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Victim of wrong MCC code - Lost a significant amount of money due to surcharge

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hpatel

hpatel

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I recently did big transactions on my hdfc diners black credit card to purchase a car. But the dealer categorized the transaction as the fuel transaction and Hence I was levied the surcharge and no rewardpoints. The bank, After 3 weeks of follow ups officially confirmed that it's the dealer who has registered wrongly with the acquiring bank so kindly check with the dealer.

Today when I went to the dealer, I was informed that it was the phonepe (they were using phonepe machines) agent who registered it as a fuel transaction, you can raise complaint against phonepe.

Morevever, I paid around 1 percent extra to dealer for accepting the credit card itself considering the rewards points of diners black card. Now, I have been charged another 1.1% of fuel surcharge plus no rewards points or the milestone benefits. As the amount of impact is big, can anyone please help me with this case? Or a contact who can help me?

Ps. I have all docs supporting my car purchase including the credit card transaction slips as well.

Attaching the mail from the hdfc bank.

screenshot_20240725_014237_gmail.webp

Also the machines used were the phonepe machines and phonepe name only is printed on the slips so acquiring bank is phonepe probably. The Merchant is Navjivan Sales Adajan Surat.

Note: Related Article By TechnoFino - What is MCC? Why Is It Important? Consequences of Merchants Using the Wrong MCC
 
Last edited by a moderator:
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hpatel said:
I recently did big transactions on my hdfc diners black credit card to purchase a car. But the dealer categorized the transaction as the fuel transaction and Hence I was levied the surcharge and no rewardpoints. The bank, After 3 weeks of follow ups officially confirmed that it's the dealer who has registered wrongly with the acquiring bank so kindly check with the dealer.

Today when I went to the dealer, I was informed that it was the phonepe (they were using phonepe machines) agent who registered it as a fuel transaction, you can raise complaint against phonepe.

Morevever, I paid around 1 percent extra to dealer for accepting the credit card itself considering the rewards points of diners black card. Now, I have been charges another 1.1% of fuel surcharge plus no rewards points or the milestone benefits. As the amount of impact is big, can anyone please help me with this case? Or a contact who can help me?

Ps. I have all docs supporting my car purchase including the credit card transaction slips as well.
Click to expand...
Mail all proofs and a write a detailed mail to *[management email id removed, please share via DM]*
 
hpatel said:
I recently did big transactions on my hdfc diners black credit card to purchase a car. But the dealer categorized the transaction as the fuel transaction and Hence I was levied the surcharge and no rewardpoints. The bank, After 3 weeks of follow ups officially confirmed that it's the dealer who has registered wrongly with the acquiring bank so kindly check with the dealer.

Today when I went to the dealer, I was informed that it was the phonepe (they were using phonepe machines) agent who registered it as a fuel transaction, you can raise complaint against phonepe.

Morevever, I paid around 1 percent extra to dealer for accepting the credit card itself considering the rewards points of diners black card. Now, I have been charges another 1.1% of fuel surcharge plus no rewards points or the milestone benefits. As the amount of impact is big, can anyone please help me with this case? Or a contact who can help me?

Ps. I have all docs supporting my car purchase including the credit card transaction slips as well.
Click to expand...
Attaching the transaction slips from the phonepe pos machine
hpatel said:
I recently did big transactions on my hdfc diners black credit card to purchase a car. But the dealer categorized the transaction as the fuel transaction and Hence I was levied the surcharge and no rewardpoints. The bank, After 3 weeks of follow ups officially confirmed that it's the dealer who has registered wrongly with the acquiring bank so kindly check with the dealer.

Today when I went to the dealer, I was informed that it was the phonepe (they were using phonepe machines) agent who registered it as a fuel transaction, you can raise complaint against phonepe.

Morevever, I paid around 1 percent extra to dealer for accepting the credit card itself considering the rewards points of diners black card. Now, I have been charged another 1.1% of fuel surcharge plus no rewards points or the milestone benefits. As the amount of impact is big, can anyone please help me with this case? Or a contact who can help me?

Ps. I have all docs supporting my car purchase including the credit card transaction slips as well.
Click to expand...
Attaching the mail from the hdfc bank.
Also the machines used were the phonepe machines and phonepe name only is printed on the slips so acquiring bank is phonepe probably. The Merchant is Navjivan Sales Adajan Surat.
 

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In my opinion, dealer is at fault here. You should pursue matter against dealer and get that surcharge amount back at least - (1.18%+1%)

It is totally wrong to register vehicle sales business as fuel pump business. I am sure they must have pressurised phonepe agent in registering this as fuel pump business at the time of onboarding and now simply passing the buck to phonepe
 
First you mail the bank and get documented proof of the MCC used !!
Then you can approach the Car Dealer asking for clarification & compensation for the wrong MCC.
Obviously they won't agree, but you keep insisting them. And remember to use format channels of communication, like email etc. for documented proofs & not over phone calls.

And when you have followed up for more than a month or two, approach consumer forum with all the documented evidence.
It will be a long fight, but there's possibility that you'll get favorable result !!

You can refer my similar story:
A

Thread '(Small) Success Story - Got Cleartrip to pay 5% amount lost due to wrong MCC !!'

Hello Technofinos,

1. Few months back, I read in a thread that SBI Cashback card is not giving cashback for flight bookings done on Cleartrip & other travel sites, as it is categorised as ineligible MCCs.
2. I checked & to my surprise, I found that I was not given cashback for my August flight booking on Cleartrip.
3. SBI customer support told me that since MCC for txn. is Railways, so no cashback was given. I made sure to get this info in writing over mail.
4. Next, I tried reaching Cleartrip support, and as expected no one had any clue what MCC was !! One of their senior supervisors...
  • Like
 
sourpai said:
In my opinion, dealer is at fault here. You should pursue matter against dealer and get that surcharge amount back at least - (1.18%+1%)

It is totally wrong to register vehicle sales business as fuel pump business. I am sure they must have pressurised phonepe agent in registering this as fuel pump business at the time of onboarding and now simply passing the buck to phonepe
Click to expand...
But why would he do that? What's the benifit for the dealer to register under fuel category?
 
