Standard Chartered Bank To Pay ₹5 Lakh Compensation For Harassing Consumer With ₹33 Lakh Demand After Credit Card Closure: Karnataka State Commission

The Karnataka State Consumer Disputes Redressal Commission, Bengaluru, comprising Judicial Member Ravi Shankar and Member Sunita Channabasappa Bagewadi, has held Standard Chartered Bank liable for unfair trade practice for demanding ₹33.83 lakh from a customer despite closure of his credit card account in 2010. The Commission observed that the bank's demand for an exorbitant amount of ₹33,83,173 after a lapse of nearly seven years without any basis constituted a clear case of unfair trade practice, causing mental agony and adversely affecting the complainant's CIBIL score. Facts The complainant V.V. Venkatesh Babu, had made a payment of ₹15,500 on 27.08.2010 towards closure of his credit card and received confirmation from the Standard Chartered Bank regarding its closure. However, after nearly seven years, the bank issued a demand notice in 2018 claiming ₹33,83,173.12 and continued to seek payment through phone calls, messages and legal notices dated 25.12.2020 and 15.06.2022. Aggrieved, the complainant approached the District Consumer Commission alleging deficiency in service and unfair trade practice. The District Commission awarded ₹1,00,000 as compensation with interest at 10% per annum from the date of order till payment and ₹3,000 as litigation costs. Dissatisfied with the quantum, the complainant filed an appeal seeking enhancement of compensation. Despite service of notice, both Opposite Party No.1 (Standard Chartered Bank) and Opposite Party No. 2 (Shaha Finlease Pvt. Ltd.) did not appear before the Commission and were placed ex-parte. Findings of the State Commission The State Commission noted that the complainant had informed the bank regarding closure of the credit card in 2010 after making the payment of ₹15,500, and the bank had issued an endorsement confirming closure of the account. However, despite this confirmation, the bank issued a demand notice years later seeking payment of ₹33.83 lakh without any proper explanation. The Commission held that such conduct clearly amounted to unfair trade practice. The Commission further observed that the complainant suffered adverse consequences due to the bank's actions, including a negative impact on his CIBIL score for nearly ten years and mental agony caused by repeated demands and communications seeking payment. Considering the harassment and reputational harm caused to the complainant, the State Commission held that the compensation awarded by the District Commission was inadequate and required enhancement. Modifying the order of the District Commission, the State Commission directed the Opposite Parties to: Pay ₹5,00,000 as compensation for unfair trade practice Pay ₹1,00,000 as Advocate's fee Pay ₹50,000 towards litigation costs The amounts are to be paid within 30 days, failing which they shall carry interest at 9% per annum until realization. Case Title: V.V. Venkatesh Babu v. Standard Chartered Bank & Anr. Case No.: SC/29/A/716/2024 Click Here To Read/Download Order

Standard Chartered Bank To Pay ₹5 Lakh Compensation For Harassing Consumer With ₹33 Lakh Demand After Credit Card Closure: Karnataka State Commission

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