Credit Card Fraud: Consumer Panel Orders Bank to Refund ₹35,000 for Unauthorised Transactions

In a significant ruling reinforcing consumer rights in digital banking disputes, the District Consumer Disputes Redressal Commission, Chandigarh directed a credit card issuer to refund over ₹35,000 to a customer after finding that unauthorised transactions were not properly addressed despite being reported immediately.

Background of the Case

The case involved a Mohali resident who received OTP alerts in December 2017 for digital wallet transactions that she claimed she had not authorised. Upon noticing the suspicious activity, she promptly:

  • Reported the matter to the bank on the same day
  • Got her credit card blocked
  • Filed formal dispute documents
  • Approached cybercrime authorities
  • Used banking grievance redressal mechanisms

Despite her immediate action, the disputed amount of ₹35,594 was billed to her account. Eventually, her name was reported in credit defaulter records, forcing her to deposit the disputed sum in April 2021.

Commission’s Findings

The Consumer Commission observed that:

  • The bank failed to resolve the complaint in accordance with applicable banking regulations.
  • The company did not file its written defence within the statutory time limit, leading to its defence being struck off.
  • The complainant’s evidence remained unrebutted.

The panel concluded that the transactions were unauthorised and that the failure to properly address the complaint amounted to deficiency in service.

Consumer Court Lawyer Chandigarh Panchkula Mohali

RBI Guidelines on Unauthorised Transactions

In its reasoning, the Commission relied upon customer protection rules issued by the Reserve Bank of India (RBI) governing unauthorised electronic banking transactions.

Under RBI guidelines:

  • If a customer reports unauthorised transactions promptly,
  • And there is no proven negligence on the customer’s part,

The liability may shift to the bank, particularly when the issue is reported within prescribed timelines.

Relief Granted by the Commission

The Commission directed the bank to:

  • Refund ₹35,594 to the complainant
  • Pay 9% annual interest from April 12, 2021
  • Remove her name from credit defaulter records
  • Pay ₹10,000 towards litigation costs

This order reinforces that banks must strictly adhere to regulatory standards when handling digital fraud complaints.

Key Takeaways for Consumers

This case highlights important safeguards available to credit card holders:

  1. Immediately report unauthorised transactions.
  2. Preserve OTP alerts, transaction details, and communication records.
  3. Block the card without delay.
  4. Use official grievance redressal channels.
  5. Escalate to Consumer Commission if the bank fails to act.

Conclusion

With rising digital payments and online transactions, cases of credit card fraud are increasing. However, this ruling demonstrates that consumers are not helpless. If complaints are reported promptly and proper procedures are followed, financial institutions can be held accountable for failing to protect customers.

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