Mumbai Consumer Commission fines AEBC ₹1 lakh for issuing unauthorized insurance policies | Representative Photo
Mumbai: The Central Mumbai District’s Consumer Dispute Redressal Commission has found American Express Banking Corporation (AEBC) guilty of deficient services and unfair trade practices. The commission ruled in favor of a complainant who was issued two insurance policies without his consent, directing the bank to pay ₹1 lakh as compensation for mental agony and ₹10,000 for litigation costs.
As per the complaint copy, the complainant, Shakeel Shaikh, a resident of Colaba had alleged that AEBC had facilitated the purchase of two insurance policies worth ₹2 crore each, with a premium of ₹24,448 for each policy, charged to his credit card without the complainant’s authorization.
The complainant discovered the unauthorized transactions on his credit card statement dated February 21, 2015, which showed a total amount of 48,896 under the title “miscellaneous purchases.”
When the complainant approached AEBC to clarify the unauthorized transactions, the bank acknowledged the error and assured him it would be rectified. However, the issue persisted, and the complainant later received a notice to attend the National Lok Adalat on July 8, 2017, regarding an overdue amount of ₹1,23,576 on his credit card. This prompted the complainant to file a formal complaint with the commission.
The commission after going through the complaint had asked the firm to file its reply, but the firm didnot file any reply and hence the case was decided ex-parte
The commission in its orders held that the policies were issued by an insurance firm based on AEBC’s request. The same was confirmed through the complainant’s credit cards statement which showed that the premiums were paid without his consent.
Meanwhile the insurance company also had admitted to having no direct interaction with the complainant regarding the policies, confirming that AEBC had acted without authorization.
“The complainant has proved deficiency in service and unfair trade practices by AEBC. The issuance of the policies without consent amounts to negligence and a breach of trust,” held the commission.
