CHENNAI: A consumer forum here has directed the London-based HSBC bank to pay a compensation of Rs 10,000 to a Chennai resident after the bank converted his PLOC (Personal Line of Credit) loan account into a personal loan account without proper authorization. Even after eventually accepting that it had erroneously changed the account, the bank still demanded that the customer pays his dues on the personal loan account.
Thilakarajan of Virugambakkam had a PLOC account with HSBC bank since October 2006. This account allows a customer to use the loan like a credit card: the lender approves the loan all at once and the customer has to pay interest only on the sum that is used.
In February 2010, the customer was informed that his loan account had been closed and that his loan had been converted to a personal loan.
He sent several mails to the bank claiming that the conversion was not authorised, but the bank claimed they had received directions from the customer to do so.
After he continued to stand his ground, the bank conducted an investigation and found they had indeed converted the loan erroneously, confusing it with another person’s account.
In a letter, the bank officials confirmed that “the account of the complainant was converted to a personal loan account erroneously due to clerical oversight and the same was done without any prejudice.”
However, the matter did not end there. Much to his shock, Thilakarajan received another letter the following month demanding that he pay his dues on his erroneously changed personal loan.
After writing again to the bank, they finally issued an apology and changed the customer’s account back to a PLOC.
In his complaint to the consumer forum, the complainant said even though the bank eventually apologised, it caused him mental agony and hardship due to a deficiency in service.
Agreeing with the complainant, the Chennai (South) consumer disputes redress forum, presided by B Ramalingam, said, “The complainant was made to suffer hardship and mental agony for the same though they have rectified the mistake and tendered their apology... It is pertinent to mention that the opposite parties having found out about the mistake and the same was communicated to the complainant, yet they demanded dues on the loan.”
Taking this into consideration, the bank was directed to a pay a compensation of Rs10,000 and Rs 5000 as costs to the complainant, failing which the compensation will carry an interest of nine percent, the forum ordered.