How to File a Complaint against Wrongful Transactions at Banks?

Bank customers across India often face issues like unauthorised debits, failed UPI transfers, or incorrect deductions. When these transactions go unresolved, trust in the banking system weakens. However, the Consumer Protection Act, 2019, empowers every individual to take legal action against such wrongful transactions. With digital tools like the Online Dispute Resolution (ODR) system and RBI’s official platforms, filing a complaint is now simple and efficient. This blog explains how to file a consumer complaint against wrongful transactions at banks.

Who Can File a Complaint Against Wrongful Transactions at Banks?

The persons who can file a consumer complaint against wrongful transactions at banks are listed below:

• Account Holder

A person who holds a savings or current account can file a complaint if the bank deducts money without a valid reason. This includes cases where the bank processes a wrong debit or fails to credit the correct amount. If the account holder notices a mistake, they must report it to the bank within the specified time.

• ATM or Card User

A customer who uses a debit or credit card can file a complaint if the transaction fails or the machine deducts money without dispensing cash. This also applies when the card is used without the user's knowledge. The person must report the issue as soon as they notice the error to avoid liability.

• UPI User

A person who uses UPI apps such as Google Pay, PhonePe, or Paytm can file a complaint if the money is sent to the wrong person, deducted without confirmation, or not refunded after a failed transaction. The user must keep a screenshot or transaction ID to support the complaint.

• Internet Banking User

A customer who uses net banking can file a complaint if the bank processes an incorrect transfer, fails to update the account balance, or adds extra charges. The person must submit proof such as bank statements or error messages when reporting the issue.

• Legal Guardian or Authorised Representative

If the affected account belongs to a minor, senior citizen, or disabled person, their legal guardian or authorised person can file the complaint. The representative must provide identity proof and authorisation documents when submitting the complaint.

Reasons to File a Complaint Against Wrongful Transactions at Banks

• The reasons to file a consumer complaint against wrongful transaction at banks are as follows:
  Unauthorised Debit

When the bank deducts money from the account without approval or knowledge of the customer, it becomes a serious concern. This includes frauds, hacked UPI transfers, or duplicate payments. The account holder must act quickly to prevent further loss.

• Failed ATM Withdrawal with Account Debit

Sometimes the ATM does not dispense cash, but the amount still gets deducted from the account. If the bank does not reverse the amount within the standard time, the customer has the right to raise a formal complaint.

• Wrong Account Transfer

If money gets transferred to a different account due to a system error or wrong internal processing, the affected person must file a complaint. This ensures correction and recovery of the lost amount.

• Delay in Refund After Failed Transaction

When a failed UPI or net banking transaction does not reflect a refund within the RBI-stipulated timeline, it creates financial stress. Filing a complaint helps ensure the bank follows the refund rules and clears the dues.

• Excess Charges or Hidden Fees

If the bank deducts charges not mentioned in the account terms, the customer can challenge it. This includes unexpected service charges, penalty deductions, or GST errors without prior notice.

• No Response to Complaint

If the bank fails to respond to a previously raised issue within 30 days, the customer has the legal right to escalate the complaint to higher authorities or the Banking Ombudsman.

How to File a Complaint Against Wrongful Transaction at Banks

The steps to file a complaint against wrongful transactions at banks are as follows:

Step 1: Collect All Relevant Documents

Start with your bank statement and identify the exact transaction that appears incorrect. Note the transaction ID, date, amount, and the nature of the error. Take screenshots from your mobile banking app or net banking portal if needed. If you already contacted the bank earlier, collect emails, SMS alerts, and the previous complaint reference number. These records help you present a strong and clear case.

Step 2: Visit Your Bank’s Official Website or App

Go to the official website of your bank or open the mobile banking app. Locate the “Customer Care,” “Dispute Resolution,” or “Grievance Redressal” section. Every bank provides a secure portal for filing complaints. Do not use third-party sites. Use only the official platform to make sure your details reach the authorised team.

