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Careful when you subscribe to SIP in Mutual Funds!

Recently I started a SIP with DSP Merrill Lynch MF Equity fund Regular Dividend option. I chose the SIP route and went through a MF agent. I signed the form and handed it over to the MF agent, who agreed to hand over to the company after completing the form. I opted for ECS to relieve myself of the pain of signing cheques.

The first month went off fine as I started only during the third week. The problem started in the second month. DSP ML has an option to subscribe to SIP on four different dates of the month and my account started getting debited on all the four days. Initially I didnt realise till my account was debited for the 3rd time in the same month. Immediately I called the registrar of DSP ML MF, Computer Age Management Services (CAMS), Chennai. I told them patiently that I have opted for one single debit in a month but my bank account is getting debited on all the four days in a calendar month. They informed that is how the form has been filled up and handed over to them. Then I called up the agent to enquire about this but he also confirmed that he didnt select on all dates in a month option. Unfortunately, I didnt have a photo-copy of the submitted form and I couldnt prove that an error has creeped in at CAMS side.

Then I asked for a way out of this since my bank account was running out of balance. A novel idea was given by the CAMS staff on the phone. Withdraw all the money from that bank account so that the ECS debits doesnt happen. I found that absurd and the alternative I got was a letter asking to stop the ECS debit on all dates in a month. I went and handed over the letter to the local CAMS office and my agony continued even after that. My debits continued to happen. I was forced to call them atleast 3 times after I submitted the letter to find out why my account is still getting debited. Finally, the debits stopped after a letter and 3 angry phone calls running for a minimum of 15 minutes on each occasion. All this I have to undergo for the fault of not ensuring that the form was properly filled up. Now the SIP is 4 months old but I have already paid 8 instalments.

The story doesnt end there. When I received the October month statement, I noticed that I have been allotted some units under the growth option all of a sudden. So again I started calling CAMS for the reason. I patiently explained that I have been allotted units under a different scheme than I originally applied for and asked them to explain. The guy on the other side from the CAMS Call Centre took my number and promised ot call me in another 15 minutes. I received no information for the next two days and then I have to call them back. This time luckily an intelligent girl picked up and narrated the story and asked her to find out the reason. She promptly called back and informed that they have processed one ECS in September but didnt allocate any units and they decided to allot me funds under DSP ML Equity Fund Reg Growth Option in October. Nobody called me to inform that there has been an excess debit nor did they ask me what to do with the funds. Ofcourse, it is my mistake also not to have reconciled my bank account with the ECS debits for DSP ML Mutual Fund. I finally agreed to take those units since I didnt have any more patience.

What I learnt from this episode?
1. Always a retain a copy of the application form.
2. Personally fill up the MF application form and dont leave it for the MF agent to fill up details citing lack of time.
3. Reconcile your bank account every month with the auto debits which are happening. This not only applies to MF ECS debits but also for other loans and utility bill payments.

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