[cooljai]

Originally Posted by NetfreakBombay

If you see a 200 Rs charge, and don't pay that as protest. After few months bank would "write-off" that amound since it would be too small to recover. It would be something like 8 - 9000 with interest + late fees.

That "write-off" would make you ineligible for any loan for 7 years.

If one is in a similar situation, where you had some late payment fees after you've requested the bank to close the card, and they kept on adding more to it, what would be the ideal course of action?
Ask for a settlement? or go to the ombudsman?
Could someone who has worked with the ombudsman please explain how the process works and how difficult that is?

[mjothi]

Originally Posted by cooljai

If one is in a similar situation, where you had some late payment fees after you've requested the bank to close the card, and they kept on adding more to it, what would be the ideal course of action?
Ask for a settlement? or go to the ombudsman?
Could someone who has worked with the ombudsman please explain how the process works and how difficult that is?

First settlement - And most bank will settle it for some %. But will not give no-due certificate. So, whatever is left out without payment [as waiver] will still be in your cibil report.

Ombudsman - You need to first negotiate/settle/talk with bank. And if that is not satisfactory or they have not responded for minimum of a month, then you can approach here.

Its all online now, and easy. No personal experience, but heard that they usually take max of 2 weeks to settle the case. And 99% you are eligible to pay ONLY the original DUES. No interest or other stupid charges.

[NetfreakBombay]

Originally Posted by cooljai

If one is in a similar situation, where you had some late payment fees after you've requested the bank to close the card, and they kept on adding more to it, what would be the ideal course of action?
Ask for a settlement? or go to the ombudsman?

It depends on when did you ask for the card to be closed. Did you ask for it to be closed before renewal date? If yes, then you need to give a written complaint to bank and escalate to ombudsman after few weeks.

Otherwise, ombudsman can't help much since bank had right to put that charge. They will help you negotiate the amount down. But that would go into CIBIL as "Write off". Same would be the case if you negotiate directly with the bank.

Regarding "Write Off", if you are planning to avail a home loan / car loan in next 7 years; then its an issue (write-off remains on record for 7 years). Otherwise you need not worry about Write-off.

[mjothi]

Originally Posted by NetfreakBombay

Otherwise, ombudsman can't help much since bank had right to put that charge. They will help you negotiate the amount down. But that would go into CIBIL as "Write off". Same would be the case if you negotiate directly with the bank.

Actually, my friend talked with OMBUDSMAN for his case and here is the response.

They have 17 officers resolving 100s of case. Anyway, the max time will be like a month or 2 and not more than that.

They will help you to settle with the bank and also make sure that your name is removed from CIBIL report. I mean, there will be no overdue or write-off message. Yes, bank will provide you with a No-Due certificate too.

This is when you have paid the resolved amount. Also, they 99% make sure you pay the "actuals" and not the added amounts like late fees, interest etc. This is related to the annual fees.

[cooljai]

Thanks mjothi, I have now made the online payment for the report. Will send them the details and let me have a look at my CIR.

[NetfreakBombay]

Originally Posted by mjothi

They will help you to settle with the bank and also make sure that your name is removed from CIBIL report. I mean, there will be no overdue or write-off message. Yes, bank will provide you with a No-Due certificate too.

You report would no longer show "default" but would show Write-Off if bank settles. This drops off in 7 years. RBI circular on June-21-2010 has guidelines on that. Only if amount was reduced to Zero (E.g. if original charge itself was incorrect) it would be removed completely in next feed.

[avimal]

I suggest every one should see his/her cibil report once a while. I was shocked to see an ongoing housing loan of 40 lacs in my wife's cibil report which she has never taken. Following up with the bank curently to clear the matter.

It is good that we can catch such things through cibil report now.

[Oxy]

^^ What???

This is scary man! Good that you checked it, else she would have been blacklisted for not paying that home loan.

Please keep us posted on the bank's response.

[lazybrain]

Originally Posted by NetfreakBombay

You report would no longer show "default" but would show Write-Off if bank settles. This drops off in 7 years. RBI circular on June-21-2010 has guidelines on that. Only if amount was reduced to Zero (E.g. if original charge itself was incorrect) it would be removed completely in next feed.

AFAIK status of "write-off" will change to "settled" on CIBIL report once you negotiate with the bank for a settlement amount and obtain No dues letter. Whatever may be the case "write-off" or "settled", both status are looked at negatively by bank issuing the loan!

BTW i just today obtained CIBIL report (including score). My couple of credit card accounts were settled back in 2008 and the status is reflecting as Settled in the CIBIL report, however my credit score is 823. What does that mean? does it mean that i will not get any loan if i approach the bank. Though my credit score is good (> 800) my credit history was bad for 2 account settled status. Is this good enough reason for banks to reject if i apply for any loan?

Thanks in advance for your replies guys!

