Digital payments in India are now a part of daily life thanks to UPI, mobile wallets and online banking. Digital payment methods are a great convenience that allows for fast and flexible payments. However, they also feature risks, like failed transactions, fraud and unauthorized deductions. If your money is lost or stuck in a digital transaction, you have rights as a consumer, and legal remedies are available to you.
In this article, we explain the legal steps to resolve digital payment disputes in India, the laws that protect you, and how to get your money back efficiently.
What Kind of Payment Problems Are Legally Actionable?
The most common issues are as follows:
- Money deducted but no transaction confirmation
- Fraudulent or unauthorized payments
- Paid online but didn’t receive product/service
- Double debits or overcharges
- Scam links or phishing leading to financial loss
Pro Tip: Always take a screenshot and note down the transaction ID. It’s your first defense.
Which Laws Actually Protect You and Help You Get Justice?
There’s a full legal ecosystem you can tap into.
IT Act, 2000: India’s Cyber Law
- Section 43 and 66: Protect against hacking/data theft
- Section 66C and 66D: Punishes OTP fraud, identity theft
RBI Guidelines: Your Digital Transaction Shield
- Regulates UPI, wallets, card payments
- “Digital Payment Security Controls, 2021” ensures secure systems
- Ombudsman Scheme ensures free legal redressal
Consumer Protection Act, 2019
- Recognizes digital payments as part of consumer rights
- CCPA can act against large-scale digital frauds
Indian Penal Code (IPC)
- IPC Sections like 419, 420, 468/BNS Sections like 319 (2), 318 (4), 336 (3) deal with cheating and online forgery
Step-by-Step Process Followed to Recover Money
Step 1: Raised a Complaint with the UPI App (Google Pay)
A client opened the app, used the Help & Support section, submitted the transaction ID and a screenshot. A response came within 24 hours, but the refund didn’t process. So, he escalated further.
Important: Important information to note here is that, according to the Reserve Bank of India (RBI) rules, you should report any unauthorized or fraudulent transactions within three days of the incident, to be eligible for zero liability and refund in full.
Step 2: Escalated to the Grievance Redressal Officer
Most apps don’t advertise this, but every provider is required to have a Grievance Redressal Officer (GRO).
One of the clients found the GRO contact on the website and sent a formal email with his complaint number. Still no luck after 30 days.
Step 3: Filed a Complaint with the RBI Ombudsman
One of our clients went to www.cms.rbi.org.in and made a detailed online complaint.
Here’s what he learned:
- It’s free
- You must first try resolving the issue with the app or bank
- The Ombudsman issues decisions within thirty to ninety days.
Real Case: Rohit Srivartava v. SBI Cards (2022): Ombudsman ruled to repay the ₹15,000 after the unauthorized use was reported to them within three days of the payment being made.
Step 4: Called the National Consumer Helpline (NCH)
We dialled 1915, and the agent guided us on how to escalate if RBI didn’t resolve it.
Bonus: They also forward unresolved matters to relevant consumer commissions or regulatory bodies.
Step 5: Filed a Complaint in the Consumer Forum
Most disputes get resolved before this step. But if not, you can take legal action based on the claim amount:
- District Commission: Up to ₹50 lakhs
- State Commission: ₹50 lakhs to ₹2 crores
- National Commission: Above ₹2 crores
Relief You Can Seek:
- Refund of your lost money
- Compensation for harassment or service failure
- Legal cost recovery
Real Case: Vikas Yadav v. Paytm Payments Bank (2021): Held Paytm culpable for not complying with KYC process and ruled to repay ₹30,000 and ₹10,000 in compensation.
Step 6: Reported to Police or Cyber Cell
In another case involving our client, she lost ₹12,000 due to a phishing QR code.
We did this:
- Filed an FIR at the local police station
- Reported it online: www.cybercrime.gov.in
- Cyber Cell followed up within a week
Real Judgment: S. Subramanian v. ICICI Bank (2020): Court allowed police action for phishing; bank was also told to improve safeguards.
Other Fast-Track Options That Helped People
Twitter/X Complaints Work Well
Tagging banks or apps on social media often leads to faster resolution. Use tags like:
@Paytm @RBI @Cyberdost
Public Grievance Portal: CPGRAMS
If nothing works, try www.pgportal.gov.in. This complaint reaches regulatory ministries directly.
How to Protect Yourself from Digital Payment Fraud?
The steps are as follows:
- Activate OTP/email alerts for every transaction
- Never click on suspicious links or QR codes
- Use only official apps
- Lock wallet or card immediately if lost
- Keep UPI PIN, CVV, OTP completely private
- Update mobile number and KYC regularly
What’s New in Law That Helps You Even More?
Card Tokenization: RBI (2022)
Merchants can’t store your card info anymore, reducing risk of theft.
RBI Customer Liability Rules
- Report within 3 days: zero liability
- Report within 7 days: limited liability
Digital Personal Data Protection Act, 2023
Gives you control over your payment data and privacy.
Conclusion
You don’t need to fight digital fraud alone. The most important points to remember is that you have a robust remedy in India, as long you act quickly, keep proper records and escalate properly.
If your event resulted in lost money either from a wrongful deduction or fraudulent transfer of money, begin by going through the app or bank and then proceed step by step until you resolve the problem.
One can talk to lawyer from Lead India for any kind of legal support. In India, free legal advice online can be obtained at Lead India. Along with receiving free legal advice online, one can also ask questions to the experts online free through Lead India.
FAQs
1. Can I still get a refund if I reported a fraudulent transaction after 3 days?
Yes, but your refund may be partial or based on your delay. RBI allows limited liability if reported within 4–7 days. After 7 days, the bank decides compensation on a case-by-case basis.
2. What documents or proof should I keep when filing a complaint about a digital payment issue?
Maintain transaction ID, bank statement screenshot, communication records (emails, app chats), FIR (if fraud), and screenshots of error messages. These serve as primary evidence.
3. Can I file a complaint directly with RBI if my bank doesn’t help?
No, you must first raise the complaint with your bank or payment provider. You can only use the Integrated Scheme to make a complaint with the RBI Ombudsman if the problem is not remedied within 30 days.
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