A number of laws and regulations, such as the Consumer Protection Act, the RBI's guidelines, and the 2021-launched Integrated Ombudsman Scheme, regulate the rights of credit card users.
Despite all of the advantages that credit cards provide, users may encounter problems with unanticipated fees that they were previously ignorant of. Doesn't that sound unfair?
Certain laws and regulations guarantee that users are informed of all associated costs up front, that there is no misrepresentation, and that no services are provided without the users' express consent.
"RBI has made several consumer protection policies under its Master Directions for Credit Cards," says Riya Bhattacharya, founder of Rio Money. For instance, at the time of onboarding, issuers are required to clearly provide consumers with the Key Fact Statement (KFS) and the Most Important Terms and Conditions (MITC). Additionally, credit card issuers are unable to issue credit cards without the express consent of customers, which protects against mis-selling.
“These changes have been done so that all charges, terms and conditions are transparently provided to the customers before they apply for the credit card and even any changes in future have to be notified in advance. Additionally, cards must be closed if they are not activated within 37 days of issuance. This safeguard reduces the possibility that third parties will issue and abuse unsolicited credit cards, she continues.
These are a few of the main frameworks for consumer protection that are relevant to credit cards in India.