Archive · 13 Aug 2026
Kerala commission orders Federal Bank to refund Rs 9,854 loss
A man in Kerala was looking at social media one day when a scratch card appeared on his screen.
The card looked like it came from a money app called PhonePe and promised a special prize called 'unlimited cash back.'
When he scratched the card, money was taken from his bank account — Rs 4,885 and Rs 4,969.
He told his bank, Federal Bank, right away, and the bank gave the money back.
But a few weeks later, the bank took the money back again.
The man asked a special court that protects consumers to look at his problem.
The court said the bank must return the money, Rs 9,854, and also pay him compensation and legal costs.
The bank said only the man could have used his secret PIN, but the court said the bank did not prove he did anything wrong.
The court said that when a bank cannot show a customer was careless, the bank must cover the loss.
A Kerala consumer commission directed Federal Bank to recredit Rs 9,854 lost by a customer in two unauthorised UPI transactions.
The commission also ordered the bank to pay Rs 5,000 in compensation and Rs 3,000 as the cost of proceedings.
The customer said a fake PhonePe-branded scratch card promising 'unlimited cash back' appeared while he browsed social media on July 13, 2021.
Rs 4,885 and Rs 4,969 were debited; the bank initially returned the money on July 15, 2021, but reversed the credit on August 4, 2021.
The commission held that the bank failed to prove customer negligence, and cited the RBI circular requiring the bank to recredit the amount.
- Who
- A Kerala consumer commission led by President P V Jayarajan, with members Preetha G Nair and Viju V R, ruled in favor of a Federal Bank customer.
- What
- The commission directed Federal Bank to recredit Rs 9,854 lost in two fraudulent UPI transactions and to pay Rs 8,000 in compensation and costs.
- When
- The fraudulent transactions occurred on July 13, 2021; the credit was reversed on August 4, 2021; the order was read on August 5.
- Where
- Kerala, India.
- Why
- The bank failed to provide credible material establishing customer negligence, so under the RBI circular it is bound to recredit the amount.
Consumer commission and customer
Federal Bank
Liability for unauthorised UPI transactions
Consumer commission and customer
The customer reported the fraud immediately and took all necessary steps; the commission said the bank produced no reliable material showing he was negligent or involved, so the bank must bear the loss.
Federal Bank
The bank argued it has no role in the scratch card, that either the complainant or someone he shared his UPI credentials with made the transactions, and that UPI PINs are known only to the account holder, making the customer liable.
Burden of proof in fraud disputes
Consumer commission and customer
The commission said a bank cannot shift the loss based on 'perceived negligence' without credible evidence, and that the RBI circular binds the bank to recredit the amount.
Federal Bank
The bank said its detailed enquiry found the transactions were done with credentials privy to the complainant and appear to have been done with the customer's consent, noting he was initiating UPI debits almost every day.
- Bank
- Federal Bank
- Amount to be recredited
- Rs 9,854
- Compensation
- Rs 5,000
- Cost of proceedings
- Rs 3,000
- Fraudulent transactions
- Rs 4,885 and Rs 4,969 on July 13, 2021
- Initial credit
- July 15, 2021
- Credit reversal
- August 4, 2021
- Compliance deadline
- Within 30 days of the August 5 order