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

A client, Mr. Alok Sharma, took a gold loan from a digital lending company called “GoldenTrust Loans.” He made a substantial part-payment of approximately ₹95,000, assuming it would be adjusted against the principal amount to lower his future interest burden. However, the company silently allocated most of this payment towards accrued interest, a fact that was not communicated to him. The company’s mobile application, which was the primary interface for the loan, consistently failed to show any outstanding interest dues or payment alerts. The only notifications Mr. Sharma ever received were promotional messages for new loan products.

When he later discovered that a payment was considered “missed,” he contacted customer support. Initially, one representative claimed that SMS and app reminders are always sent. In a subsequent conversation, another representative admitted that the company does not, in fact, send such reminders for due interest. The company’s final stance was that it is the customer’s responsibility to manually check the app for dues. Mr. Sharma maintained that he did check the app regularly, but no dues were ever displayed on the interface.

Compounding the issue, the GoldenTrust Loans app would undergo maintenance every night after 11 PM, preventing any transactions. This crucial detail was not mentioned in the loan agreement or communicated to customers. Due to this undisclosed maintenance window, Mr. Sharma was unable to make a payment one night, which led to him being penalized. He was pushed into a higher interest bracket and was compelled to pay additional renewal charges to revert to his original, lower interest rate. Despite his repeated requests for a clear statement of account and explanations, the company delayed providing the information and refused to acknowledge any fault with their app or communication process. They unfairly shifted the entire blame onto him, even suggesting he should have taken a screenshot as proof that no dues were visible—an unreasonable expectation for any customer.

Advice in such cases

• Document Everything: Preserve all communication with the lender. This includes emails, chat transcripts, and records of phone calls (with dates and times). Take screenshots of the app’s interface, especially the sections where dues should be displayed.
• Review the Loan Agreement: Carefully read the terms and conditions of your loan agreement. Look for clauses related to interest calculation, payment notifications, penalties, and app maintenance schedules. The lender’s failure to adhere to these terms constitutes a breach of contract.
• Send a Formal Complaint: Draft a detailed formal complaint and email it to the company’s official grievance redressal officer. Clearly state the sequence of events, the deficiency in their service, the lack of notifications, and the financial loss you have incurred. Demand a reversal of all unfair charges.
• File a Complaint with the RBI Ombudsman: If the company does not resolve your issue within 30 days or provides an unsatisfactory response, you can file a complaint with the Reserve Bank of India’s Ombudsman for Digital Transactions. This is a powerful and effective mechanism for resolving such disputes.
• 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 several legal and regulatory frameworks designed to protect consumers:

• The Consumer Protection Act, 2019: The lender’s actions, such as the non-transparent adjustment of payments, failure to send due notifications, and misleading app interface, can be classified as “deficiency in service” and “unfair trade practices” under this Act. You have the right to seek redressal in a Consumer Disputes Redressal Commission (Consumer Court).
• Reserve Bank of India (RBI) Guidelines: The RBI has issued a Fair Practices Code and specific guidelines for digital lending. These mandates require lenders to be transparent about all charges, interest rates, and terms. The lack of proper notification and a non-functional grievance redressal mechanism are violations of these RBI directives.
• The Indian Contract Act, 1872: The loan agreement is a contract between you and the lender. If the lender failed to provide the services as promised (e.g., a functional app for payments, clear communication), it constitutes a breach of contract.

If you are the complainant

As the person filing the complaint, your primary goal is to build a strong case based on evidence. Follow these steps methodically:

• Organize Your Evidence: Create a file with the loan agreement, all payment receipts, bank statements showing the debits, screenshots of the app, and copies of all correspondence with the company.
• Draft a Legal Notice: Through an advocate, send a formal legal notice to the lending company’s registered office. This notice will outline your grievances, cite the relevant laws being violated, and state your demands (e.g., refund of excess charges, correction of your account). This often prompts companies to seek a settlement.
• Initiate Formal Proceedings: If the legal notice is ignored, you can proceed with filing a formal case. This could be with the RBI Ombudsman or the Consumer Court, depending on the strategy advised by your lawyer.
• 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.

If you are the victim

If you find yourself in a similar situation, it is crucial to act decisively to protect your rights and finances.

• Stop Relying on Verbal Communication: Do not rely on promises made by customer service executives over the phone. Insist on written communication via email for all queries and resolutions. This creates a paper trail.
• Assert Your Rights: When communicating with the company, clearly state that their lack of notification and misleading app constitute a deficiency in service. Do not accept blame for their system’s failures.
• Seek Professional Help: Financial disputes involving digital lenders can be complex. The company will have a legal team to defend its position. Engaging a lawyer levels the playing field.
• 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.

How the police behave in such cases

This is primarily a civil dispute, not a criminal one. The police have limited jurisdiction in matters concerning contractual obligations, deficiency in service, or violations of banking regulations. Therefore, approaching the police is generally not the correct first step. They will likely direct you to the appropriate civil forums, such as the Consumer Court or the RBI Ombudsman. Police involvement would only be warranted if there is clear evidence of criminal intent, such as fraud or cheating under the Bharatiya Nyaya Sanhita (BNS), which can be difficult to prove in such cases.

FAQs people normally have

• Is a lender required to send payment reminders?
  While not always a statutory mandate for every type of loan, the RBI’s Fair Practices Code encourages transparent and clear communication. For digital loans where the app is the primary interface, failure to provide critical alerts like payment dues can be strongly argued as a deficiency in service.
• Can a lender put the entire responsibility on the customer?
  No. The principle of shared responsibility applies. While customers are expected to be diligent, the service provider (the lender) has a duty to provide a functional, clear, and non-deceptive platform. Hiding dues or having undisclosed maintenance windows is a failure on their part.
• Is an undisclosed app maintenance window a valid reason for a missed payment?
  Absolutely. If the only method of payment was unavailable during a critical time without prior notice, the customer cannot be held responsible for the resulting delay. This is a strong point in your favour.

What evidence is required?

To build a successful case, you will need:

• The original loan agreement and all related documents.
• Bank statements and receipts confirming all payments made.
• Screenshots of the app’s home screen, payment section, and notification area, showing the absence of any due alerts.
• All email and chat correspondence with the customer support and grievance redressal teams.
• A detailed timeline of events, including dates of payment, calls to customer care, and discovery of the issue.

How long will the investigation take?

The timeline can vary:

• RBI Ombudsman: The process is relatively fast, often resolving within 30 to 90 days.
• Consumer Court: This can be a longer process, potentially taking several months to over a year, depending on the complexity of the case and the workload of the court.

However, the filing of a case itself often pressures the company to offer a fair settlement to avoid a negative judgment.

Advocate Sudhir Rao, Supreme Court of India