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Axis Bank May Issue Legal Notices for Unsettled Negative Reward Points Balances

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ash_m said:
I doubt anyone here has taken the "side" of people who exploit loopholes.

If the bank fails to reverse a transaction as per the timeline, it is NOT a loophole if customer goes to RBI and claims compensation. I mean, if I miss paying my bills on time due to internet issues will the bank not charge me an interest and report this to CIBIL? Sure, they can do this once or twice in goodwill but the ball is completely in their court.

I agree that this will eventually be compensated from someone's pocket. It is just another cycle. If you're able to enjoy discounts or attractive rates for any service or product, it always comes at the expense of someone who is sitting at the bottom.

See, I see this as a systemic flaw that allows this to continue. Of course, people who have knowingly exploited such flaws are wrong in their actions. But I don't expect a consumer to individually bear the burden of idealism on their own shoulders when the entire system itself is built for exploitation. In general, the only way to make this right is to fix the system itself & make it justified for everyone.

For this case, Axis needs to claim compensation for their losses from the IT company who provide these services to them. This will come at the expense of those people who are working for that IT company. I may find this immoral but that is exactly how this current system works. And axis should ban those people who have knowingly exploited the loophole. If you tighten the screws of the banking system, people who game it for their selfish gains will sooner or later be figured out. It's not that difficult. But if you are going to selectively blame the consumers and allow the bank walk away, you should blame yourself if your bank fails you in the future.

Honestly, I am not surprised to see so many people unwilling to challenge the system and be happy about breach terms & conditions. Clearly, most of these "wannabe" saints would themselves have exploited the loophole had they known about it. We are a developing country for multiple reasons, this being one of them. I mean, it is always easy to blame the small fish right.
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Thank you very much. It's like you read my mind. 🙂
 
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chasni said:
This whole logic is based on the premise that reward points have monetary value. Reward points are not equivalent of credit/loan provided by bank.

If reward points have monetary value then ITD has the right to comes to everyone's door for a tax demand, including the past years. I guess then they will right in asking for a tax + penalty for these rewards which we haven't been disclosing in our ITRs.

If it were, then all banks would be required to deduct TCS and we would be required to disclose in ITR.
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Reward points do not have direct monetary value, meaning they cannot be considered as "cash" and are not directly taxable as income; however, their value is derived from the goods or services they can be redeemed for, which may have a monetary value when redeemed. The contractual valuation creates an actionable claim under Section 3 of the Transfer of Property Act, 1882. Courts have recognized loyalty points as enforceable benefits.


Since actionable claim has an intrinsic economic value, and the whole reason this is happening is because Axis has suffered losses due to these frauds so it can directly tie the economic value to the fraud. First, they prove the fraud, then they tie value to it on the basis of cost paid. So yeah, reward points don't have direct monetary value from Income Tax point, but it does have derived value from an economic point of view. And this is more than enough for their claim of monetary loss due to fraud.
 
aaa1 said:
Reward points do not have direct monetary value, meaning they cannot be considered as "cash" and are not directly taxable as income; however, their value is derived from the goods or services they can be redeemed for, which may have a monetary value when redeemed. The contractual valuation creates an actionable claim under Section 3 of the Transfer of Property Act, 1882. Courts have recognized loyalty points as enforceable benefits.


Since actionable claim has an intrinsic economic value, and the whole reason this is happening is because Axis has suffered losses due to these frauds so it can directly tie the economic value to the fraud. First, they prove the fraud, then they tie value to it on the basis of cost paid. So yeah, reward points don't have direct monetary value from Income Tax point, but it does have derived value from an economic point of view. And this is more than enough for their claim of monetary loss due to fraud.
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I am assuming all those people transferred those points to a FFP which is still a loyalty point. So how are you deriving the economic value there?
 
aaa1 said:
"their value is derived from the goods or services they can be redeemed for"
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FFP loyalty points also don't have monetary value.

So you mean if those people transferred the points to FFP but didn't redeem then they are fine but if they have redeemed for tickets/stays then they are liable. Is that so?
 
FFP reward transfer are not free.. banks pay a certain value for each points redeem to the FFP partners as per contracts with them. so technically each axis edge points value can be derived from it and accordingly the -ve axis edge reward holder not having axis connection anymore must pay.... no mecy... otherwise it will encourage more fraud in the future.
 
