If you are stuck in such a situation, here is what to do.

Mr. Sameer, a resident of Nagpur, found himself in a distressing situation involving a digital lending platform, “SwiftLoan,” and a fraudulent transaction. He is now facing harassment, a damaged credit score, and a complete refusal from the company to acknowledge the fraud, despite him following all the required procedures.

Earlier this year, Mr. Sameer received an automated IVR call that appeared to be from SwiftLoan. The call warned him of an “unauthorized transaction” being attempted on his account and instructed him to enter a One-Time Password (OTP) to “block” it. Trusting the source, he entered the OTP. Immediately, instead of blocking a transaction, a sum of ₹1,850 was debited from his account for a purchase on an online platform called “QuickMart.”

Within five minutes, Mr. Sameer contacted SwiftLoan’s customer service to report the fraud. He was told to wait for seven business days for an investigation. At the end of the period, SwiftLoan summarily rejected his claim, stating that an “OTP verified transaction is a verified transaction.” This stance completely disregards the Reserve Bank of India (RBI) guidelines on zero liability for customers who report unauthorised transactions promptly.

Following SwiftLoan’s instructions, Mr. Sameer filed a formal complaint on the national cybercrime portal, which was converted into an FIR. However, the local police station in Vasant Vihar closed the case without ever contacting him or conducting any meaningful investigation. Meanwhile, SwiftLoan’s internal ombudsman also sided with the company, providing no transparent reasoning. His attempts to escalate the matter to senior management were met with false promises of callbacks that never materialized.

The harassment continues with aggressive collection calls from SwiftLoan. Worse, Mr. Sameer’s credit score, which was previously clean, has plummeted to 550 due to this single unresolved fraudulent transaction being reported as a default. He also raises a critical security concern: SwiftLoan’s system is supposed to require the mobile app to be active to generate an OTP, but he never received any transaction initiation alert, suggesting a potential internal security breach at SwiftLoan’s end that scammers exploited.

Advice in such cases

• Gather all documentation: Keep records of every communication, including call logs, emails, SMS messages, and screenshots. Note down the time, date, and name of the representative you spoke with.
• Communicate in writing: Shift all communication to email to have a written record. Clearly state the facts, reference your complaint number, and mention the RBI’s zero-liability clause.
• Report to RBI Ombudsman: If the lender does not resolve the issue within 30 days, file a complaint with the RBI Ombudsman for Digital Transactions.
• Send a Legal Notice: A legal notice drafted by an advocate can often compel the company to take the matter seriously.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

This situation involves multiple legal frameworks:

• Bharatiya Nyaya Sanhita, 2023 (BNS): Provisions related to cheating and fraud, such as Section 318 (Cheating) and Section 319 (Cheating by personation), can be invoked against the fraudsters.
• Information Technology Act, 2000: Section 66C (Punishment for identity theft) and Section 66D (Punishment for cheating by personation by using computer resource) are directly applicable to cyber frauds involving OTPs.
• RBI Circulars: The RBI has issued specific circulars on ‘Limited Liability of Customers in Unauthorised Electronic Banking Transactions’. These circulars clearly state that if a customer reports a third-party breach fraud within three working days, their liability is zero.
• Consumer Protection Act, 2019: The lending company’s refusal to act, poor service, and harassment can be considered a ‘deficiency in service’, allowing you to file a complaint before the Consumer Disputes Redressal Commission.

If you are the complainant

When you are the one lodging the complaint against the fraudsters and holding the financial institution accountable, your steps should be methodical:

• File a Cybercrime Report Immediately: The first step is to report the incident on the National Cyber Crime Reporting Portal (cybercrime.gov.in) or by dialing the helpline number 1930. This creates an official record of the fraud.
• Inform the Bank/Lender: Simultaneously, inform the financial institution in writing (email is best) about the fraud, providing the transaction details and the cybercrime complaint number.
• Preserve All Evidence: Keep screenshots of the fraudulent transaction, call logs of the scammer, any messages received, and all correspondence with the bank.
• Follow Up Persistently: Do not let the matter rest. Follow up with the police regarding the investigation and with the lender regarding the chargeback.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think. A lawyer can send a strong legal notice to the lender and guide you on filing a consumer complaint or other legal action.

If you are the victim

As the victim of such a scam, your priority is to mitigate the damage and seek redressal:

• Act Fast: The speed of your reporting is crucial. Informing the lender and filing a cybercrime report within hours increases the chances of blocking the funds and establishes your non-complicity.
• Dispute the Credit Score Impact: Write to the credit bureaus (like CIBIL, Experian, etc.) to file a dispute regarding the entry from the lending company. Provide them with the FIR copy and proof of your dispute with the lender.
• Do Not Succumb to Harassment: Inform the collection agents in writing that the debt is disputed due to fraud and that they should cease contact until the investigation is complete. Record any threatening calls as evidence.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think. An advocate can help you file a complaint in the appropriate consumer forum for deficiency of service and harassment, seeking compensation for both the financial loss and the mental agony caused.

How the police behave in such cases

Unfortunately, the experience of the police closing a case without a proper investigation is not uncommon in matters of online fraud. This can happen for several reasons:

• High Volume of Cases: Cybercrime cells are often inundated with thousands of complaints, making it difficult to investigate each one thoroughly.
• Jurisdictional and Technical Challenges: Scammers often use complex methods to hide their location and identity, making them difficult to trace. The multi-jurisdictional nature of these crimes adds another layer of complexity.
• Lack of Perceived Urgency: Sometimes, cases involving smaller amounts may be deprioritized over larger, more organized cybercrimes.
• If your case is closed without investigation, you can file an application with the Superintendent of Police (SP) or a protest petition before the concerned Magistrate’s court, requesting a proper investigation into the matter under the provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

FAQs people normally have

What evidence is required?

The more evidence you have, the stronger your case will be. Key pieces of evidence include:

• A copy of the FIR or the cybercrime complaint acknowledgement.
• Bank or card statements showing the fraudulent transaction.
• Screenshots of the scam message, call log, or fraudulent website/app.
• All email and written correspondence with the bank or lending company.
• A record of calls made to customer service, with dates, times, and summaries of conversations.
• Any communication from collection agencies.

How long will the investigation take?

The timeline for an investigation can vary significantly. A police investigation into the fraud can take several months, depending on the complexity of the case. The internal investigation by the lender should ideally be completed within the timeline prescribed by the RBI (typically up to 90 days). A case in a consumer court can take anywhere from a few months to over a year to reach a resolution. Patience and persistent follow-up are key.

Advocate Sudhir Rao, Supreme Court of India