India
Chandigarh Commission Orders Two Lenders to Clear Credit Record and Pay Rs 35,000 After Unauthorised Rs 30,000 Loan Claim
In a decision dated 27 October 2026, the District Consumer Disputes Redressal Commission‑I in Chandigarh held CapFloat Financial Services (operating as Axio) and Karur Vysya Bank responsible for harassing Daljeet Singh of Manimajra, who said he never took a Rs 30,000 loan. The commission directed the two lenders to confirm that Singh owes nothing, correct his credit record, and pay him Rs 25,000 in compensation and Rs 10,000 for litigation costs.
Singh received a February 2024 text demanding repayment of Rs 12,316 for a loan he claimed he never applied for. CapFloat told him a credit facility of Rs 30,000 had been provided through Amazon Pay Later. Despite repeated requests, the company continued to demand repayment via calls and threatening messages. Singh filed a police complaint on 10 February 2024 and later received a summons from a Ludhiana court for recovery of Rs 22,569. A legal notice dated 20 April 2025 demanded Rs 32,694 as dues outstanding as of 31 March 2025.
CapFloat’s email on 7 May 2025 explained that the facility was a virtual line of credit, with 20 % funded by Amazon Pay Later and 80 % by Karur Vysya Bank, and that no amount was disbursed into any bank account. Singh alleged that the unauthorised loan and its adverse reporting in his CIBIL report harmed his creditworthiness and caused another bank to refuse him a loan.
CapFloat said it had identified the matter as an account‑takeover case involving an unauthorised transaction on Amazon’s platform. After confirmation from Amazon, it waived the entire facility on 18 June 2025 without admitting liability, and informed credit bureaus and the co‑lender of the clearance. The commission did not verify whether the updates appeared in Singh’s credit profile.
Karur Vysya Bank described the facility as a co‑lending arrangement, with the bank bearing 80 % of the lending share and CapFloat 20 %, and relied on CapFloat’s submission that the transaction was unauthorised and the loan waived.
The commission noted that the corrective steps were taken only after Singh had faced recovery demands and legal proceedings, and that the waiver does not absolve the lenders of responsibility for the inconvenience, harassment and adverse consequences suffered by Singh.
The final order requires CapFloat and Karur Vysya Bank, jointly and severally, to: 1. Issue a certificate confirming zero outstanding liability on the disputed loan account. 2. Rectify incorrect and adverse entries relating to the account with credit bureaus and co‑lenders. 3. Pay Rs 25,000 as compensation for mental agony and harassment. 4. 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 accrue simple interest at 9 % per annum from the date of the order until paid.
The complaint against Amazon Pay India was dismissed.