Tamal said:
FFP reward transfer are not free.. banks pay a certain value for each points redeem to the FFP partners as per contracts with them. so technically each axis edge points value can be derived from it and accordingly the -ve axis edge reward holder not having axis connection anymore must pay.... no mecy... otherwise it will encourage more fraud in the future.
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By the same logic you should pay Tax and TDS on your rewards too but you don't?
 
chasni said:
By the same logic you should pay Tax and TDS on your rewards too but you don't?
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Loyalty points fall under the actionable claim. That is why you don't need to pay Taxes or TDS on it. But they have monetary value.

If you want to argue that it doesn't, you can go ahead and argue with lawmakers and courts on it, but the definition is clear, which has been accepted by the courts too.

 
aaa1 said:
Loyalty points fall under the actionable claim. That is why you don't need to pay Taxes or TDS on it. But they have monetary value.

If you want to argue that it doesn't, you can go ahead and argue with lawmakers and courts on it, but the definition is clear, which has been accepted by the courts too.

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Well, going by the same "what is accepted by the courts" statement, care to enlighten us why would any court even consider these old customers as fraud when its the bank who themselves have issued them a no dues certificate and closed their card?

Last I heard, courts do not work around moral values. If the terms allow a customer to get away, I wonder what is the point of this "Axis has the right to claim these -ve points back" altogether. I mean, yeah you'd have been right if we were living in an ideal world. Unfortunately, that isn't the case, especially not when you're dealing with a notorious bank like Axis. I'm no lawyer or an expert, but unless its a planned scheme run by a set of bank employees & the bank can prove this to be an organised scam, you cannot really say the customer has really done a fraud or not.

Again, this is not to defend the people who've actually exploited the loophole. But I don't think allowing a notorious bank to bully and breach its terms in order to teach these people a lesson is the right action. It solves nothing and further encourages such banks to take advantage of one sided terms.
 
ash_m said:
Well, going by the same "what is accepted by the courts" statement, care to enlighten us why would any court even consider these old customers as fraud when its the bank who themselves have issued them a no dues certificate and closed their card?

Last I heard, courts do not work around moral values. If the terms allow a customer to get away, I wonder what is the point of this "Axis has the right to claim these -ve points back" altogether. I mean, yeah you'd have been right if we were living in an ideal world. Unfortunately, that isn't the case, especially not when you're dealing with a notorious bank like Axis. I'm no lawyer or an expert, but unless its a planned scheme run by a set of bank employees & the bank can prove this to be an organised scam, you cannot really say the customer has really done a fraud or not.

Again, this is not to defend the people who've actually exploited the loophole. But I don't think allowing a notorious bank to bully and breach its terms in order to teach these people a lesson is the right action. It solves nothing and further encourages such banks to take advantage of one sided terms.
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You are right; the court works on laws and not moral values or how people feel. And as per laws, if the statute of limitations has not passed and someone has defrauded and caused monetary loss, then they deserve justice.

I would point you to my earlier comment which covers the NDC part. I've already said the bank would need to prove the intention was to defraud them and it will be doable given a customer was replacing the card every week or placing an order and cancelling it. Context matters. Axis faced a huge loss due to this.

No sane person will order lakhs of stuff and cancel monthly or needs card replacement every week. The intention to defraud is clear to normal eyes. The judge will also see that most probably.

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Post in thread 'Axis Bank May Issue Legal Notices for Unsettled Negative Reward Points Balances'

dexter_greycells said:
OP's questions for Axis Bank sound like a sense of misplaced entitlement to me. Just because someone made a mistake and didn't close their door that doesn't mean you enter their home and leave with whatever you can. Asking them why they made a mistake is moot. Mistakes will happen. Ask yourself why you couldn't resist taking advantage of their mistakes.
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Exactly, It is hilarious that people who used to witchunt about who shared the trick on twitter/forum etc blaming that it led to devaluation while the actual reason for devaluation are abusers are jumping on technicality that it is...
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ash_m said:
Well, going by the same "what is accepted by the courts" statement, care to enlighten us why would any court even consider these old customers as fraud when its the bank who themselves have issued them a no dues certificate and closed their card?

Last I heard, courts do not work around moral values. If the terms allow a customer to get away, I wonder what is the point of this "Axis has the right to claim these -ve points back" altogether. I mean, yeah you'd have been right if we were living in an ideal world. Unfortunately, that isn't the case, especially not when you're dealing with a notorious bank like Axis. I'm no lawyer or an expert, but unless its a planned scheme run by a set of bank employees & the bank can prove this to be an organised scam, you cannot really say the customer has really done a fraud or not.