[ntomer]

Originally Posted by cooljai

If one is in a similar situation, where you had some late payment fees after you've requested the bank to close the card, and they kept on adding more to it, what would be the ideal course of action?
Ask for a settlement? or go to the ombudsman?
Could someone who has worked with the ombudsman please explain how the process works and how difficult that is?

Ask for a settlement. In 99.99% cases bank will agree to drop the interest/late fees and will settle for original dues.

Originally Posted by mjothi

First settlement - And most bank will settle it for some %. But will not give no-due certificate. So, whatever is left out without payment [as waiver] will still be in your cibil report.

If the bank settles with you, it won't show up in CIBIL report.

[lazybrain]

Originally Posted by ntomer

If the bank settles with you, it won't show up in CIBIL report.

I dont quite agree with this. I had settled Citibank Credit Card and SBI card back in 2008 by negotiating with the bank. The status on CIBIL to date for those accounts shows up as "settled" I even called the bank guys few days back to communicate to CIBIL to remove the settled status and bank guys informed me that if the settled status needs to be removed from CIBIL you need to pay off the balance Outstanding which we waived off after mutually agreeing the final settlement amount.

[ntomer]

Originally Posted by lazybrain

I dont quite agree with this. I had settled Citibank Credit Card and SBI card back in 2008 by negotiating with the bank. The status on CIBIL to date for those accounts shows up as "settled" I even called the bank guys few days back to communicate to CIBIL to remove the settled status and bank guys informed me that if the settled status needs to be removed from CIBIL you need to pay off the balance Outstanding which we waived off after mutually agreeing the final settlement amount.

Strange!!! I had a similar experience with CitiBank where they hiked up an amount of 2000 odd to 68K over 7-8 years. I settled with them for 2K, and it doesn't show on my CIBIL report...

Maybe this is their new policy.

\N

[lazybrain]

Originally Posted by ntomer

Maybe this is their new policy.

My earlier comment was based on the fact that i received my CIBIL report (with score) just today.

This was a big debate previously that banks are blackmailing or rather revenging against the customers who defaulted in the past and based on this RBI wanted to help customers by issuing a notice to all banks stating that if customer had paid settlement amount and banks had issued No Dues letter to customer it means that customer does not owe anything to bank and it cant be reported as settled. However, Bankers argued that if everybody will start defaulting and settling and if RBI asks to forgive them, the entire unsecured Loan folio will be at risk. Thus, the matter got suppressed.

Thus as of now the only option is to pay off the entire amount and pressurize the bank to communicate with CIBIL to remove the settled status.

Also guys, if there are any discrepancies in your CIBIL report you can always file an online dispute on CIBIL website. in my CIBIL report i noticed one credit card account (SBI bank) and the card never belonged to me - It was a gross error on CIBIL part or SBI. But ultimately I as a customer pays the price for it. You can file the online dispute on CIBIL report here: https://www.cibil.com/online/manageC...ialDisputePage

[NetfreakBombay]

Originally Posted by lazybrain

My couple of credit card accounts were settled back in 2008 and the status is reflecting as Settled in the CIBIL report, however my credit score is 823. What does that mean? does it mean that i will not get any loan if i approach the bank.

Your credit score is pretty good. Getting new loans should not be a problem from score POV.

Most probably, other credit lines (Cards and bigger loans like Car/Home) have corrected this issue and have balanced out impact of settlement.

[ninjatalli]

Originally Posted by lazybrain

AFAIK status of "write-off" will change to "settled" on CIBIL report once you negotiate with the bank for a settlement amount and obtain No dues letter. Whatever may be the case "write-off" or "settled", both status are looked at negatively by bank issuing the loan!

If you have an outstanding amount that has been overdue for over a long period (18months I believe), the bank generally has the status "Write-off" on cibil report. However the account is kept open and the amount keeps on increasing as per the interest rate.

If you settle for a %age of the outstanding amount, the bank will change the status to "Settled (w/o)" on CIBIL report (mine shows this for a settled credit card amount)

If you clear the entire outstanding amount & receive the no-dues certificate, then the bank will change the status to "cleared" or something of that sort. If they don't, you can push the bank for the same.

BTW i just today obtained CIBIL report (including score). My couple of credit card accounts were settled back in 2008 and the status is reflecting as Settled in the CIBIL report, however my credit score is 823. What does that mean? does it mean that i will not get any loan if i approach the bank. Though my credit score is good (> 800) my credit history was bad for 2 account settled status. Is this good enough reason for banks to reject if i apply for any loan?

Thanks in advance for your replies guys!

823 is an excellent score. Home/car loans wouldn't be an issue - however if you have any entry in your CIBIL report with "settled" status, do clearly mention the case with details of settlement to the bank.
In my case, even though my score was a low 652, my car loan was cleared by HDFC - I had mentioned my credit card case with all details - (thanks to advice from a friend who used to work in HDFC), that served the purpose.

With a score of 823, it shouldn't be a problem at all for you!