Do you know you pay for customer support

Price of calling your Insurance Company and Bank

Do you know when you call your insurance company or bank you may actually be paying to call them?

What you are not aware of the same?

Well check the contact us page of your bank or insurance company and read the fine print.

In most of the developed economies call center numbers are toll free 1800 numbers. But in India  even the 1800 numbers ( they can actually be 18 or 16 series in India) are also paid numbers.

So every time  you call  your insurance company or the bank you are actually paying for the call. What is the worst part is that these are premium number and you actually pay more than the normal calls. I suspect ( though I do not have a proof), that the telecom company and the Bank/Insurance company are sharing the revenue from the call.

I called my insurance company and tried to find out the details, but they asked me to find out from the telecom company. I asked the lady on the phone to give me the name and contact of the telecom company they use, but she  had no answer for the same.

I think this is a serious matter, if I am suppose to pay for a call to my bank or insurance company, don't you think I should know how much that call is going to cost me?

Are IRDA and TRAI, and RBI listening? or are they busy fighting each other like it happened some time back?

I think this is one area where the consumer is being taken for a ride and some transparency is needed from the financial institutions as well as the telecom companies.

This revenue or cost if any is minuscule for any Bank or Insurance company but they are not being transparent in informing the consumer that some of these numbers that the customer is calling are very expensive to call. I don't see a reason why the amount that will be charged to consumer can not be displayed or announced when the call is connected?

What do you say?

A Call To My Bank- How KYC is actually used

Calling Mr. Banker

A few days ago I got an SMS from one of the NEW AGE banks, I have a credit card.

" We have upgraded your credit card, you will get the new one in a few days at your billing address"

Now my billing address is my  parents home, while I live in a different city. I was not planning to go to my parents home for some time. So I called the bank's call center, whose number is given is font about half this size, behind the credit card and I needed find my magnifying glass from my school days to read it.

In these days of paid caller tune the Bank was kind enough to make me listen to free music and lyrics, albeit singing Hosannas about how wonderful the bank and its products are. I was lost in the melodious lullaby and had almost fallen asleep when somebody woke me up to ask for my problem. I explained that would it be possible to deliver the card to my local address. 

"NO", I was told bluntly, as we need to follow RBI guidelines for KYC and if you  need a change in address you need to visit our nearest branch, fill a form and give an application.

Well OK, I thought who wants to take Panga with RBI, not me a struggling blogger, I thought, and would just call my parents to courier the card to me once received.

As I was about to keep the phone, the young man asked me if I am looking for any investments?  I said yes I do have plans for investing for my future but not sure where considering my limited knowledge on all financial matters.

Suddenly the tone of the young man on the phone changed.

" Nothing to worry sir, I will send our Investment manager to your address and  he will help you"

" But my address is of another town, would you send him  here or to my parents home?" I wanted to know.

Any where in country sir, wherever  you say, we can send him to your  office, or home as per your convenience.

" But will RBI not have a problem sending your consultant to my local address while my address in your records is for another city?"

"Nothing to worry Sir, our Manager will help you with all the formalities"

" But what about KYC?"

" Sir my Investment Manager will take care of that"

" OK, let me think about it, I said and hung up".

Since then I have received many calls from the Investment Manager seeking an appointment. It is clear that the poor call center chap and the Investment manager have a target to sell and their bosses ignore RBI norms as long as the money keeps on coming. Remember The Bankster by Ravi Subramanian ?

So here are a few questions I want to ask the new age modern banks, some of them who were recently slapped by RBI for not following the KYC Norms. 

What is clear is the moment somebody wants to invest money though a bank all the KYC norms are thrown out of window and the bankers are willing to bend to adjust customers with funds. For all other cases RBI is used as the Gabbar Singh.

I am all for following RBI norms, but both in letter and spirit, I wonder when our banks will follow the same.

What has been your experience with your bank? Let us hear it in comments.

Interest Rates- IV

Some days ago I wrote about how banks are taking advantage of customers by being very proactive in increasing the rate of interest but they are a bit slow to decrease the rates when the rates drop for a floating rate of interest loan. The worst part was that in case you wanted to prepay the loan the bank had the right to charge you a prepayment penalty. So we the consumers were loosing if we continue with the loan and we were loosing in case we decided to prepay the loan.

Now fortunately the RBI, has decided to act and is recommending to the banks that there should not be any prepayment penalty on the borrowers who prepay the loan where the rate of interest is floating.

I think this is a very good development and will help a lot of borrowers who want to prepay or foreclose their loans by making payments ahead of time. So what should you do in case you have a floating rate of interest? I think one should check with the lender what will be the process of prepaying the floating rate of interest and if some surplus funds are available one can think of prepaying. For the time being banks will continue to charge the prepayment penalty for the fixed rate of interest loans.

Thanks for reading