Table of Contents
[The Loophole that Sparked a Crackdown](#the-loop-hole-that-sparked-a-cr cracks-down-on-customers-who-gamed-its-rewards-system-even-those-who-left)
What’s at Stake for Customers?
Introduction
In a move that has left many customers scrambling, Axis Bank has begun to recover rewards points accumulated by some credit card holders through a technical loophole in 2023. The bank has sent notices to several customers, including those who have closed their accounts, demanding repayment of the excess rewards earned. This is not the first time Axis Bank has taken action against customers who have allegedly misused its rewards system.
The Loophole that Sparked a Crackdown
The controversy centers around a technical issue that allowed customers to earn rewards on cancelled transactions. Ordinarily, when a credit card transaction is refunded, the reward points earned on that transaction are reversed. However, Axis Bank failed to do so for cancelled transactions in 2023, allowing some customers to exploit the oversight and earn excess rewards.
Is Axis Bank Justified?
Axis Bank is relying on Clause G of its Most Important Terms and Conditions (MITC) to justify the recovery effort. The clause states that if a cardholder has a negative rewards balance at the time of account closure, the equivalent amount will be converted into a statement debit that must be repaid before the card is officially closed. However, critics argue that the rule was introduced after many of these former customers had already shut their accounts, and that the bank is now trying to apply a rule retroactively.
What’s at Stake for Customers?
According to Axis Bank, fewer than 100 customers have received recovery notices. However, for those affected, the stakes are high. Current cardholders will see the recovery amount reflected in their credit card statements, and experts advise that those considering a challenge should first pay the balance to avoid credit score damage before filing a complaint with the banking ombudsman.
Conclusion
The case of Axis Bank’s recovery of excess rewards points has raised questions about the bank’s approach to customer engagement and its responsibility to ensure that its systems are resilient to exploitation. While some may argue that the bank is justified in its actions, others see it as an example of overreach and a failure to protect its customers. As the situation continues to unfold, one thing is clear: the stakes are high, and the consequences of falling foul of the bank’s rules can be severe.
References
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