How to protect yourself from unsolicited cards, fraudulent transactions

If you receive an unsolicited credit card, raise an objection and communicate with the bank in writing; escalate if you do not receive a positive response within 30 days

A recent case before the Delhi High Court has put the spotlight on how vulnerable consumers are to unauthorised credit card transactions and poor grievance redressal by banks. After a New Delhi-based lawyer was harassed for refusing to pay charges on a credit card he never activated — and for fraudulent transactions he never made — the court stepped in with strong directions to protect customers, tighten bank accountability, and push the Reserve Bank of India (RBI) to overhaul its complaint-handling system. The case serves as a wake-up call for all credit-card holders.

 

How to cancel an unsolicited credit card?

 

According to legal experts, when an unsolicited credit card arrives, the customer must treat it as an uninvited financial risk. The RBI’s Credit Card and Debit Card Issuance Directions, 2022, prohibit such cards, and banks must cancel them immediately once the customer objects.

 

“The safest step is to send a written protest — email or letter — to the bank’s nodal officer and customer care the same day, clearly mentioning the card’s last four digits and demanding cancellation. Written communication is essential, as phone calls carry little weight. Until the bank cancels it in its system, the card can still be misused even if never activated, so quick written objection protects the customer from future liability,” says Vishal Gehrana, partner designate, Karanjawala & Co.

 

Proof to confirm a credit card is truly cancelled

 

Customers should insist on written confirmation from the bank stating that the credit card account has been closed, which the issuer must provide within seven working days. “They should also check their credit report (CIBIL/other bureaus) to ensure the card reflects a ‘closed’ status, confirming no active credit line remains in their name,” says Rahul Sundaram, partner, IndiaLaw LLP.

 

Handling a bill for a fraudulent card charge

 

Customers should immediately report the unauthorised transaction in writing - again, both email or letter are acceptable — and file a formal complaint. “Under RBI rules on unauthorised electronic transactions, prompt reporting protects the customer and bars the bank from levying interest, late fees, or taking recovery action while the dispute is pending,” says Gehrana.

 

“They should demand reversal of the charge and escalate it to the bank’s grievance cell, if needed. If the bank fails to act, the customer can approach the RBI Ombudsman under the Integrated Ombudsman Scheme,” adds Sundaram.

 

Delay can be treated as implied acceptance, whereas quick written objection forces the bank to review its authentication logs and strengthens the customer’s position.

 

How to prove the transaction is unauthorised?

 

Proof lies in the bank’s transaction data, which it must maintain under the Payment and Settlement Systems Act, 2007, and the RBI’s KYC and digital payments instructions. If the card was never activated, the bank must explain how the charge occurred. “For active cards, customers can request OTP logs, device IDs, IP addresses, merchant records, and any internal fraud-control flags. Misalignment with the customer’s usage shifts the burden to the bank, which must justify how the transaction passed its own security checks,” says Gehrana.

 

Steps to contest a fraudulent card charge

 

Three steps are important to contest a fraudulent card charge. Dispute the transaction in writing without delay, so the RBI framework on customer liability is triggered.

 

“File a complaint with the bank’s grievance officer and escalate to the RBI Ombudsman if unresolved, ensuring forms and supporting documents are complete,” says Gehrana.

 

Document and report any intimidation by recovery agents to the bank and regulator, as RBI prohibits such conduct. Following these steps shifts the burden to the bank to prove the customer’s fault, which, if unproven, means no liability.

 

If bank ignores your complaint

 

If the bank fails to resolve a complaint within 30 days or responds unsatisfactorily, the customer can escalate it to the RBI under the Integrated Ombudsman Scheme. “This free, online forum handles grievances against banks and financial institutions, requires no lawyer, and is legally recognised as the proper next step when banks fail to act,” says Shankey Agrawal, partner, BMR Legal.

 

How to file a complaint with RBI Ombudsman?

 

Complaints to the RBI can be filed online, by email, or by post, but only after the bank has failed to respond within 30 days or rejected the grievance. The form requires account details, grievance description, bank correspondence, and supporting documents. “All mandatory fields must be filled accurately. Once submitted, a reference number is issued and the case is assigned to an RBI Ombudsman. The process is user-friendly and does not require a lawyer,” informs Agrawal.

 

Handling rejection by the RBI Ombudsman

 

The Delhi High Court has recently clarified that RBI complaints cannot be rejected on the basis of minor technical errors. “If rejected, the customer should promptly correct and refile the complaint and submit a written representation challenging the rejection,” says Agrawal.

 

“The Delhi HC has ruled that banks cannot charge interest, late fees, or penalties while disputes are pending. If the Ombudsman rejects the complaint on technical grounds, the customer can seek a review, approach the Consumer Commission, or pursue civil or criminal action in fraud cases,” says Siddartha Karnani, partner, King Stubb & Kasiva, Advocates and Attorneys.

 

The Court has mandated that the RBI must allow defect correction and human review. “If the complaint is still unfairly dismissed, the customer can approach the High Court through a writ petition as courts have now made it clear that technological gaps cannot defeat substantive justice,” adds Agrawal.   

Steps to minimise fraud risk

 

Register for transaction alerts, monitor statements, and freeze cards at the first sign of fraud

Never share OTP, CVV, PIN, or password

Do not accept intimidation by collection agents; report any harassment

Don’t pay disputed amounts under pressure

Act promptly, escalate if there is a delay in reponse