As someone mentioned earlier, make a paper trail and then register a complaint at consumer forum.

For anyone wanting to make big purchases like this, always temporarily block the swipe transactions in your card and do a test transaction of small amount (Rs 100) which will fail. Then, call the customer care and check the MCC. Make sure it is not a random or excluded MCC before proceeding with the actual transaction.
 
kshitij_0 said:
But why would he do that? What's the benifit for the dealer to register under fuel category?
Click to expand...
Probably GST. Fuel is exempted from GST. Can be potential GST fraud. Probably CAs on the forum can confirm. @hpatel Please check with some CA friend / contact. If this is GST fraud your entire case can be resolved quickly by politely mentioning to the dealer abt the risks. GST / IT dept is very strict with such kinds of frauds as unlike Income Tax, GST issues can lead to account freeze.
 
kshitij_0 said:
But why would he do that? What's the benifit for the dealer to register under fuel category?
Click to expand...
Registering as fuel dealer allows MDR / portion of MDR to be charged back to the customer. Which is why fuel surcharge is charged by all petrol pumps on cc transactions. Banks later reverse it out of their own pocket
 
If MCC is of fuel category then merchant dont have to pay any mdr as its charged to customer. So first you have to ask dealer to provide refund of 1% swipe charge. You can ask for settlement details on their bank to check if dealer was charged or not. And also AFAIK no dealer can charge for digital transaction if no discount was given on ex showroom price.
And for future, always try with test transaction first and ask cc for mcc code after settlement, which usually takes 2 dyas.
 
You could get a legal notice issued towards the car dealer. Because you're not supposed to know beforehand that the MCC is wrongly mentioned on his POS device. It is his obligation to have a correct MCC. Also, the extra 1% should be refunded.
The dealer would then take it up with Phonepe.
 
So, I had a similar scenario but I was saved. My family was booking a hotel for a party and I wanted to pay via my Diners credit card, to which initially the hotel guys denied, but later said that they can get another card machine and get the txn done. I agreed, in the meantime I asked why they do so, to which he replied that the owner has multiple businesses so to save tax he switches machines to keep revenue under control or something. I asked which machine I was getting and they were getting machine from.his petrol business. I outright denied. So probably in your case too, the owner has a petrol business and it's the fault of the dealer to have right configuration in his machine. It's he who asked your to swipe on that machine and you did not did it on your wish. So I think you will win this case. Dealer knows about it already.
 
This is why if we browse through multiple threads on this forum you will see people advising to do a small transaction and check the MCC with the bank before going forward. The dealer is extra smart here. Took 1% extra from you and also made back the MDR by using a fuel MCC machine.
 
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Yeah most probably dealer owns a Petrol bunk and using its pos so that he can save on MDR which can run into 1000's.
 
romilq said:
This is why if we browse through multiple threads on this forum you will see people advising to do a small transaction and check the MCC with the bank before going forward. The dealer is extra smart here. Took 1% extra from you and also made back the MDR by using a fuel MCC machine.
Click to expand...
Agree with the small transaction part. For the later one, I call it a fraud rather, than smart. He took an undue advantages of MDR with me paying for it using this wrong categorization.
 
hpatel said:
Agree with the small transaction part. For the later one, I call it a fraud rather, than smart. He took an undue advantages of MDR with me paying for it using this wrong categorization.
Click to expand...
Yes. This looks like it will be a long fight. Keep this thread updated so if anyone else faces this issue they will be able to navigate it.
 
Register one complaint on National Consumer Helpline against dealer and car company and one with RBI Banking Ombudsman making receiving bank and phonepe opposite party. Your bank has no role in this MCC issue because merchant has listed his firm wrongly with his bank or has used his petrol pump's POS machine. I've also faced same issue with SBI and after complaining it to RBI's Hon'ble Ombudsman, surcharges were reversed.
 
hpatel said:
I recently did big transactions on my hdfc diners black credit card to purchase a car. But the dealer categorized the transaction as the fuel transaction and Hence I was levied the surcharge and no rewardpoints. The bank, After 3 weeks of follow ups officially confirmed that it's the dealer who has registered wrongly with the acquiring bank so kindly check with the dealer.

Today when I went to the dealer, I was informed that it was the phonepe (they were using phonepe machines) agent who registered it as a fuel transaction, you can raise complaint against phonepe.

Morevever, I paid around 1 percent extra to dealer for accepting the credit card itself considering the rewards points of diners black card. Now, I have been charged another 1.1% of fuel surcharge plus no rewards points or the milestone benefits. As the amount of impact is big, can anyone please help me with this case? Or a contact who can help me?

Ps. I have all docs supporting my car purchase including the credit card transaction slips as well.

Attaching the mail from the hdfc bank.

View attachment 62396

Also the machines used were the phonepe machines and phonepe name only is printed on the slips so acquiring bank is phonepe probably. The Merchant is Navjivan Sales Adajan Surat.

Note: Related Article By TechnoFino - What is MCC? Why Is It Important? Consequences of Merchants Using the Wrong MCC
Click to expand...
Update: Escalated to next level in Navjivan Motors (the dealer) attaching this mail from hdfc. Trying to connect with phonepe on twitter, but they aren't responding.

Next steps: will wait for 2-3 days if it can be resolved by them or else might have to escalate it further to the RBI Ombudsman or the consumer court. Anyone from the community can suggest any better approach or the process to raise complaint with RBI
 
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