Credit Card Blocked by Bank, Late Fees Charged Despite Timely Follow-Ups – Consumer Rights and Legal Remedies in India

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

Rohan Gupta, a salaried professional based in Pune, held a credit card issued by Bajaj Finserv. Around 9 April 2025, his card was abruptly blocked by the bank citing a "suspicious transaction." He responded immediately, confirming through email and phone that the transaction was fully authorised by him. Despite this, the card remained blocked. Over the following days — specifically around 19, 20, and 22 April 2025 — Rohan sent multiple written follow-ups, clearly flagging that his billing due date of 21 April was fast approaching and that he was unable to make payment because his portal access was also tied to the blocked card. Customer care representatives assured him each time that the card would be restored within 24 hours. It wasn't.

The card was finally unblocked only on 25 April 2025 — well past the due date. Bajaj Finserv then levied late payment charges and finance charges, refusing reversal on the ground that the charges were "genuine." Rohan's emails went unanswered, replaced by automated responses. He had already stated in writing that he would not accept liability for any delay caused by the bank's own failure to act.

Rohan initially tried resolving this on his own and through general online complaint forums, without success. He then approached Advocate Sudhir Rao, who regularly handles banking and consumer disputes. A formal legal notice was issued, followed by a structured complaint to the RBI Banking Ombudsman under the Reserve Bank — Integrated Ombudsman Scheme. With the complete email trail, call logs, and written communications presented systematically, the bank reversed the charges within a few weeks. The specialised procedural approach made a material difference here — the Ombudsman mechanism is specific and time-bound, and knowing how to present the evidence correctly is what moved the matter forward.

Advice in Such Cases

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 to 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.

Document everything immediately: Save every email, every SMS, every call log with dates and times. If you've told the bank in writing that the delay is their fault, that communication becomes central evidence. Don't rely on memory — print or screenshot everything now.

File with the RBI Banking Ombudsman: The Reserve Bank — Integrated Ombudsman Scheme (RB-IOS) allows you to file a complaint online at cms.rbi.org.in. It's free, time-bound (typically 30 days for bank response), and banks take it seriously. But file only after giving the bank a written complaint and waiting 30 days — or if they reject your complaint outright.

Escalate to Consumer Forum if needed: If the Ombudsman route doesn't yield results, a consumer complaint under the Consumer Protection Act, 2019 is appropriate. And here's the thing — this category of case involves nuanced procedural steps, the drafting of the complaint, the framing of deficiency in service, and the evidence marshalling, that advocates without regular banking or consumer law practice may not handle efficiently. Engaging someone with domain experience typically shortens the process considerably.

Applicable Sections of Law

This matter is governed primarily by civil and consumer law. The following provisions are directly applicable:

• Section 2(11) and Section 2(47), Consumer Protection Act, 2019: Define "deficiency" and "unfair trade practice" respectively. A bank blocking a card and then charging fees for non-payment caused by its own failure squarely falls under deficiency in service.
• Section 35, Consumer Protection Act, 2019: Governs the filing of consumer complaints before the District Consumer Disputes Redressal Commission based on pecuniary jurisdiction.
• Section 73, Indian Contract Act, 1872: Entitles a party to compensation for loss caused by breach — here, the bank's failure to restore the card as promised is a breach of its service obligation.
• RBI Master Directions on Credit Cards (2022): Impose specific obligations on card issuers regarding dispute resolution timelines and fair billing practices. Non-compliance is directly actionable before the Ombudsman.

Jurisdiction — Where to File the Case

For consumer disputes, jurisdiction lies with the District Consumer Disputes Redressal Commission at the district where the complainant resides or where the bank branch is located. Pecuniary jurisdiction: up to Rs. 50 lakhs at the District Commission, Rs. 50 lakhs to Rs. 2 crores at the State Commission, and above Rs. 2 crores at the National Commission. In most credit card fee disputes, the District Commission is the appropriate forum. Frankly, getting jurisdiction right matters more than people realise — a complaint filed in the wrong forum can be returned, wasting months.

Limitation Period

Two years. That's your window.

Under Section 69 of the Consumer Protection Act, 2019, a consumer complaint must be filed within two years from the date on which the cause of action arises. Here, the cause of action arises when the bank refuses reversal or stops responding — not from the date the card was blocked. Missing this window is fatal to the case. If there's a genuine reason for delay, Section 69(2) allows the Commission to condone delay if sufficient cause is shown — but don't count on it. Act promptly.

Interim Reliefs Available

In civil proceedings before consumer forums, interim relief in the traditional injunction sense (Order 39 CPC) isn't routinely available, but the Consumer Protection Act, 2019 under Section 38(7) empowers the Commission to issue interim orders including directing the opposite party to stop the disputed practice or restore a service. Now, before you act, understand this distinction clearly. Where the matter is taken to a civil court instead, Order 39 Rule 1 and Rule 2 of the CPC allows temporary injunctions to prevent further damage — for example, stopping the bank from reporting a default to credit bureaus like CIBIL while the matter is pending. Securing this early can protect your credit score significantly.

