum damages since the government had come down hard on these kinda practices!

Plus, there was total misrepresentation of commitment charges in my case. They conveniently reduced the loan at the time of the transaction - what they neglected to convey was the commitment charges. Plus, they even asked me what the registration charges would be - what they didn't bother to ask either developer/me is when it would be registered - the current wisdom says not a day before 2011. Had they given me a clear understanding (I was not intimated of the 2% number till the agreement copy came to me via courier), I would've gladly asked for a smaller number.
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Old 21st August 2009, 09:39   #5
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Say yes for the insurance thing. They will help and clear forms etc.
When the insurance docs come, return them immediately (within 15 days) canceling the insurance.
Thus you get the sweet deal as well as ensure that you are not forced with what you dont want.
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Old 21st August 2009, 10:18   #6
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Lot of policies/accounts are being mis-sold by executives whose sole intention is only to meet target and obtain incentives or face the flak of managers. So they stoop down to false promises.

I wanted to take a medical policy from IFFCO-TOKIO for my wife , so they had sent an executive. The executive stressed on the point that married women cannot take a policy for themselves only, even the husband should take one ! What utter BS.

I laughed on his face and called the company in his presence and told them how their executives were bluffing to sell the policies. They made a note of te executives name and promised to take action and offered me a 5% discount for my wife's policy.
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Old 21st August 2009, 10:56   #7
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Please follow HVK's advice.

Please write to IRDA immediately. And if you are yet to be given your policy document - mention that - since the 15 day "free-look" period starts from the date of receipt of the policy.

While giving reasons be very specific - that you were coerced and misguided into buying this - that nothing was explained to you and the terms are not acceptable, etc etc etc. IRDA has been very very specific about these practices - and the company will have hell to pay.

Secondly - write to Uday kotak (- I had an email id somewhere ...) claerly telling him the same things and asking for his help in closing the loan etc. I have known him to be very proactive in these matters.

Please ensure you keep to time lines and ignore any/all promises made - written or oral.
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Old 21st August 2009, 13:00   #8
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Please send me Uday Kotak's email ID.

I have further ammo against these buggers.

PS: Whenever you deal with a banker, always pay by cheque - even for stamp papers. Let the buggers know that they are being caught out.

Last edited by phamilyman : 21st August 2009 at 13:05.
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Old 21st August 2009, 13:13   #9
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I bilieve best option is what kumar has suggested. Write to BO & make lots of noise. Apart from that you may also meet the sales executive's senior and give him some piece of mind.

I was very clear about the Kotak internal mismanagment since i recieved my crossed checks from them even without even closing my loan account. Sincerely waiting for the time when I'll close the account and ask them to return my checks.
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Old 21st August 2009, 13:57   #10
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Kotak is really going crazy. Yesterday I checked a hardly used Kotak Savings account and saw charges of over a 1000 rs for non usage. This account was opened under a promotion and was supposed to be lifetime free with no charges.

I gave them a dressing down and asked them to call me and reverse the charges.

I have been having issues with the car loan as well as they cant find one EMI (which has already been taken) and keep harrassing me for it.

HVK sir has given perfect advice. Do follow it up and all the best.

Last edited by sammyboy : 21st August 2009 at 13:58.
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Old 21st August 2009, 14:43   #11
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Phamilyman,

Sent you a PM , check and revert.
I might be able to help you on this issues.

No matter how you are sold this policy you can always cancell it with 15 days of the policy issuance. so don't waste time.
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Old 21st August 2009, 15:15   #12
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All these bank's are now doing the same thing. You never know what charge you are going too get. This is how I think they are running the show and showing profit to Investor/Share market. I suggest to close down all the un-necessary acc that are running in your account. And also close the CC. I had a CC of SBI which I closed a year back with 0 balance, now they are sending statement with 1K as outstanding :(
Dealing with bank In india are still not a easy job. They have their own law and regulation,
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Old 21st August 2009, 15:37   #13
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Hi,

Am not too sure of options open to you. Checked their website and it has 2 options listed - Complaint form and Grievance redressal.

They have listed the Nodal officers incase the branch is not able to solve your query. Copy pasting this from their site :

" In case you do not receive any response to your issue within 10 working days or if the response received is not satisfactory, you may escalate the matter to the Nodal Officer for Retail Assets. The contact details are as follows:

Nodal Officer: Ms. Jyoti P Bhojwani
Address : Kotak Mahindra Bank Ltd. Kotak Infiniti, 4th Floor, Zone I Bldg No.21, Infinity Park, Off. Western Express Highway,
General AK Vaidya Marg, Malad (E) Mumbai - 400 097
Telephone No: +91 22 6605 4670
Fax No: +91 22 6725 9067
E-mail: nodalofficer@kotak.com "

You may also visit the regional seniors offices and put across your case.

My take is visit to the concerned branch / seniors should help rather than putting up a complaint as a mail ( unless you've marked it to Uday Kotak or some seniors).

BTW - clicked on the service charges and fees link there, it just doesnt open

All the best....
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Old 21st August 2009, 16:14   #14
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Phamilyman, Welcome to the ugly world of Kotak. If you remember, when I had applied for a Personal loan in december 08, they approved the loan amount (2.5L) and out of which they would release only 2L and put the remaining in Kotak approved funds. Also, they wanted to sell me the insurance. After a lot of process and threats to cancel the accpetance of the agreement, They released the amount of 2.5L but still slapped the insurance.

All I'll say is all the best with your fight.
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Old 21st August 2009, 17:10   #15
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@amtak:
ah ha

I had not followed up your thread after the original posts. I'll fight it tooth and nail. What is in my favor is that I had written them an unequivocal mail that I shall not accept insurance unless it is FORCED. So their whole case is shut!

@Bapu: Ms Bhojwani has been getting my emails since 31st July

@leadfoot: Cancellation is happening on Monday/Tuesday depending on client timelines. I am a consultant you see :(

@ash: I have no time in my life to fight!
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