6 Questions We Want Answered as Fintech Consumers

Digital wallets, UPI, cryptocurrency exchanges, online pay later services – there are now more varieties of financial services being provided digitally than ever before. As more of us move our day-to-day financial transactions into the digital space, we need greater awareness about what our rights as fintech consumers are.

We enlisted the help of Shehnaz Ahmed and Swarna Sengupta from the Fintech Team at the Vidhi Center for Legal Policy to help us answer six questions that fintech consumers should know the answers to.

1. What should I pay attention to when I agree to the T&Cs of a digital wallet like Paytm, GPay or Amazon Pay?
   1. If the wallet provider is licensed or authorised by RBI to provide the wallet services
   2. Charges and Fees
   3. Transaction limit
   4. Refund/Reversal Policy
   5. Data storage and usage policy
   6. Grievance Redressal Policy
   7. Dispute resolution mechanism
   8. Security/Authentication features of the wallet
   9. Liability of the wallet provider in case of unauthorised transaction

2. What can I do if there is an unauthorized electronic banking transaction from my account? Do I have any recourse?
   1. Always register for SMS and email alerts to receive alerts about transactions.

2. Immediately notify the bank (through their customer care channels) about the unauthorised transaction to register your complaint.

3. For “unauthorized transactions”, notify the bank (in case of prepaid payment instruments, like Phone, PayU etc, inform the issuer) within 3 working days of getting the alert about the unauthorised transaction. If you are within this time limit, your liability for that unauthorized transaction will be zero. After 3 days, the longer you take to notify, the higher the risk of loss to you.

4. Specifically for Unified Payments Interface, better known as UPI payments, if the bank rejects the complaint or does not resolve it, you should approach the National Payments Corporation of India (“NPCI”). You can file a complaint with the NPCI through their website.

5. If the bank or NPCI rejects the complaint or keeps it unresolved, you can also file a complaint with the RBI Ombudsman online, through RBI’s online Complaints Management System. You can also submit the complaint through electronic or physical mode to the Centralised Receipt and Processing Centre. The complaint, if submitted in physical form, should be duly signed by the complainant or by the authorised representative.¹

6. If you want to appeal against the award of the Ombudsman or your complaint has been rejected by the Ombudsman, you can refer an appeal to the appellate authority within 30 days of the award or rejection². You can file the appeal through the Complaint Management System.

7. You can also approach the Consumer Forum under the Consumer Protection Act against your bank for deficiency in services. However, you cannot approach the Ombudsman if you have the same complaint pending before the Consumer Forum, or any court, tribunal or arbitrator etc.((Ombudsman Integrated Scheme, 2021, available at- <https://rbidocs.rbi.org.in/rdocs/content/pdfs/RBIOS2021_121121.pdf >))

8. You can also initiate criminal proceedings, by lodging an FIR with the Cyber Crime branch of the police.

3. What are the biggest risks related to digital wallet based payments that I need to know?
   1. Regulatory status of the payment provider – You should know the regulatory status of your payment provider. Unless they have the right licenses and authorisations (such as a banking license for banks, authorisation for prepaid payment instruments etc.)  from the RBI, the RBI does not regulate them. So, you will not be able to approach the RBI with any complaints about them.
   2. Security risks and fraudulent transactions – You should be alert about different kinds of online frauds and scams relating to digital transactions. Scams such as phishing and vishing involve fraudsters luring customers to share their secure financial credentials under false and fraudulent pretexts, which are then used to make unauthorised transactions. Fraudsters also often trick you into downloading fake mobile apps or scan fake QR codes which helps them gain access to your digital wallet.
   3. Data theft – Your digital wallet app stores your financial and personal data and can be susceptible to data breaches. Hackers can sell your data to third parties for misuse and/or be used to make unauthorised transactions and can lead to identity theft as well.
   4. Technical glitches – Technical glitches such as system errors, network congestions, server problems, disruption of communications links and time-out sessions can lead to failed transactions or situations where money has been debited from your account but has not been credited to the beneficiary’s account.
4. I have been waiting for payment reversal on a failed transaction, but it is not coming through. What can I do?
   1. If the bank fails to reverse or delays the reversal of the amount debited from your account in case of a failed transaction beyond a certain timeline, which is fixed by the RBI, you can ask for compensation from the bank for each day’s delay.((Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems, September 20, 2021, available at <https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11693&Mode=0>))
   2. In case the delay continues and there is no reversal, you can file a complaint with the RBI Ombudsman for deficiency in services by the bank, through the RBI’s Complaint Management System. You can also submit the duly signed complaint through email or physical mode to the Centralised Receipt and Processing Centre.
   3. You can also approach the Consumer Forum under the Consumer Protection Act against your bank for deficiency in services. However, you cannot approach the Ombudsman if you have the same complaint pending before the Consumer Forum, or any court, tribunal or arbitrator etc.((Ombudsman Integrated Scheme, 2021, available at- <https://rbidocs.rbi.org.in/rdocs/content/pdfs/RBIOS2021_121121.pdf >))

5. I have issues with my digital payment provider and they are not responding. What can I do?
   1. Contact the customer care channels of the platform. Digital payment platforms are mandated to provide 24X7 access to a dedicated toll-free helpline for reporting unauthorised transactions.³

2. If it is still unresolved, you have options mentioned in points (b) to (h) in Question 2 above.

6. Can I file a complaint for UPI transactions? What is the grievance redressal mechanism? 

Yes, you can.

First, raise a complaint with the app service providers (for example- Amazon Pay, Google Pay etc.) If it is not resolved, escalate to the partner bank of the app, followed by your bank (where you maintain your account) and then NPCI. If these options do not work, you can approach the RBI Ombudsman. The complaint can be raised for both. fund transfer and merchant transactions.

1. Ombudsman Integrated Scheme, 2021, available at- <https://rbidocs.rbi.org.in/rdocs/content/pdfs/RBIOS2021_121121.pdf > [↩]
2. Ombudsman Integrated Scheme, 2021, available at- <https://rbidocs.rbi.org.in/rdocs/content/pdfs/RBIOS2021_121121.pdf> [↩]
3. Master Direction on Prepaid Payment Instruments , November 12, 2021, available <https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12156 > [↩]