Rs 61,000 card payment ‘not credited’, man wins Rs 1 lakh payout from bank, fintech app

An Andhra Pradesh consumer commission recently held a financial technology app and a bank liable for deficiency in service, directing them to pay Rs 1 lakh to a man who had allegedly paid his credit card bill of nearly Rs 61,000 using the app, but the amount was never credited to his credit card account.

Hearing a plea filed by the man, president G Venkateswari and member Karaka Ramana Babu of the Vishakhapatnam District Consumer Disputes Redressal Commission stated, “Mere reliance upon the general terms and conditions does not, by itself, establish that the complainant (the man) committed an error while making the particular transaction in question. No convincing material has been placed before this commission to show that the complainant intentionally or negligently selected a different credit card account or that the disputed amount was credited to an account other than the one for which payment was intended.”

The district commission’s September 19 order directed the bank and the app to refund Rs 60,911 to the man and return double the amount of penalty that he was asked to pay. It also directed the bank and the app to pay Rs 30,000 as compensation for causing mental agony and financial suffering and Rs 10,000 for litigation costs.

The man claimed that on July 8, 2024, he had paid his credit card bill of Rs 60,905 using a financial technology app, and while the amount was debited from his account, it was not credited to his credit card account maintained by the bank.

The man alleged that he had immediately raised a complaint with the app, and he was told that the payment would take up to two working days to reflect in the credit card statement, but the payment date would be July 8, 2024.  However, as per the man, the payment was never credited, and the bank treated the bill as unpaid and asked him to pay a fine as he was a “defaulter”.

The man stated that he had also approached the bank for clarification, but his grievance was not properly resolved, and he was asked to clear the unpaid bill to avoid further charges. The man further argued that because of the fintech app and the bank, he suffered financial loss and his credit score was adversely affected. He had also sent a legal notice to the app and the bank, but the matter remained unaddressed.

No control over app: Bank

Advocate Aspana Srinivasa Rao, appearing for the fintech app, argued that it was only a third-party intermediary and had no authority to reverse a payment once the transaction was successful. The counsel informed the court that when the man’s transaction was checked, it was found that the payment was made to an incorrect credit card account and hence he had suffered a loss because of his own error.

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The counsel also submitted that the app’s customer support had advised him to approach the bank with the UTR number, as only the bank could trace, transfer or refund the amount and that he was also informed about the procedure for tracing the transaction and the conditions relating to a goodwill refund. A UTR or Unique Transaction Reference is a unique alphanumeric code assigned to identify and track electronic bank transactions in India.

Advocate Ajjrapu Srinivas, representing the bank, stated that it had no control over the app as it was an independent third-party platform and such transactions were initiated by the customer using confidential card credentials. He submitted that the bank had not received any payment for the credit card.

‘Ultimate destination’

The district commission noted that the app admitted to the fact that the transaction was successfully processed and therefore, “after accepting and processing the transaction through its platform, it cannot simply leave the customer to trace the amount without satisfactorily establishing where the payment was ultimately credited.”

It observed that neither the bank nor the app gave a full statement of the man’s credit card account to the commission, nor did they disprove the transactions made through the app, which proves that the man’s payment was not “properly traced and reconciled between the service providers”.

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According to the district commission, the app and the bank, being service providers dealing with electronic payment and credit card services, “were expected to properly investigate and resolve the disputed transaction instead of shifting the responsibility upon the consumer”.

The commission held that the bank and the app had “miserably failed” to explain the “ultimate destination” of the amount and “such failure in resolving the transaction, irresponsible behaviour or withholding deliberate information of the customers and the consequential levy/payment of charges” amounts to deficiency in service.

Takeaway

The ruling establishes the obligation of both apps and banks to ensure proper service and assistance to their customers and that the concerns of consumers must not be ignored, causing them unnecessary inconvenience.

For consumer-related grievances, individuals may contact the consumer helpline in their respective states and union territories (Andhra Pradesh: 1800-11-4000) or call the National Consumer Helpline on 1915 for assistance.

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