Step 3: Submit the Complaint Form

Open the complaint form on the bank’s website or app. Fill in your personal details such as name, mobile number, and account number. Enter the transaction date, amount, reference number, and describe the issue in clear words. Mention if the transaction was unauthorised, failed, or incorrectly processed. Attach supporting documents like bank statement, screenshot, or SMS proof. Double-check all inputs before you submit the form. After submission, you receive a complaint ID—note it down for future use.

Step 4: Call Customer Support if Needed

If the online form does not work or you do not receive confirmation, call your bank’s customer care number. Share your account details and transaction error. Request a complaint registration or ticket number during the call. Ask the support team to confirm your complaint through SMS or email. This provides official proof that the complaint has been registered.

Step 5: Follow Up Until You Get a Response

Your bank must resolve your complaint within 30 days as per RBI rules. If you do not receive any update, contact the bank again using the complaint ID. Use email, phone, or visit the nearest branch. Maintain a log of your communication—record the names of officers, date of response, and the solution offered. If the bank fails to provide a resolution, you can escalate the issue to the RBI’s Complaint Management System.

Steps to File a Consumer Complaint Against Wrongful Transactions at Banks

When a bank fails to resolve a disputed transaction—such as an unauthorised debit, failed UPI refund, or double deduction—you have the legal right to escalate the issue. The Consumer Protection Act, 2019, empowers every individual to seek redressal through a time-bound, structured process. The steps below explain how to file a complaint in a formal and effective manner.

Step 1: Draft a Formal Written Complaint

Start with a clearly written complaint addressed to the relevant Consumer Commission. Include your full name, residential address, contact number, and email ID. Specify your bank’s name, branch, account number, and complete details of the transaction—such as date, amount, and reference ID.

Describe the issue precisely—whether it involves an unauthorised withdrawal, a failed reversal, or a wrongful charge. Attach a timeline of events and mention your communication with the bank, including complaint numbers, official names, and responses received. Clearly state the resolution you expect—refund, reversal, or compensation. Use formal and factual language without personal remarks.

Step 2: Collect and Organise Supporting Documents

Support your complaint with strong and relevant evidence. Keep all documents arranged in logical order and prepare scanned copies for online filing. Important documents include:

• Bank Statement: Displays the disputed transaction
• Transaction Receipt or UPI Reference: Validates the transfer
• Email or SMS Record: Shows communication with the bank
• Complaint ID or Acknowledgement Slip: Confirms your previous attempt to resolve the issue
• Screenshot or Proof of Error: Highlights failed or incorrect deductions
• Identity Proof: Confirms your ownership of the account
• Legal Notice Copy (if sent): Proves a formal demand was made

Ensure each document directly relates to the complaint. Avoid attaching irrelevant files.

Step 3: Issue a Legal Notice to the Bank

Prepare a legal notice addressed to your bank’s registered office. Mention your name, account number, transaction details, and a summary of the issue. Refer to the complaint history and explain the steps already taken.

Clearly demand the action you seek—refund, correction, or formal explanation. Fix a deadline of 15 to 30 days for the bank to respond. This notice creates a formal record that you offered the institution a final opportunity before initiating legal proceedings. Retain a signed copy and postal proof.

Step 4: Approach the Appropriate Consumer Forum

If the bank fails to act within the set timeframe, you may escalate the matter before the relevant Consumer Disputes Redressal Commission. The Consumer Protection Act defines three levels of forums based on the total claim value, including product cost, financial loss, and compensation:

District Commission Dispute Resolution Commission(DCDRC): Accepts claims up to ?1 crore

State Commission Dispute Resolution Commission (SCDRC): Handles claims above ?1 crore up to ?10 crore

National Commission Dispute Resolution Commission (NCDRC): Deals with claims above ?10 crore

Step 5: Attend the Hearing and Present Your Case

After accepting the complaint, the forum issues a notice to the bank and schedules a hearing. You must appear in person or through an authorised representative. Carry all original documents to the hearing.

Present your case clearly. Walk the forum through the facts, the error caused, and the remedy sought. Refer to your documentation and respond to any questions. After hearing both parties, the commission passes a binding order.

