Consumer Complaints Against Banks: Can a Bank Customer Approach the Consumer Commission?

Banks provide a wide range of financial services, including savings accounts, current accounts, loans, credit facilities, payment services and other banking products. Disputes may arise when a customer alleges unauthorised debits, incorrect charges, deficient service, delay or other irregularities.

A common question is whether a bank customer can approach a Consumer Commission against a bank.

Are Banking Services Covered by Consumer Law? The Consumer Protection Act, 2019 defines "service" broadly and includes services of different descriptions made available to potential users. The Act also recognises deficiency in service, including fault, imperfection, shortcoming or inadequacy in the quality, nature or manner of performance required under law or contract.

Accordingly, disputes concerning banking services can, depending upon the facts and statutory requirements, fall within consumer law.

Who Is a Consumer?

The important issue is whether the person approaching the Consumer Commission satisfies the statutory definition of a consumer.

The Consumer Protection Act excludes a person who obtains goods or avails services for a commercial purpose, subject to the statutory exception relating to goods used exclusively for earning livelihood by means of self-employment.

herefore, the purpose for which a banking facility was obtained can become important. For example, a dispute concerning a personal banking service may require a different analysis from a dispute concerning a substantial commercial credit facility obtained for business operations.

What Banking Disputes May Give Rise to a Complaint?

Depending upon the facts, disputes may concern

• Unauthorised debits;
• Incorrect bank charges;
• Excess interest or penal charges;
• Deficiency in banking service;
• Failure to provide agreed services;
• Improper handling of customer instructions;
• Certain disputes concerning loans or banking facilities; and
• Other acts or omissions alleged to constitute deficiency in service.
• The precise remedy depends upon the nature of the banking relationship and the facts of the dispute

What Should a Customer Do Before Filing a Complaint?

A customer should generally preserve:

• Bank statements;
• Loan or account documents;
• Sanction letters;
• Relevant correspondence;
• Emails and messages;
• Bank complaints and replies;
• Transaction records; and
• Documents showing the disputed charge or transaction.

The customer may also use the National Consumer Helpline, which functions as a pre-litigation grievance-redressal mechanism. The Department of Consumer Affairs states that complaints can be registered through its available channels and that a docket number is provided after registration.

Consumer Commission or Another Legal Remedy?

A banking dispute may potentially involve different legal forums depending upon the facts, including the Consumer Commission, civil court, statutory banking mechanisms, DRT or constitutional courts. The availability of one remedy does not automatically mean that every banking dispute is maintainable before every forum. Issues such as consumer status, commercial purpose, jurisdiction, limitation and the nature of relief sought require consideration before proceedings are instituted.