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The Biggest Loophole of 2024 Turned into a Nightmare for One

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rutgersbach said:
No, technically the money was never paid. A glitch can happen but as a lawyer above commented, if the user knew about this loophole and was exploiting it, he is liable to pay charges. If the user didn't know(or can prove he didn't) then he can avoid but it will be a long legal battle. And in our country the process is the punishment, so not worth the hassle.
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Agreed. Why wait for reversal? That's a risk and will not show your bonafide. Better pay the amount by netbanking / NEFT / IMPS on or before the due date even if there is a glitch. That will show the bonafide.
 
Tonymathew said:
It is a shame on the outset itself, when some stranger labels your plight an exploitation of any loophole, when I myself was not aware of the loophole. His shower was so irking on the original post itself and now labelling me a chor, as per his wish. I believe OP has some genuine issues, or some horrible past experiences, and wish him early cure.
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Words are being juxtaposed. Defraud is being rechristened as loophole. Still trying to process how it's a loophole. Ought to modify my vocabs.
 
TechnoFino said:
Hey TFCians,

As I promised yesterday, here’s a fascinating yet cautionary story about loophole exploitation. Let’s dive in:

​

The Story​

Mr. X, a credit card enthusiast, owned several high-end credit cards, which he primarily used for his business. Due to his business expenses, his credit card bills consistently exceeded ₹5 lakhs on nearly all his cards each month. Like many of us, he used his debit cards to pay credit card bills to earn some additional rewards.

In September 2024, Mr. X’s credit card bills across nine different bank cards totaled over ₹5 lakh each.
One day, Mr. X attempted to pay his “CCB Bank” (actual name undisclosed) credit card bill via “LTB Bill Pay” (platform name also withheld) using his IDFC FIRST Bank debit card. However, the transaction failed. Undeterred, he tried again. And again. Over 10 times. Still, all his attempts failed.

After a bit of investigation, he realized the transactions were failing because he was attempting to pay over ₹3 lakh each time, but his account balance was only ₹2.8 lakh. So, naturally, they couldn’t process.

But about 20 minutes later, to his shock, he began receiving SMS notifications from CCB Bank, confirming that his payments had been credited to his credit card account. Alarmed, he opened his banking app to find ₹18 lakh credited to his credit card! He quickly checked his other credit cards, where he had also attempted to pay bills—and astonishingly, all the failed transactions had been credited too.

By the end of the day, Mr. X had successfully "paid" ₹30 lakh in credit card bills across multiple accounts without actually spending any money. Intrigued, he decided to test this glitch further, eventually using the same method to "pay" a total of ₹65 lakh.

Though Mr. X was initially thrilled, he was also worried. Would the bank reverse the payments? Would they impose hefty interest and late payment fees? Cautious of the possible consequences, he refrained from exploiting the glitch further.

Later, he shared his experience with a few close friends, including me. I strongly advised him to clear his actual due amounts to avoid interest or fees in case the payments were reversed.

The Aftermath​

  • Mr. X: Payments are still not reversed, but it’s likely only a matter of time. Fortunately, he cleared his actual credit card dues, so he may avoid penalties
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I guess RBI doesn't allow excess money credit in Credit card accounts, what action did the CC issuer did? Have they sent the excess to bank account to Mr. X? If not, this will be a nightmare to CC issuer. Since the amount is huge negative, it should have been flagged by risk management department.

Since this happened in September, what happened in the next bill in October or November? Does it still carry negative credit balance?
 
TechnoFino said:
Hey TFCians,

As I promised yesterday, here’s a fascinating yet cautionary story about loophole exploitation. Let’s dive in:

​

The Story​

Mr. X, a credit card enthusiast, owned several high-end credit cards, which he primarily used for his business. Due to his business expenses, his credit card bills consistently exceeded ₹5 lakhs on nearly all his cards each month. Like many of us, he used his debit cards to pay credit card bills to earn some additional rewards.

In September 2024, Mr. X’s credit card bills across nine different bank cards totaled over ₹5 lakh each.
One day, Mr. X attempted to pay his “CCB Bank” (actual name undisclosed) credit card bill via “LTB Bill Pay” (platform name also withheld) using his IDFC FIRST Bank debit card. However, the transaction failed. Undeterred, he tried again. And again. Over 10 times. Still, all his attempts failed.

After a bit of investigation, he realized the transactions were failing because he was attempting to pay over ₹3 lakh each time, but his account balance was only ₹2.8 lakh. So, naturally, they couldn’t process.

But about 20 minutes later, to his shock, he began receiving SMS notifications from CCB Bank, confirming that his payments had been credited to his credit card account. Alarmed, he opened his banking app to find ₹18 lakh credited to his credit card! He quickly checked his other credit cards, where he had also attempted to pay bills—and astonishingly, all the failed transactions had been credited too.