If the bank does not comply with the order, file for execution before the same forum. The law allows legal enforcement through official channels.

Consumers who seek a quick and streamlined complaint process can choose the Online Dispute Resolution (ODR) platform. This system allows you to submit your complaint, attach supporting documents, and track the case digitally—without visiting a physical forum. The resolution process takes place entirely online and results in a legally enforceable decision.

Why Consumers Prefer Online Dispute Resolution (ODR) Over Traditional Legal Forums

The Online Dispute Resolution (ODR) platform offers a faster and simpler route for consumers to resolve complaints, especially those involving banking transactions. More people now choose ODR over traditional legal proceedings for the following key reasons:

• No Physical Appearance Required

ODR removes the need to visit any consumer court or commission office. Every step—from filing the complaint to receiving the outcome—takes place on an official digital platform. This helps individuals who live in remote areas, have health issues, or cannot take leave from work. The platform ensures access to justice without the stress of travel or long waiting periods.

• Faster Dispute Resolution

ODR follows a structured and time-bound model. It avoids delays, frequent adjournments, and backlogs common in regular forums. Most complaints are addressed within a few weeks, depending on the case type. This speed appeals to consumers who need quick redressal without complex formalities.

• Minimal Costs Involved

ODR reduces the financial burden on consumers. There is no need to pay for travel, physical filings, or lawyer consultations. Platform charges, if any, remain nominal. This makes ODR ideal for low-value claims where traditional legal action may cost more than the compensation expected.

• Simple and Guided Process

The ODR interface includes clear complaint forms and step-by-step instructions. Consumers can submit basic information, upload documents, and track progress without legal help. This benefits those unfamiliar with legal terms or procedures and ensures that the process remains accessible to all.

• Legally Valid Outcome

The final decision issued through the ODR platform holds legal authority. It is enforceable under Indian consumer laws and carries the same status as an order passed through a consumer forum. If the other party refuses to comply, the consumer may approach the concerned commission for execution without starting a fresh case.

• Data Privacy and Confidentiality

ODR platforms operate on secure digital systems. Personal details, complaint documents, and case history stay protected throughout the process. Only the authorised parties have access. Consumers also receive case updates through email or SMS, which keeps them informed and reduces third-party involvement.

Understanding Online Dispute Resolution (ODR)

Online Dispute Resolution (ODR) is a digital mechanism that allows individuals and businesses to resolve disputes without visiting a consumer forum or court. The process takes place through secure platforms that use official websites, email communication, and video conferencing tools.

ODR handles a wide range of issues, including consumer grievances, banking disputes, service failures, and contract-related claims. The system ensures accessibility, saves time, and avoids the need for physical presence.

ODR functions under the broader legal concept of Alternative Dispute Resolution (ADR). It follows three recognised formats:

• Mediation

Mediation is a voluntary process that focuses on mutual agreement. A neutral mediator facilitates the discussion between both parties. The mediator listens to each side, identifies the key issues, and helps the parties arrive at a fair resolution.

The mediator does not give a verdict or impose a decision. The final outcome depends entirely on the parties' willingness to settle. Mediation maintains privacy, reduces conflict, and encourages cooperation. It suits cases where both sides are open to compromise.

• Negotiation

Negotiation allows the parties to resolve the dispute through direct dialogue. They may choose to negotiate on their own or involve a neutral facilitator. Each party states its position, reviews the situation, and explores possible solutions.

No external person decides the outcome. The result depends on mutual understanding and acceptance. This method offers control, speed, and flexibility. It works well for disputes where both parties want to avoid formal escalation.

• Arbitration

Arbitration is a formal process where a neutral arbitrator reviews the case and issues a binding decision. The arbitrator may be a legal expert, a retired judge, or a subject-matter specialist.

After hearing both sides and examining the evidence, the arbitrator issues a final decision, known as an arbitral award. This award has legal enforceability under the Arbitration and Conciliation Act, 1996, and holds the same status as a civil court judgment.

