One of the affected customers Priyesh Sharma speaking exclusively to ET Wealth Online alleged that, “Axis bank had provided no intimation and did not act during any of the months when transactions were actually happening, earned its MDR and waited for almost 6 months and has issued me a notice to share all the invoices of purchases made on merchants like Airbnb, Qatar Airways, Indigo and that too after I contacted them. For most of the transactions I have the tickets and booking confirmation, thankfully as many are still live but it’s practically not possible to store receipts for 5-6 months as we are not businessman, and we don’t have to fill any claim or get it reimbursed.”
Many Atlas credit card users received an email from Axis Bank asking for proof of transactions conducted by them over a specified time period.
“Basis review of the transactions on your Axis Bank Credit Card(s), a pattern of non-personal usage of your Credit Card(s) has been observed for the transactions undertaken by you with the following merchant(s): TRAVEL CATEGORY,” said Axis Bank in an email to an Atlas credit card customer on March 11, 2024.
Sanjeev Moghe- President & Head, Cards and Payments, Axis Bank said, “Senior level Axis Bank officers have vetted the transaction pattern of these people whose Atlas Credit Card reward points redemption were suspended. We have taken this action after careful consideration and only after noticing the transaction patterns over a long period of time. We would like to clarify that we have not cancelled the reward points, they were only suspended for redemption pending the outcome of the investigation of the proofs submitted by the specified customers.”
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What were the transactions that led to Axis Bank suspending Atlas credit card reward points redemption
As per Axis Bank, the reward points redemption has been suspended for specified Atlas credit card users who were found conducting commercial transactions in the ‘Airline’ and ‘Travel’ category.Sharma alleged that he has conducted only personal financial transactions using his Atlas credit card but still his accumulated reward points were suspended. “Recently my grandmother got sick and as a result I had to buy few tickets for Kolkata for my mother and uncle and I also became a Canadian PR and as a result of that had to make some bookings for travel to US and Canada, at the same time I was planning a trip to Europe in June, made Airbnb bookings and flight booking with everything under my name and without even letting me put my side, Axis Bank had blocked my reward points,” says Sharma.
“There is a clear line between what constitutes a commercial transaction and what constitutes a personal transaction. A customer might have a big family or book tickets for his group of friends and their relatives; hence we decide on a case-to-case basis about what might be a commercial transaction and what might be personal,” says Moghe.
The bank accuses concerned transactions violated cardholder agreement
The bank claims that the reason for the suspension of the reward points redemption for some Atlas credit card users was that the bank suspected that the card holder agreement agreed upon by the said Atlas credit card holders was violated.
According to Axis Bank Atlas credit card‘s cardholder agreement as of March 14, 2024, point number 7.2 read: “The Card may be used only for bona fide personal or official purchase of goods and / or services. You shall not use the Card to purchase anything to resell for commercial or business purpose, to derive any financial gains.”
Moghe from Axis Bank said: “The reward redemption has not been suspended for all Axis Bank Atlas credit cards; we have suspended reward points only for a few of our customers. Customers whose reward points have not been suspended can continue to earn reward points on ‘eligible transactions’ as per the card holder agreement signed with the Bank.”
Also read: How to use credit card for UPI transactions if you have Visa or Mastercard credit card.
What Axis Bank said after receiving the transaction proofs
According to Sharma, upon sharing his travel and other transaction documents with Axis Bank, he was asked to furnish specific details. A copy of the email sent by Axis Bank was shared by Sharma to ET Wealth Online.
Axis Bank after receiving the documentary proofs from Sharma said in an email, “We acknowledge the documents shared by you. Your credit card can be used only for personal expenses and purposes, and any other transactions (including for business or commercial purposes) is prohibited under Axis Bank’s Card Agreement and Most Important terms and conditions. We would request you to share us the invoices/end use receipts for all the transactions, made with Airbnb Payments India PVT, CRED, Indigo, Interglobe Aviation LTD, Jet Privilege Priva, QA between September 2023 and November 2023.”
Reward points are typically considered as a bonus for credit card customers. Based on their preferred spend category people select a credit card that gives them higher reward points. The process works seamlessly as credit card users accumulate these points over many months or even years.
Atlas card is a travel-focused credit card, and the customer appears to have utilised the card for travel-related expenses. If the customer has genuinely used the card for personal expenses, then this could look like a harrowing experience when the credit card issuer asks you to submit bills of each and every transaction despite sharing the overall details of your trip.
What might Axis Bank do if the suspected cardholders are found guilty of conducting commercial transactions?
According to Moghe, “The Bank reserves the right to cancel or continue its relationship with the Atlas credit card holders whose reward redemption have been suspended after investigation of the submitted proofs if they are found to be conducting commercial transactions.”
Lawyers say that Axis Bank has the right to forfeit the points accrued only if it is proved that the customers violated the card holder agreement. “The terms and conditions of the bank with the card holder will govern the future course of action. If the card holders have violated the terms and conditions or have cheated the bank in any way, then the bank will be well within its right to forfeit the points accrued. The reward points accumulation is part of scheme, and the card holder will have to act in accordance with the scheme and conditions imposed therein. Bank can be sued and shall be liable for paying compensation to customer if customer has suffered any loss or harassment due to wrongful forfeiture of points,” says Ruby Karanjawala, Senior Partner, Karanjawala & Co, a law firm.
But what happens if the customer is proven to have done a genuine transaction? Will it be sufficient for him to receive just reward points? How many credit card users will feel comfortable if they are asked to submit documentary proof of each transaction to earn their reward points? The outcome of this episode will have a bearing on other credit card customers as well.