What to Do if You Receive an Unsolicited Credit Card?

Have you ever received an unsolicited card? OR received a card that you applied for but now think that you shouldn’t have applied for this card. As per regulations, the banks are prohibited from issuing unsolicited cards and are required to seek consent from the customer before issuing a card.

Reproducing an excerpt from RBI Master Directions on Issuance of Credit and Debit cards (Para 6(vi):

The issue of unsolicited cards/upgradation is strictly prohibited. In case, an unsolicited card is issued/existing card upgraded and activated without the explicit consent of the recipient and the latter is billed for the same, the card-issuer shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed. In addition, the person in whose name the card is issued can also approach the RBI Ombudsman who would determine the amount of compensation payable by the card-issuer to the recipient of the unsolicited card as per the provisions of the Ombudsman Scheme, i.e., for loss of complainant’s time, expenses incurred, harassment and mental anguish suffered by him/her.

But we know how things work. Hence, let’s assume you have just received a card that you don’t want to use.

What Are Your Options?

  1. Reach out to the bank to cancel the card.
  2. If you do not want to cancel the card, do NOT activate the card. If the card is not activated within 30 days from the date of issuance, the bank will have to reach out to you to seek confirmation for closure of the credit card. Post your OTP based confirmation to close the card, the bank must close the card within 7 days of such confirmation. The bank must also inform the customer that the card has been closed.

If the bank is not co-operating, you can escalate to the RBI Ombudsman (https://cms.rbi.org.in/).

What Is Considered Activation of Credit Card?

This is important. Activation does not mean that you must swipe your credit card. Many lesser actions can be considered activation of credit card.

Here is a list of actions that the bank will deemed as activation of credit card. I recreate the list from RBI FAQs on Master Direction about issuance of credit and debit card.

  • PIN generation or change in PIN
  • Modification of transaction control/limits
  • IVR/Recorded call to the customer care OR SMS for activation of card
  • Generation of statement

But there is a problem here.

As I see, there is an element of subjectivity in many things we do. It is not always easy to figure out the reason behind the call to customer care. In any case, only the bank has access to recorded lines. Additionally, customer care executives can trick you into performing a deemed-activation transaction.

An option that you may explore is blocking the card. However, “Blocking” is not cancellation of credit card. You just “Block” your current card for transactions. The bank may send you a new card.

I have mentioned earlier that the bank must reach out to the cardholder if the card is not activated within 30 days. And seek OTP based confirmation for cancellation. By the way, you can also activate a card through OTP based confirmation. Not difficult to see how the bank can play tricks here.

Hence, you need to be careful here and insist on formal confirmation from the bank about the cancellation of your credit card. And regulations also mandate banks to communicate to the customer about closure.

Here is an excerpt on closure of cards from RBI master circular:

rbi excerpt

I could not find the option to cancel my credit card on the mobile banking app. Hence, the banks won’t make it easy for you to cancel credit cards.

Written communication always helps since you have a track record of interactions.

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