If You Are the Victim

• Send a formal written complaint to the bank's Nodal Officer and Principal Nodal Officer by email, clearly stating the timeline, the loss caused, and demanding specific relief (reversal of charges). Keep a copy.
• If the bank doesn't resolve it within 30 days or rejects your complaint, file with the RBI Banking Ombudsman at cms.rbi.org.in — attach all documentary evidence in one consolidated submission.
• Separately, send a legal notice through an advocate demanding reversal of charges and compensation for deficiency in service. A notice on letterhead often prompts faster bank action.
• If the bank has reported you as a defaulter to CIBIL or other bureaus during this period, flag this as an additional grievance — it constitutes a separate actionable wrong.
• Preserve all automated responses too. They demonstrate the bank's failure to engage meaningfully, which is itself evidence of deficient service before a Consumer Commission.

Documents You Must Keep Ready

• Aadhaar card and PAN card (identity proof)
• Credit card statement showing the disputed charges and the due date
• All emails sent to and received from the bank, with timestamps
• Screenshot or printout of the online portal showing access was blocked
• Call records or jio/airtel call log showing dates and duration of customer care calls
• Any SMS confirmations received from the bank acknowledging the complaint
• Bank's written rejection of the reversal request (if any)
• CIBIL report (if the default has been reported to a credit bureau)

What Evidence Is Required?

• Written communications: Emails and letters form the primary documentary evidence — they establish the timeline, the bank's assurances, and your objections on record.
• Call logs: Secondary evidence showing repeated attempts to resolve the matter through customer care.
• Bank statements: Demonstrating the charge applied and the payment due date.
• Portal screenshots: Showing inability to access or transact due to the block.
• Bank's automated replies: Evidence of non-engagement on the bank's part.
• Credit report: If a default entry was made, the CIBIL or Experian report is critical evidence of consequential harm.
• Original card welcome letter or terms: To establish what the bank contractually promised regarding dispute resolution timelines.

How Courts Typically Approach Such Cases

Consumer Commissions in India take a fairly practical view of banking disputes where there's a clear paper trail. Make no mistake, judges here aren't impressed by procedural gymnastics — they look at the facts. In cases like Citibank N.A. v. Dilipkumar Janardhan Thakkar (NCDRC), commissions have held that charging fees for defaults directly caused by the bank's own service failure constitutes deficiency. Courts look for whether the complainant acted in good faith and documented their objection before the due date. If your email trail shows you flagged the issue before the due date and the bank still didn't act, that's typically sufficient to establish the bank's liability. The burden then shifts to the bank to justify the charges.

Timeline of Legal Process

• Step 1 — Bank complaint and escalation (Week 1–4): Written complaint to Nodal Officer; wait 30 days for resolution.
• Step 2 — RBI Ombudsman complaint (Week 5–12): File online; bank typically has 30 days to respond; Ombudsman issues a decision or facilitates settlement within 45–90 days.
• Step 3 — Legal notice (parallel or following Step 1): Sent by advocate; 15–30 days for bank response.
• Step 4 — Consumer complaint filed (Month 2–4): Complaint filed at District Commission; admission hearing scheduled.
• Step 5 — Summons and written statement (Month 4–6): Bank files its reply.
• Step 6 — Evidence and arguments (Month 6–12): Documentary evidence filed; oral arguments heard.
• Step 7 — Order (Month 12–18): Commission passes order; execution if bank doesn't comply.
• Step 8 — Appeal (if needed): State Commission or NCDRC; adds 6–18 months.

Understanding the Costs

The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.

A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.

Can the Matter Be Settled Out of Court?

Yes. And often this is the most practical path.

Banks prefer avoiding Ombudsman awards and Consumer Commission orders because both carry reputational and regulatory weight. A well-drafted legal notice, combined with an active Ombudsman complaint, frequently prompts the bank's grievance team to reconsider. If the matter reaches the Consumer Commission, Section 89 of the CPC allows the court to refer parties to mediation. Lok Adalats are available for pre-litigation settlements and can award a binding, decree-like settlement without court fees. Settlement is particularly advisable here because the disputed amount is typically modest and a negotiated reversal of charges is faster and cheaper than a full trial.

Common Mistakes People Make

• Delaying action past the billing cycle: Many people wait weeks hoping the bank will self-correct. Every day of delay weakens the narrative and risks missing internal escalation windows.
• Relying only on phone calls: Verbal assurances from customer care are nearly impossible to prove. Always follow up every call with a written email summarising what was said and what was promised.
• Not objecting in writing before the due date: If you don't put on record — before the due date — that the default will be the bank's fault, the bank can later argue you simply didn't pay.
• Ignoring the credit bureau impact: A default entry on your CIBIL report can affect loan eligibility for years. Many complainants focus only on fee reversal and miss this larger consequence.
• Filing complaints without organising evidence: A poorly structured Ombudsman complaint that dumps screenshots without a clear timeline is often dismissed or resolved minimally. Presentation matters.
• Engaging an advocate without relevant domain experience: Banking and consumer disputes involve specific procedural steps — the Ombudsman mechanism, the Consumer Protection Act's forum hierarchy, and CIBIL-related reliefs — that a general practitioner unfamiliar with this area may not handle efficiently. This is one area where domain experience isn't optional.

Advocate Sudhir Rao, Supreme Court of India