How to file a complaint for fraudulent EMI charges applied online?

In today’s digital world, many e-commerce platforms offer EMI (Equated Monthly Installment) options for online purchases. While this service makes large-ticket items more affordable, it also opens up the possibility of fraud if unauthorized EMI charges are applied to a consumer's account. Consumers may face fraudulent EMI charges if a payment gateway fails, if an account is hacked, or if merchants apply EMIs without proper consent. In such cases, consumers need to act quickly to file a complaint and dispute the charges.

Steps to File a Complaint for Fraudulent EMI Charges Applied Online

• Verify the EMI Charges
  
  • Check the charges: Review your bank statements, credit card bills, or e-wallet transactions to confirm if any EMI charges have been applied for an online purchase.
  • Cross-check purchase details: Ensure that the EMI option was selected at the time of purchase. If you did not opt for EMI, or if the terms were unclear, it could be an error or fraud.
• Contact the Merchant
  
  • Reach out to customer support: Contact the merchant's customer service immediately and explain that you noticed fraudulent EMI charges on your account. Provide details like the order number, transaction ID, and purchase amount.
  • Request resolution: Ask them to clarify whether EMI options were applied with your consent, and request a refund or correction of the EMI charges if they were applied incorrectly or fraudulently.
• Check for Unauthorized Subscription or Recurring Payment
  
  • Sometimes, unauthorized EMIs are due to an auto-renewal or subscription service that was inadvertently activated. Check if you unknowingly signed up for an EMI plan with the merchant or service provider.
  • If this is the case, you can request the merchant to cancel the subscription and refund any unauthorized EMI amounts.
• Dispute the Charges with Your Bank or Credit Card Issuer
  
  • Contact your bank: If you used a credit card or debit card for the purchase, contact your bank’s customer service or the credit card issuer immediately.
  • Report fraudulent charges: Inform them of the unauthorized EMI charges. Banks and credit card providers usually have a dispute resolution process for such cases.
  • Request a chargeback: If the charges were fraudulently applied, ask the bank to initiate a chargeback. This process involves the bank investigating the transaction and reversing the payment if found to be unauthorized.
  • Provide supporting documents: Submit any necessary evidence such as the transaction ID, email communication, and purchase details to support your claim.
• Raise a Complaint with the Payment Gateway Provider
  
  • If you believe the fraud occurred due to a payment gateway issue (such as Razorpay, PayU, etc.), contact the gateway provider. They may have a fraud investigation team to look into the issue and potentially reverse the charges.
  • Some payment gateways provide tools for consumers to dispute transactions directly through their apps or websites.
• Report the Fraud to Consumer Protection Authorities
  
  • File a complaint with NCH: In India, you can file a complaint with the National Consumer Helpline (NCH) under the Consumer Protection Act, 2019. This will help you escalate the issue to authorities if the merchant or financial institution is uncooperative.
  • File with RBI: If the fraudulent charges are linked to UPI or other banking systems, you can also report the issue to the Reserve Bank of India (RBI) through their RBI grievance redressal system.
  • Use consumer protection agencies: In other countries, you can file complaints with agencies like the Federal Trade Commission (FTC) or European Consumer Centre (ECC) for dispute resolution.
  Consumer protection agencies can investigate the matter and guide you on the next steps, including legal action or intervention to resolve the dispute.
• Monitor for Further Fraudulent Charges
  
  • Check your statements regularly: Keep monitoring your bank statements and credit card bills to ensure no further fraudulent EMI charges are applied.
  • Block the merchant: If you suspect ongoing fraudulent activities, request your bank to block transactions from that merchant or freeze your account temporarily.
  • Enable transaction alerts: Set up SMS or email alerts for every transaction to quickly spot any unauthorized charges.
• Seek Legal Recourse if Necessary
  
  • Consult a lawyer: If the matter is not resolved satisfactorily and the amount is significant, seek advice from a consumer rights lawyer to understand your options for legal action.
  • File a small claims case: In some jurisdictions, you can file a small claims case against the merchant or payment provider to recover the money and seek compensation.

Common Causes of Fraudulent EMI Charges

• Payment Gateway Errors: Sometimes, a payment gateway may automatically convert a standard payment into an EMI option due to technical issues, leading to unauthorized EMI deductions.
• Merchant Billing Errors: Merchants may have faulty billing systems that mistakenly apply EMI options to transactions, especially if the user did not explicitly select this option.
• Fraudulent Transactions: If your account was compromised, fraudsters may have made purchases on your behalf, and in some cases, applied EMI plans to the fraudulent transactions.
• Subscription Traps: Some websites or services may secretly enroll users in recurring EMI-based subscriptions, where the consumer unknowingly agrees to pay in installments.

Example

A consumer purchases a laptop online for ₹60,000 using a credit card. Upon receiving the bill, they notice that the amount has been divided into EMI payments for 6 months, which they did not authorize.

Steps the consumer should take:

• Check the Purchase Details: The consumer reviews the order confirmation and realizes they had selected full payment, not an EMI option.
• Contact the Merchant: They immediately reach out to the merchant’s customer service, explaining the issue and requesting a refund of the EMI charges.
• File a Complaint with the Bank: The consumer contacts their credit card issuer, reports the unauthorized EMI charge, and requests a chargeback.
• Escalate to Consumer Protection: The issue is not resolved, so the consumer files a complaint with the National Consumer Helpline (NCH) and also contacts the RBI.
• Resolution: The merchant confirms the error and agrees to cancel the EMI plan, and the credit card issuer reverses the charges after a successful dispute resolution process.

Consumer Safety Tips

• Always double-check payment options: Before confirming a purchase, ensure that the payment method selected is correct, and confirm whether you are opting for EMI or full payment.
• Review transaction details: Always carefully review your transaction history, especially after large purchases, to spot any unauthorized charges.
• Enable alerts: Set up transaction alerts for immediate notification of any EMI or recurring charges on your credit card or bank account.
• Use secure payment methods: Stick to trusted merchants and payment methods that offer buyer protection and fraud detection.