[alter.e.go]

My dad had an agreement where Citibank would pay our mobile phone bill.
He was naively paying the Citibank bill - where he thought he was paying the phone bill but was actually paying the "minimum amount" on
his card payment which had Insurance added to it.

Now when I came to know of it we intimated Citibank to stop paying the mobile bill. Now they are claiming that we need to pay the whole amount
Ie Insurance amount and late fees et al ( as dad was paying the "Minimum Amount Due").

I need to know what needs to be done in this situation. I know its my dads fault too who should have stopped it right in the beginning and not let it accumulate but now it happened and we cannot got back and change it.

Can Insurance be sold like this ? Does the IRDA allow this ?

What is the best course of action

[sanjayc]

What type of insurance is this? AFAIK, this insurance must be a very small amount which protects against all liabilities on the cardholder/cardholder's legal heirs towards the full outstanding amount, in case of lost card/cardholder's demise.

The other insurance might be some kind of medical insurance which your father may have consented to while signing up, and the yearly premia may be getting deducted in the form of monthly installments. If this is the case, since the banks have a tie up with some insurance provider, and the policy is already on force, you will have to pay the balance premium for the year.

In case of the mobile bill / insurance options, pls check with your father if he has signed any documents opting for these OR confirmed over a telecall (calls are recorded and archived) to opt for the same. If yes, am afraid, you cannot do much. If your father is sure about NOT opting for these things, ask Citibank to provide proof of consent.

One gross negligence that has been done in your case was to pay only the "Min Amt Due"..as a rule, the Total Due shld be paid otherwise, you will get into a debt trap.

[alter.e.go]

Sanjayc - If consent was over the phone ( which would have been archived ) would they also not require a signature somewhere ? Or is consent over the phone sufficient , with absolutely no Insurance documentation.

[ASHISHPALLOD]

Originally Posted by alter.e.go

My dad had an agreement where Citibank would pay our mobile phone bill.
He was naively paying the Citibank bill - where he thought he was paying the phone bill but was actually paying the "minimum amount" on
his card payment which had Insurance added to it.

Now when I came to know of it we intimated Citibank to stop paying the mobile bill. Now they are claiming that we need to pay the whole amount
Ie Insurance amount and late fees et al ( as dad was paying the "Minimum Amount Due").

Can Insurance be sold like this ? Does the IRDA allow this ?

Originally Posted by alter.e.go

Sanjayc - If consent was over the phone ( which would have been archived ) would they also not require a signature somewhere ? Or is consent over the phone sufficient , with absolutely no Insurance documentation.

Yes, insurance on credit card is sold like this and there is no requirement of any sign. when they call to offer the insurance, if you agree, the whole call is recorded.
do you receive any monthly statement via post or email?
if yes, have you checked it regularly?
if no, have you contacted citibank before to complain about non receipt of monthly statement?

[nairrk]

AFAIK, the 'minimum amount' payment is somewhat expensive than attractive because at the end of the day one will end up in payng more money by way of interest. And if you buy anything on the card then the whole amount will be shown as outstanding and the interest calcualted on the total amount.
No need for signature when one agree for Online Insurance, but you should get a statement for the amount you will be paying?

[alter.e.go]

Yes we do receive monthly statements, thats how I came to know of it, when I checked my dads statement.
In the first statement when dad saw this amount he intimated Citibank to have it removed, but could not forcefully follow up due to health reasons.
Logically if consent over the phone is as good as a signature. then his call to them to cancel it should be enough to cancel it . But I doubt there will be a recording of my dads initial call to cancel it. However I do agree its my dads fault to let it
carry on for so many months .
I have found a few Consumer Grievance Cells / IRDA consumer complaints etc .Will give that a shot. This whole thing is unethical and I will fight it .

[sanjayc]

Originally Posted by alter.e.go

Sanjayc - If consent was over the phone ( which would have been archived ) would they also not require a signature somewhere ? Or is consent over the phone sufficient , with absolutely no Insurance documentation.

There is no sign required. Normally, for insurance, a telecaller from the bank appointed DSA (Direct Selling Agent) will call. You need to give positive confirmation that you have fully understood and accept the terms. Post this initial confirmation, you will get another call from a IRDA (Insurance Regulatory Authority) certified advisor, who again will confirm over phone the same - without this 2nd call, the insurance is not valid since as per IRDA guidelines, only advisors who have passed the IRDA conducted exams are supposed to sell policies.

So, in this case, if your father remembers consenting to the insurance thing, Citibank is right!

