NEW DELHI: A consumer commission in Chandigarh has held two lenders responsible for the harassment of a man who was pursued for a Rs 30,000 loan he says he never took. The loan was later found to be unauthorised. The commission directed CapFloat Financial Services, which operates under the brand name Axio, and Karur Vysya Bank to confirm he owes nothing, correct his credit record, and pay him Rs 25,000 as compensation and Rs 10,000 as litigation costs.In its order dated October 27, 2026, the District Consumer Disputes Redressal Commission-I, Chandigarh, held that the conduct of the two companies amounted to “gross deficiency in service and unfair trade practice.” It dismissed the complaint against Amazon Pay India.
How the dispute arose
According to the order, the complainant, Daljeet Singh, a resident of Manimajra, received a text message in February 2024 demanding repayment of Rs 12,316 against a loan account. He said he had never applied for or availed of any such loan.When he enquired, CapFloat officials told him a credit facility of Rs 30,000 had been provided through Amazon Pay Later. He alleged that, despite his repeated requests and assurances, the company kept demanding repayment through recovery calls and threatening messages. He filed a police complaint on February 10, 2024.He later received summons from a Ludhiana court in recovery proceedings initiated by CapFloat for Rs 22,569. A legal notice dated April 20, 2025, then demanded Rs 32,694 as dues outstanding as of March 31, 2025.On April 27, 2025, he wrote to the company seeking documents on the loan application, sanction, disbursement and beneficiary account. In an email dated May 7, 2025, CapFloat said he had registered for Amazon Pay Later on January 14, 2024, and that 20 percent of the facility was funded by it and 80 percent by Karur Vysya Bank. It described the facility as a virtual line of credit, with no amount disbursed into any bank account.Singh alleged that the unauthorised loan and its adverse reporting in his CIBIL report hurt his creditworthiness and led another bank to refuse him a loan. The order does not record a finding on that last claim.
What the companies said
CapFloat told the commission that its investigation identified the matter as an account takeover case involving an unauthorised transaction on Amazon’s platform. After confirmation from Amazon, it said, it waived the entire facility on June 18, 2025, without admitting liability.It also said it informed the credit bureaus and the co-lender about clearing the historical overdue entries and closing the account, and that the changes were expected to show in his credit profile within 30 to 45 working days. The order does not verify whether the updates took place.CapFloat and Karur Vysya Bank further said Singh declined to provide copies of his Aadhaar and PAN for internal verification, citing legal advice, even though the registered mobile number was linked to him in the company’s records. The commission did not rely on this point in its findings.Amazon Pay India said it could not trace any such loan using the mobile number provided and had no Amazon Pay Later account registered against it. It said it was only a facilitator and that CapFloat was responsible for clarifying the discrepancy.Karur Vysya Bank said the facility was offered under a co-lending arrangement with CapFloat, with the bank bearing 80 percent of the lending share and CapFloat 20 percent, and that CapFloat managed the accounting. It relied on CapFloat’s submission that the transaction had been found unauthorised and the loan waived.
What the commission found
The bench of president Pawanjit Singh and member Suresh Kumar Sardana noted that CapFloat, with Karur Vysya Bank relying on its submission, accepted that the transaction was an account takeover and that the complainant was not liable for the loan.The commission observed that these corrective steps came only after Singh had faced recovery demands and legal proceedings, and was at risk of damage to his creditworthiness. It noted that he had also approached the police and had to pursue the matter repeatedly to establish that he had not authorised the loan.“It is also observed that through things have been corrected & set in order by the OPs No.1 & 2 [sic; the order appears to mean OP Nos. 1 and 3], but these steps were taken only after the complainant had faced recovery demands, legal proceedings and the risk of damage to his creditworthiness,” the commission said.It added that the subsequent waiver “does not absolve” the opposite parties of responsibility for the “inconvenience, harassment and adverse consequences” suffered by the complainant due to the unauthorised transaction and its reporting to credit bureaus.
Final order
CapFloat and Karur Vysya Bank, jointly and severally, must:
- Issue a certificate confirming zero outstanding liability on the disputed loan account.
- Rectify incorrect and adverse entries relating to the account with the credit bureaus and co-lenders.
- Pay Rs 25,000 as compensation for mental agony and harassment.
- Pay Rs 10,000 as litigation costs.
They must comply within 45 days of receiving a certified copy of the order. If the compensation is not paid within that period, the Rs 25,000 will carry simple interest at 9 percent per annum from the date of the order until it is paid.The complaint against Amazon Pay India was dismissed.
