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 working professional from Indore, was browsing online skill programmes in early March 2025. He came across a digital marketing course offered by a company called SkillNest Learning Pvt. Ltd., based out of Pune. A sales representative called him and guided him through the registration process over the phone, step by step.
What Rohan didn't realise was that buried inside the registration flow, SkillNest had pre-ticked a loan option through their lending partner — a fintech NBFC called QuickCredit Finance. A loan of Rs. 18,500 was disbursed against his name without any clear verbal or written intimation during the call. The moment Rohan received the confirmation message, he understood what had happened. He called SkillNest the same evening, around 18 March 2025, demanding cancellation of both the course enrolment and the loan.
For nearly three weeks after that, Rohan kept calling. Same response every time: "your request is being processed." Nothing moved. Fed up and anxious about his credit score being affected, he approached Advocate Sudhir Rao. A legal notice was sent to SkillNest and QuickCredit Finance simultaneously, invoking the Consumer Protection Act, 2019 and RBI's lending guidelines on informed consent. The earlier follow-up calls had yielded nothing, but once the structured legal approach began, the loan account was marked for cancellation and Rohan received a full refund within weeks of the notice being served.
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.
Send a Formal Legal Notice Immediately: Don't just keep calling customer care. Frankly, phone calls achieve very little when a company has already decided to stonewall you. A written legal notice under the Consumer Protection Act, 2019 puts the company on record and starts the clock. It signals seriousness and often triggers faster internal escalation than phone calls ever will.
File a Complaint with the RBI Ombudsman: If the NBFC or lending partner refuses to cancel the loan, file a complaint through the RBI's Integrated Ombudsman Scheme at cms.rbi.org.in. It's free, it's fast, and it has real teeth. Regulators don't take unauthorised loan disbursals lightly.
Engage a Domain-Experienced Advocate: Consumer protection and fintech lending disputes involve specific procedural timelines, evidentiary requirements under the Consumer Protection Act, 2019, and coordination with regulators. Now, before you act, understand that advocates who regularly handle such matters know these nuances and can prevent procedural missteps that general practitioners may overlook.
Applicable Sections of Law
- Section 2(11) — Consumer Protection Act, 2019: Defines "deficiency in service," which squarely covers failure to disclose material terms of a financial product during enrolment.
- Section 2(47) — Consumer Protection Act, 2019: Covers "unfair trade practice," which includes misleading representations and non-disclosure of loan obligations during a sales call.
- Section 19 — Consumer Protection Act, 2019: Provides the right to file a consumer complaint before the District Consumer Disputes Redressal Commission.
- Section 23 — Indian Contract Act, 1872: A contract entered into without free, informed consent, or through misrepresentation, is voidable at the option of the aggrieved party — directly applicable to the undisclosed loan agreement here.
Jurisdiction — Where to File the Case
This is a civil consumer matter. The appropriate forum is the District Consumer Disputes Redressal Commission (DCDRC) under the Consumer Protection Act, 2019. Pecuniary jurisdiction: the DCDRC handles complaints where the value of goods or services and compensation claimed does not exceed Rs. 50 lakh. Territorial jurisdiction lies where the complainant resides, where the cause of action arose, or where the opposite party's registered office is situated. And here's the thing — if the loan amount is small, the DCDRC is far more cost-effective and time-efficient than a civil suit in a District Court. Choose your forum carefully.
Limitation Period
Two years. That's what you get. Under the Limitation Act, 1963, and 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. In this type of case, the limitation clock starts from the date the unauthorised loan was disbursed or from the date the company refused to cancel it. Missing this window can be fatal to your complaint. Condonation of delay is available if sufficient cause is shown, as affirmed in New India Assurance Co. Ltd. v. Shanti Misra, 1975, but you shouldn't rely on that as a fallback. Don't test it.
Interim Reliefs Available
Before the final order, you can seek interim reliefs that prevent the situation from worsening. The District Consumer Commission can grant interim orders directing the NBFC to freeze recovery proceedings against you during the pendency of the complaint. Under Order 39 Rule 1 and 2 of the CPC (read with the Consumer Protection Rules), a status quo order can be sought to stop the lender from reporting the loan as overdue to credit bureaus like CIBIL or Experian. Make no mistake, this step matters enormously. A negative credit entry, once made, can take months to reverse even after you win the case. Seeking an early interim order protects your credit health throughout the litigation.
If You Are the Victim
- Take screenshots of every communication — WhatsApp messages, emails, app notifications, and SMS confirmations — immediately after you discover the unauthorised loan.
- Call the NBFC's official customer care and submit a written cancellation request by email the same day. This creates a timestamp record that is invaluable in proceedings.
