Failure To Deactivate Account Despite Multiple Unauthorized Transactions, Bangalore District Commission Holds Myntra Liable

Brief Facts:

Ms. Roopini Nagaraj (“Complainant”), an employee of Mercedes Benz in Bangalore, stated that Mercedes Benz had an arrangement to issue gift coupons to its employees, allowing them to redeem amounts via the Myntra App for online shopping. Mercedes Benz extended this facility to the Complainant, crediting her account with Rs. 52,000/-. In 2022, the Complainant made online purchases totalling Rs. 3,668/-, leaving a credit balance of Rs. 48,332/- in her account. The Complainant received a call from Myntra for the return of one of its products. Upon checking her account, the Complainant found that there were unauthorized return orders. The Complainant reported the issue to Myntra, which requested OTP for cancellation. Subsequently, the Complainant wasn't able to access her account and noticed unauthorized transactions with only Rs. 2,843/- left in her credit balance. Despite repeated requests, Myntra did not block the account. The Complainant made several communications with Myntra but didn't receive a satisfactory response. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Bangalore (“District Commission”) and filed a consumer complaint against Myntra.

In response, Myntra argued that it had no involvement in the fraudulent transactions. It argued that Myntra is an independent e-commerce platform, and it cannot be held responsible for the alleged fraud. It argued that it deactivated the Complainant's account and halted delivery of disputed transactions upon receiving the complaint. Therefore, it prayed for the dismissal of the complaint.

Observations by the District Commission:

The District Commission held that Myntra did not take the necessary action to block the account despite the Complainant's complaints about transactions. It noted that there were several transactions which were made without the Complainant's consent. Despite her continuous complaints, the District Commission noted that Myntra's response was delayed, with account deactivation and delivery stoppage initiated only after two months, by which time the entire amount had been utilized by wrongdoers.

The District Commission held that Myntra's offering of gift coupons while failing to safeguard the Complainant's account constituted both deficiency of service and unfair trade practices. Consequently, the District Commission directed Myntra to refund Rs. 45,489/- with 8% interest to the Complainant. It was also directed to pay a compensation of Rs. 8,000/- for mental agony suffered by the Complainant along with Rs. 5,000/- for the litigation costs incurred by her. Additionally, Myntra was directed to deposit Rs. 25,000/- in the Consumer Welfare Fund as punitive damages.