Axis Bank Customers Affected by Reward Points Discrepancy; Bank Reclaiming Unauthorized Points.
Axis Bank: Due to a technical glitch, many Axis Bank customers received excess reward points without qualifying transactions. This error persisted for two years, being rectified in January 2024.
How did this happen?
Axis Bank typically awards reward points based on transaction value. If a customer cancels a transaction, the points are usually also reversed. However, in 2023, the bank failed to properly implement this process.
Exploiting this flaw, many customers placed expensive orders on e-commerce platforms, earning reward points. They subsequently cancelled the orders, receiving refunds but not having their points reversed.
How is the bank reclaiming the points?
To correct this error, Axis Bank is now deducting the excess reward points from customers' accounts.
Current Customers: The bank is removing points from their "EDGE Rewards" accounts. If insufficient balance exists, the points will go negative, potentially requiring customers to repay the shortfall in cash.
Former Customers Also Affected: Notices are being sent to former Axis Bank customers, requesting repayment for the misused reward points.
Is Axis Bank's Action Justified?
Axis Bank relies on clause G of its "Most Important Terms and Conditions" (MITC), stating that if a customer has a negative reward balance upon account closure, it must be settled before closure.
However, many experts argue this clause's application is problematic given many former customers already closed their accounts. Reclaiming funds in this scenario may present legal and ethical challenges for the bank.
The Bank's Firm Stance
Axis Bank has clarified that legal action may be taken against customers who fail to repay. However, experts suggest this is complex for those without current accounts, as it won't directly affect their credit scores.