Again, this is not to defend the people who've actually exploited the loophole. But I don't think allowing a notorious bank to bully and breach its terms in order to teach these people a lesson is the right action. It solves nothing and further encourages such banks to take advantage of one sided terms.
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Most interesting thing to note is that there are several banks running loyalty points schemes on their cards and accounts. But I have never heard of a notice in all my 13 years of being a loyalty program freak.

In just last 1 yr, Axis has already sent notices on multiple occasions for many different things. Is it even normal?
 
chasni said:
Once you're sure, just let me know.

PS: I'm not debating this any further. Everyone is free to have their opinion and morality.
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Lol haha that was bad wording on my part. What I meant was there is monetary value for it but not in terms of taxes. It's a bit difficult concept to grasp but there is legal precedence for it especially for loyalty points. There is a reason it is not taxed. But again, there is a reason banks can go after people to claim like SBI did.
 
malavkarkar said:
Would like to share my experience with Axis Bank here.

March 11 - Axis Bank suspended my Edge account citing non-personal use without any proof, asking for invoices dated from a specific date to a specific date, which would involve sending at least 20 different invoices.

March 12 - I sent a formal email asking for the seriousness of the email, also mentioning that none of my travel has been for work. I'm a freelance web designer who can work from anywhere, and I don't have to travel for work.

March 13 - Axis Bank asked for specific invoices, from my vacation to Kenya and Mauritius, along with a dinner invoice from Fairfield Vadodara, which happens to be in my hometown.

March 13 - I sent these invoices to Axis Bank. Received confirmation email from both customer care and PNO.

March 19 - Axis Bank put out different PDFs devaluing their credit cards along with reward points, while Edge Rewards account still remains blocked.

March 21 - I sent one more email to Axis Bank, a rather sarcastic one, as a last attempt to get them to unblock my account.

March 30 - Received an email from Axis Bank mentioning they never received the invoices that I sent, and asked to share the same again.

March 31 - At this point, I figured they were stalling; so out of frustration I told them to cancel both my cards (Magnus and Atlas) permanently, and told them to keep my reward points.

April 1 - Axis Bank confirmed that cards are canceled and deactivated permanently, and asked me to provide a canceled cheque copy as there was an excess amount of ₹0.61 on my credit card. I told them to keep this excess amount as well saying that the bank needed it more than I do.

April 8 - I opened the app randomly and to my surprise, I was able to log in into my Edge account. I redeemed 44,100 Edge Miles immediately. I never received any official communication from Axis Bank mentioning that my Edge account was unblocked, so this must have been an error from their end. Or maybe they are legally required by RBI to let customers redeem their points after card closure? I have no idea what happened here.

April 10 - 88,200 Green points were credited to my ITC account.

So in retrospect, the bank blocked my rewards account, I was able to walk away with all my reward points anyway, and Axis Bank lost a customer.

I sent another email to Banking Ombudsman complaining about the unfair devaluations, but nothing came out of it. Atlas card had a reward structure where some of the benefits were to be unlocked in next year, if you reach a certain tier. However, Axis removed these features before customers could even use it.

My card was activated sometime in August 2023, and I had reached gold tier by February 2024. According to the terms when I signed up for the card, I was to receive 2 Meet & Greet Services which I could have used between August 2024 and August 2025. But Axis removed these services before I had a chance to use it.

And these weren't free cards. Many Magnus users paid ₹12,500 plus taxes to enjoy unlimited lounge benefits and complimentary one-on-one movie tickets, but Axis removed these features in the midst of card-membership year. And these kind of devaluations were done across their entire credit card lineup. The bank made too many promises to increase their customer base, and then they did a Pikachu face when it came to keeping these promises. What a scummy bank!
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You have made a valid point here.

Not defending people who looted the money but it was bank's fault and poor infra as @TechnoFino mentioned.

Can't believe that they couldn't fix such a basic things at first.

If they are demanding 0.40p for a point, why people were never allowed to encash points.

Axis is just playing with fire. However, I do not have high hopes from RBI either. Consumer protection is not a priority for them.

The point is a lot of people will end up paying out of fear. Only some would have the courage to go to Consumer court for this. However, The problem is that they also need to justify the geniune spends and they didn't abuse the system.
 
axis is right on their behalf as well u are playing cancel and refund game and then accept the points and transfer it. means u did it on purpose. if axis can prove that he is a fraud a case can easily be made against that person. if they were genuine spends he should not worry. In my final year law and i support axis bank here . Sue the people who have extracted value beyond 1 lakh points even after they knwng that they are cancelling the orders
 
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