But before you take any drastic action, what is the problem you are facing. I mean, if your father has taken Mediclaim Insurance, that is a good thing. The only problem I see here since only Min amt due is paid, you have ended up paying quite a substantial amount of interest/addl charges etc - this is common across all banks and is a standard global practice.

In view of the current circumstances, my suggestion will be to explain the ignorance to Citibank and try to see if some kind of waivers on the interest/fees you can get.

Please also remember about the CIBIL thing - credit rating will suffer if you do not settle this thing properly.

In case, no consent is given, either written or phone, then you can definitely ask for proof and take this matter up.

BTW, you have not yet mentioned, is it a Medical Insurance. AFAIK, only medical insurance are sold like this on cards. Plus, apart from statements, you should have got a policy statement from the Insurer as well (I think it is Sundaram tie up with Citi).

Regarding calls archival, yes, the calls are recorded and saved. They can retrieve the calls on demand and actually listen to the same all over again. It is as good as retrieving a signed document.

[ASHISHPALLOD]

Originally Posted by alter.e.go

I have found a few Consumer Grievance Cells / IRDA consumer complaints etc .Will give that a shot. This whole thing is unethical and I will fight it .

Originally Posted by sanjayc

In view of the current circumstances, my suggestion will be to explain the ignorance to Citibank and try to see if some kind of waivers on the interest/fees you can get.

Please also remember about the CIBIL thing - credit rating will suffer if you do not settle this thing properly.

In case, no consent is given, either written or phone, then you can definitely ask for proof and take this matter up.

Before taking any action, go by Sanjay's advice.
Citibank is a gentle bank compared to others and will give concessions for some interest and penalty.

[sanjayc]

Originally Posted by alter.e.go

Yes we do receive monthly statements, thats how I came to know of it, when I checked my dads statement.
In the first statement when dad saw this amount he intimated Citibank to have it removed, but could not forcefully follow up due to health reasons.
Logically if consent over the phone is as good as a signature. then his call to them to cancel it should be enough to cancel it . But I doubt there will be a recording of my dads initial call to cancel it. However I do agree its my dads fault to let it
carry on for so many months .
I have found a few Consumer Grievance Cells / IRDA consumer complaints etc .Will give that a shot. This whole thing is unethical and I will fight it .

Don't do anything in a haste. First, get all your facts/documents/proofs together. If still you believe you have been wronged, then by all means proceed. Also, be aware that once a negative CIBIL rating is done, it will be very difficult to get any loans/credit etc in future.

For past couple of years, RBI is very strict on the banks regarding such type of cross selling of products and very rarely you will find bank processes in the lapse here (apart from the collection agencies tactics, which is a different story altogether).

[alter.e.go]

I will certainly think things through and then act. Its a very interesting point that you mention about Mediclaim Insurance being a good thing, I didn't think of it in that light in my anger. also perhaps may be because we already have Med Insurance. I am already thinking about striking a deal with Citibank where if they waive my late fees - I will pay for the Insurance.

Sanjayc / Ashish - Thanks a million for the genuine and very informative advise, this is what make TBHP such a wonderful forum to be a part of.

[sanjayc]

@alter.e.go, sorry for interrupting again, but banks do not get much apart from commission on the premiums on selling such policies. Hence your approach for not paying Insurance will not cut much ice.

Since you have mentioned earlier that your father was not keeping well, I suggest the better approach here will be to put this point across to the bank and ask for a lenient view. If your father is a senior citizen, I am sure bank will understand the position (as correctly pointed out by Ashish). You explain the issue to your father and give him some ideas about how it should be approached, and let him deal with the bank first. His seniority will be at an advantage here. Being young, we are hot blooded and can sometimes overlook a tactfull approach. I have known instances where Citibank has gone out of its way to help as much as possible (of course, there are horror stories as well), provided the aggrieved party is genuinely willing to pay up.

Next time ensure to pay total amt due..this way you get to have upto 45-50 days interest free credit plus loads of rewards points;-} For past 7 yrs I have spent exactly zero amount on petrol since I have an Indian Oil co-brand credit card and for each 100/- spent on the card, I get 2/- as rewards in form of IOC petro coupons which can be used to purchase all IOC products. It is another matter that I purchase almost all of my office supplies as well as computers running into lakhs, in addition to paying up insurance premiums/policies etc thus ending up with loads of rewards points. Even the new car purchased was paid via card partly.

[alter.e.go]

Sanjay - no interrupting mate, your advise has been invaluable - much much appreciated.
I just need to cool off, speak to my dad and then takes things further.

[alter.e.go]

This finally got resolved today,with me having to pay nothing.

Many Thanks Sanjayc, your inputs were a real help