Kotak Mahindra Bank ordered to pay Rs 1.5 lakh over false credit card demand

The Delhi State Consumer Disputes Redressal Commission has directed Kotak Mahindra Bank to pay Rs 1.5 lakh in compensation for raising a demand of Rs 19,788 from a customer who had already repaid his entire credit card balance in full. The commission, presided over by Justice Sangita Dhingra Sehgal, set aside a District Commission order that had dismissed the complaint on technical grounds.

The complainant had purchased a Samsung television worth Rs 41,756.35 using his credit card and repaid the amount in 12 monthly instalments between June 2020 and May 2021. In August 2021, the bank raised a demand of Rs 19,788.03, showing it as outstanding dues. When the customer refused to pay, the bank sent threatening messages warning that his credit card would be blocked and his CIBIL score would be adversely affected.

The state commission found that the bank had at no point disclosed the basis for calculating the demand despite repeated requests. It held that raising an arbitrary demand without disclosing its basis, combined with threatening communications, amounted to deficiency in service and unfair trade practice under the Consumer Protection Act. The bank has been ordered to withdraw the demand entirely and pay Rs 1.5 lakh covering mental agony, harassment, and litigation costs.