A Possible 400 crores scam by HDFC Bank.You could be a victim too, even with other banks. Read how.

Rashmi R Padhy
Feb 21, 2017 · 5 min read

Banks are a custodian of the money we deposit, our hard earned money. We do so primarily to keep our money safe. Imagine the very institution you trust to keep your money safe, is the one who is scamming and taking money away from you. How would you feel?

This is exactly what HDFC Bank is doing. They are using tricks to use the gaps and the loop holes in the banking regulations. They are doing this to scam its customers for crores of money every 3 months(quarter). If it is not stopped now, it is going to happen every month and then spread to other banks also to use this method to scam their customers.

The VAS Fraud by TELCOs

Almost everyone would remember the VAS fraud by the TELCOs. This is how they used to do it.

Telco would activate a VAS(e.g. caller tune, or Cricket Updates) on your number, as trial for 30 days.

If you continue using it beyond the first month, they start charging you from the next month onwards.

They would send a SMS informing about that free trial.

If you don’t to be charged, you can unsubscribe dialing some number.

Most unsuspecting users might skip the SMS from TELCOs and end up getting charged.

This is what they actually banked on, to scam the users.

I am pretty sure you would have been a victim of this or know someone who has been a victim. You will find a lot of articles and cases if you just Google, “VAS fraud India” or “VAS auto activation Fraud”. e.g. This, this and this

After a lot of agony and pain, TRAI finally took a strong stand against this. After TRAI stepped in, finally the Telcos fell into place and we have not heard of too many complaints afterwards.

It went on for a good 5 years before any action was taken. There were a lot of people cheated, scammed and their money stolen from them. No one has done an estimate to the amount of VAS fraud. This scam could easily run into 1000’s of crores of unsuspecting people’s money.

HDFC Bank’s PMF Fraud / Scam

Similar to the VAS fraud of yesteryear’s, HDFC Bank is scamming their customers today with Program Management Fee (PMF). This is how they are structured.

HDFC Bank auto upgrades their customer to Classic or Preferred Banking program with a trial period.

This program carries a program management fees of Rs.100/- per quarter.

If the user do not want, they need to unsubscribe following a link.

The intimation for this change is sent via an email, with the unsubscribe option.

Most unsuspecting customers ignore this email, and hence are charged fees as soon as the trial period is over.

Looks familiar. Because it is. They have bundled the old VAS fraud in a newer packaging and scamming people in the same way TELCOs did earlier.

Here is the email I got:

Image for post
Image for post

Here are few other examples: this and this. This is a relatively new scam. Most victims are not even aware of this. If you read the tweets and comments on the articles linked above, you can see that this is being done in a large scale.

They would have calculated that about 15–20% customers would come back and unsubscribe from this program. The rest 85% — 90% users would miss the email, and continue getting charged.

While Rs.100 per quarter looks small, here is the actual number of the entire scam.

Total number of HDFC Bank customers: 12 million or 1.2 Cr

Program activated for 80% of the base ~ 1 Cr customers

Fees per year: Rs. 400

Total Amount of Scam: Rs.400 Cr per year

This is the magnitude of the scam, Rs.400 Crores.

Unless, this is stopped right now, they will increase the frequency of the charges to monthly. And then other private banks like ICICI, Kotak, AXIS, and others will follow.

This needs to stop now. And it is in our hands to stop this.

If we delay, there would be crores of money looted from unsuspecting customers. In fact, please your emails now. You might already be getting scammed without your knowledge.

It has been going on for more than a year

If you check the article link above, this appears to be going on for more than a year. Or may be they have been testing this program with a few customers. When they have been successful, they are rolling out to more and more unsuspecting customers. Scary stuff.

It is not that HDFC bank does not make money from our account. They ask to keep a minimum balance in the account, else we are charged a high fees and fine. They charge money for IMPS and NEFT transaction. They use our money to give loans to businesses and make money on them as well.

As if those were not enough, they have stooped down to cheating to make more money. As the saying goes: “They are making enough for their needs, but not enough for their greed”.

You can help. Here are a few ways in which you can help:

  1. Send email to RBI asking them to act against such fraud schemes and programmes. email id: cgmcepd@rbi.org.in and your respective account email id from this list. (cc my email id: hdfcscam@koove.com)

Here is a sample email and Subject which can be used:

Subject: Help Stop Scam by HDFC Bank — Auto Activation of paid programs without consent

Hello Sir/Madam,

For the past year or so, HDFC bank has been scamming me and numerous other of their customers. Here is their modus of operation:

1. Auto Upgrade savings account to Classic Banking or Preferred Banking Program.

2. Auto Activate a deduction of Rs.100/- per account per quarter.

3. No prior consent or approval taken from the customer.

4. They just send an email announcing such a program, with an Opt-Out link.

This is a similar modus of operation which the TELCOs used to do on auto activation of VAS on their customers. I have fallen for this scam. Lot of unsuspecting customers are still unaware of this scam and losing their money.

I request you to take strict action against this. Not only for my account, but also for the lacs of customers whom they are defrauding and charging such fees.

PFA a screenshot of the email and how the program is structured.


You can also send email to RBI, even if you are not yet scammed, and support this cause.

2. Tweet, Share on Facebook and make your friends and family aware of this scam. You could help them save some money. Tag @HDFC_bank and @RBI

3. If you have your friends in media, newspaper and popular blogs, Please share this link with them. We need all the help possible, to make sure we put a stop to this practice.

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