As of early 2024, Online Dispute Resolution (ODR) platforms in India have resolved over 500,000 cases, demonstrating strong system performance and growing consumer trust. This milestone confirms that ODR has emerged as a reliable, efficient, and legally enforceable alternative to traditional consumer forums.

Legal Acceptance of Online Dispute Resolution (ODR)

ODR holds full legal recognition under Indian law. The Consumer Protection Act, 2019 supports the use of digital mechanisms to resolve consumer disputes. In parallel, the Arbitration and Conciliation Act, 1996 provides a statutory basis for arbitration, mediation, and other structured resolution methods—whether conducted in person or online.

Decisions issued through ODR platforms carry the same legal weight as orders passed through consumer commissions. These outcomes are binding and enforceable. If the opposite party fails to comply, the aggrieved consumer has the right to file for execution through the appropriate legal forum.

ODR aligns with the judiciary’s broader objective of promoting accessible and time-bound redressal. It reflects India's shift toward efficient, technology-driven justice delivery, especially in areas involving digital payments, service lapses, and financial disputes.

How to File a  Complaint Through ODR Against Wrongful Transactions at Banks

When a seller, bank, or service provider fails to resolve a genuine grievance, consumers can seek legal redress through Online Dispute Resolution (ODR). This process offers a digital alternative to traditional forums and ensures a valid and enforceable outcome. Follow the steps below to file your complaint correctly through the ODR mechanism.

Step 1: Collect Supporting Evidence

Begin the process by collecting all documents related to the disputed transaction. This includes the purchase invoice, bank payment receipt, warranty card, and any repair or service history. If the issue involves a defective product, take clear photographs to support your claim. Save all written communications—such as emails, chat transcripts, and call summaries. These records establish a complete account of your complaint and prove that you attempted to resolve the matter before seeking legal intervention.

Step 2: File the Complaint on an Authorised ODR Platform

Access a recognised ODR platform and navigate to the complaint submission form. Enter your full name, mobile number, email ID, and postal address. Provide the details of the product or service, the transaction date, the payment amount, and the nature of the grievance. Clearly explain the issue without exaggeration. Upload all relevant documents and verify the information before final submission. Ensure accuracy at this stage to avoid unnecessary delays.

Step 3: Participate in the Mediation Process

Once the complaint is filed, the platform assigns a neutral mediator. The mediator connects with both parties through a secure digital link. During this stage, you explain your side of the dispute and present your documents. The mediator listens, examines the facts, and suggests a resolution acceptable to both sides. Mediation ends when both parties agree to settle. If there is no mutual agreement, the case does not conclude at this stage.

Step 4: Move to Arbitration When Mediation Fails

If mediation does not lead to a solution, the matter can proceed to arbitration. This stage requires your written consent, submission of the mediation record, and a formal arbitration request. Arbitration applies to cases that need a binding and legally enforceable resolution. It follows the provisions of the Arbitration and Conciliation Act, 1996, which governs the conduct and validity of the entire process.

Step 5: Attend the Digital Arbitration Hearing

The arbitrator schedules a digital hearing and sends you a formal notice with access details. On the scheduled date, attend the session through the secure platform. Present your evidence, explain the facts clearly, and respond to the arbitrator’s questions. This stage ensures that both sides receive a fair and structured opportunity to present their case.

Step 6: Obtain the Final Arbitral Award

After examining the facts and evidence, the arbitrator issues a final decision known as the arbitral award. This decision carries the same legal weight as a civil court judgment. If the seller or service provider is at fault, the award may direct a refund, compensation, product replacement, or service correction. The case concludes at this stage, and the order becomes binding on both parties.

Conclusion

To sum up, wrongful transactions—such as unauthorised debits, failed UPI refunds, or excess charges—require prompt legal action. The Consumer Protection Act, 2019, allows every bank customer to file a formal complaint and seek redressal through offline or online channels. Digital platforms like ODR offer a fast, cost-effective, and legally valid solution without court visits or delays.

For complete support in filing your complaint, gathering documents, or navigating the ODR system, Online Legal India provides expert guidance. Their legal team ensures quick resolution, accurate filings, and full compliance, protecting your rights at every step of the process.