- File a complaint on the RBI's Integrated Ombudsman portal (cms.rbi.org.in) if the lender does not respond within 30 days of your complaint to them.
- Do not make any EMI payment on the unauthorised loan, as doing so may be construed as implied acceptance of the loan terms.
- Consult an advocate promptly and authorise a formal legal notice to both the course provider and the lending NBFC, citing specific provisions of the Consumer Protection Act, 2019.
Documents You Must Keep Ready
- Aadhaar Card and PAN Card (identity and address proof)
- Screenshot or PDF of the course registration confirmation received from the company
- Loan sanction letter or disbursal SMS/email received from the NBFC
- Call records or call logs showing dates and times of your cancellation requests
- Written correspondence — emails, WhatsApp chats — with both the course provider and the lender
- Bank account statement showing any deduction or credit related to the loan
- CIBIL or credit bureau report showing the loan entry, if any
- Any recorded acknowledgement from the company's customer care regarding your cancellation request
What Evidence Is Required?
- Proof of enrolment without disclosure: Course registration confirmation that does not mention a loan product — this is primary evidence of non-disclosure.
- Loan disbursal record: The NBFC's SMS, email, or app notification confirming disbursement — establishes the loan was created.
- Your cancellation requests: Dated emails and messages to the company demanding cancellation — proves you acted promptly and did not ratify the contract.
- Call logs: Timestamped call history showing repeated follow-ups — secondary evidence corroborating your account of events.
- Credit bureau report: If the loan appears on CIBIL, this is direct evidence of harm suffered.
- Terms and conditions of the course: The fine print (if available) — to show whether loan terms were adequately disclosed or buried in obscure language.
How Courts Typically Approach Such Cases
Consumer Commissions in India take a consumer-friendly approach in cases involving undisclosed financial obligations bundled with service agreements, especially following the Supreme Court's guidance in Spring Meadows Hospital v. Harjol Ahluwalia, 1998, which emphasised that service providers must act with full transparency. Courts generally scrutinise whether informed consent was obtained before a financial product was activated. If the company can't produce a signed loan agreement with clear disclosure, the Commission tends to treat the disbursement as a deficiency in service. Recovery proceedings initiated by the lender during pendency of the complaint are viewed dimly.
Timeline of Legal Process
- Week 1-2: Gather all evidence; send formal legal notice to course provider and NBFC (allow 15-30 days for response).
- Week 3-4: File RBI Ombudsman complaint if no resolution from lender.
- Month 2: File consumer complaint before the District Consumer Disputes Redressal Commission with all documents.
- Month 2-3: Commission issues notice to opposite parties; seek interim order to freeze credit bureau reporting.
- Month 3-5: Opposite parties file written statement / reply.
- Month 5-8: Evidence stage — affidavits filed by both sides.
- Month 8-12: Arguments heard; order passed.
- Post-order: If the opposite party does not comply, execution proceedings initiated. Appeals lie before the State Commission within 45 days.
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 this is often the faster route. Before filing a formal complaint, a well-drafted legal notice sometimes prompts the company to resolve the matter within days, as Rohan's case demonstrated. If the complaint is already filed, Section 89 of the CPC allows courts to refer disputes to mediation or conciliation. Consumer Commissions also have authority to refer matters to their own mediation cells. Lok Adalats are another avenue — pre-litigation Lok Adalats can take up consumer disputes and pass awards that are final and non-appealable. Settlement is particularly advisable here because the loan amount is small, and a negotiated full cancellation with a no-dues certificate is often quicker and less stressful than a full evidentiary hearing.
Common Mistakes People Make
- Delaying action: Many people spend weeks calling customer care hoping for internal resolution, losing valuable time. The moment you identify an unauthorised loan, act in writing the same day.
- Making EMI payments: Paying even one EMI on an unauthorised loan can be interpreted as acceptance of the loan contract, significantly weakening your legal position.
- Not preserving digital evidence: Deleting WhatsApp chats, clearing browser history, or losing the original registration email can remove critical primary evidence from your case.
- Approaching only the course provider: The NBFC that disbursed the loan is a separate legal entity and must be addressed independently — ignoring them leaves the loan active even if the course is cancelled.
- Posting details on social media: Public posts about the dispute can complicate proceedings and may be used by the opposite party to argue reputational harm or to seek counter-relief.
- Engaging an advocate without relevant consumer and fintech experience: This category of case sits at the intersection of consumer protection law, RBI lending regulations, and contract law. An advocate who doesn't regularly handle consumer forum matters may miss procedural timelines, fail to seek an interim order at the right stage, or underestimate the role of RBI guidelines — all of which can slow down or weaken the outcome.
Advocate Sudhir Rao, Supreme Court of India