By the end of the day, Mr. X had successfully "paid" ₹30 lakh in credit card bills across multiple accounts without actually spending any money. Intrigued, he decided to test this glitch further, eventually using the same method to "pay" a total of ₹65 lakh.

Though Mr. X was initially thrilled, he was also worried. Would the bank reverse the payments? Would they impose hefty interest and late payment fees? Cautious of the possible consequences, he refrained from exploiting the glitch further.

Later, he shared his experience with a few close friends, including me. I strongly advised him to clear his actual due amounts to avoid interest or fees in case the payments were reversed.

Enter Mr. Y​

One of Mr. X’s friends, Mr. Y, decided to give this trick a try in the first week of November. Since credit card bills can’t be paid if there’s no outstanding balance, he used his cards in October, waited for the bills to generate, and then attempted the same method.

Lo and behold, Mr. Y managed to “pay” over ₹60 lakhs across his credit cards without spending a single rupee.

But just two days ago, disaster struck. All the payments Mr. Y made were reversed, and the bank imposed substantial interest and associated charges on his accounts. Now, Mr. Y is desperately trying to get the charges reversed, but he hasn’t received any response from the bank yet.

Here are two screenshots

View attachment 75998

View attachment 75997

Enter Mr. Z​

Another friend, Mr. Z, approached the glitch differently. Rather than paying credit card bills, he used it to cover other expenses like insurance premiums, Fastag recharges, mobile recharges, and more.

Using multiple banks’ debit cards, Mr. Z managed to:
  • Recharge his family’s mobile phones with annual plans for the next 15 years.
  • Top up his Fastag accounts and purchase fuel worth ₹3 lakh.
  • Pay broadband bills and other utilities.
Unlike Mr. Y, none of Mr. Z’s payments have been reversed so far.

The Aftermath​

  • Mr. X: Payments are still not reversed, but it’s likely only a matter of time. Fortunately, he cleared his actual credit card dues, so he may avoid penalties.
  • Mr. Y: Facing a financial nightmare. His CIBIL score will likely plummet, and he’s burdened with massive interest and fees.
  • Mr. Z: The smartest of the bunch. His payments haven’t been reversed, and he seems to have dodged the bullet.

​

The Takeaway​

Exploiting loopholes might seem like an easy way to gain an edge, but it’s a risky game. Even when a loophole isn’t technically illegal, it can still have severe consequences if discovered and reversed.

Before attempting such exploits, always consider the potential fallout and worst-case scenarios. While I won't lecture you about ethics, it's up to you whether you want to take advantage of loopholes or not. I recommend you to think carefully before diving into them.

Note: I have not disclosed the actual amount here, as the affected individuals have asked me not to share the specific figures. The actual amount may be higher or lower than what I have disclosed.

Cheers! 🥂
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Wow, I am amazed to learn about these loopholes and that such things exist. But bro, you explained it very well. And I completely agree with what you said, 100%.
 
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This happened like way before this like I had a similar instance with kotak in January 2024 and it was clawed back in March 2024 .... Luckily I paid full and never thought it wouldn't not be taken back..... Had a couple of 10s of thousands purchase too on a different family member acc... but everything was taken back post a quarter..... There is clear transaction record at every step bbps biller - bbps - debit bank - and credit card bank account..... There is clear guidelines of reconciliation and audit frequently..... Some thing may be misssed in one step but other step will catch it sooner or later.... The data is thier with all stake holders to analyse for years if not in eternity.... How would one be naive enough to think this as a clear case of bubble in credit card cycle

Note these are all transactions done on full kyc - documented - bank led transactions
RBI - Banks - IT department all have access to the data for years to open the case
 
Dragon_slayer said:
I hope A-x-is bank was loot-ed in this story. They deserve that for asking people to maintain 30L FD for a card and still pay 36K annual fees. :hehe:
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At end of day, whose money is there in banks? Common people. Bank or bankers are never at losing end. They will curtail benefits to commoners in future to cover such exploitation.

Then there are people who never pay on time and then think they shouldn't be charged for it. They want bank to knock their doors on payment date or remind them continuously so they don't miss payment date. Arrey bhai khud ki responsibility kaha hai? If you can't pay on time or remember dates, why are you holding CC at first place?

Who are bank employees who do such exploitation? They are normal people who join banks but never justify the salary with their hard work. They think they are underpaid and then use such things to justify the loot and think they are doing good work. The corrupt mindset of people make them think everything is justified. They want to be rich no matter if they follow wrong path because they heard story or know about 1% corrupt who became rich that way and they forgot to see at other 99% people who are working hard everyday to make a living. So it's all about having a soul and character which such people lack. They own materialistic desires overcome their strength and they are already made weak by 5 senses.
 
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