The mantra that customer is the king is changing course for credit card users. The result: while the country's credit card customer base is shrinking, complaints against issuers are on the rise.

The annual report of the Banking Ombudsman shows that the number of complaints against credit card companies have constantly risen year-on-year.

In the financial year 2008-09, 17,648 customers have lodged complaints against issuers. This was an increase of 74 per cent over the previous year. In the same period, the number of outstanding cards dropped to 3.6 million.

"Credit card issues arise, as the customers do not understand the product and charges associated with it. In some cases involving third parties, issuers can do little but to go by computer generated records," said a credit card head.

Take the example of Anil Singh (name changed), who tried to purchase an online movie ticket using his credit card.

When his transaction was refused, he rushed to the multiplex to get a confirmation on whether the transaction had taken place or not, and was told that it did not.

However, when he received the following monthly statement, he was billed for the ticket purchase.

When he contacted the call centre, executives asked him to fill up a form. Two months have passed but the issue is yet to be resolved.

The issuer claimed that the settlement procedure can take up to three months.

To add to his woes, if the card issuer says that the transaction did take place as per their records, there is little Singh can do.

While the bank would always seek refuge in the charge slip and computer records, no one would have a clue about where the money went.

However, the banking ombudsman is the key to a possible solution, but the process could take a long time before a decision is reached.

Even if customers want to hold back transactions, issuers cannot do so as per the prescribed norms.

"The money is paid to the merchant within a day of his claim," said the spokesperson at Axis Bank.

When a customer contacts the issuer in case of a disputed entry, the card company refers the query to the service provider -- Visa or Master Card.

"These companies in turn get in touch with the merchant to address the issue," said the spokesperson for SBI cards.

Here are a few scenarios how things pan out when a cardholder finds himself/herself in a spot of bother:

• The merchant swipes the card more than once: In such a case, the transaction amount will be the same in both transactions.
• The customer will sign on just one charge slip. Under these circumstances, the credit card company asks the service provider for details of the transaction. If the merchant is unable to justify the two debits, the money is transferred back.
• Card misused or customer clueless about transactions: The issuer will ask the merchant for transaction records. This includes retrieval of charge slip and other related documents.
• "Once charge slip is received, the same is provided to the customer to take necessary action from his side," said a credit card issuer. If the customer disputes the document, the company refers the case to their 'fraud' team for investigation.

"For example, if the person who misused the card, forged the cardholder's signature the team authenticates the signature," said the card issuer.

If the card is misused while in the customer's possession, the liability lies with the cardholder.

Merchant and customer both dispute the transaction:

This happens usually for online transactions -- similar to what happened with Singh. To resolve such issues, the issuer follows the usual dispute resolution guidelines by Visa or MasterCard.

In case, the issuer and merchant are unable to resolve it, the case is passed on to the arbitration.

This is a committee where Visa and MasterCard take a decision based on the sequence of events and suggest whose fault it could be. The customer has no choice but to accept the decision.

Issuer levies charges: This depends on the nature of charge. For issues related to joining fees, interest rates and surcharge, the customer needs to call up the bank and ask them to clarify.

If it pertains to penalties for late payment (but the customer claims that he has paid on time), the person will need to fill in a dispute form.

The complaint should have documentation that supports the customer's claim. In case of due payments, for example, the person would need to attach proof of payment.

"To avoid these disputes, the customer should always use the card at reputed places.

The person should make it a point to be present when the merchant is swiping the card.

In case of online transactions, the cardholder should use it at websites that would have secure payments and good information technology infrastructure," said Subrat Pani, business head - cards, Kotak Mahindra Bank.

Take an example of ebay India, a company that facilitates purchase between two consumers.

The company has a secure channel for online payment that also acts as an escrow account between the seller and buyer.

"We release the payment only after the buyer confirms receiving goods to his satisfaction," said ebay's spokesperson.