Of late, many customers of the fledgling EV cab startup BluSmart are taking to social media, posting pictures of their BluSmart wallet. Apart from not being able to book rides, they are also complaining of not being able to withdraw their money stuck in the wallet, despite constantly reaching out to customer support. This comes shortly after the market watchdog SEBI barred the company’s promoters from participating in the stock market on account of committing fraud and diverting company funds for personal use.
With news of BluSmart ceasing operations soon and potentially becoming a fleet partner for Uber, users are wondering what will happen to their BluSmart wallet funds if they are unable to withdraw or utilise them. Attempts to reach out to BluSmart regarding this matter went unanswered. However, multiple reports confirmed that BluSmart has temporarily suspended its services and stating that refund processing will be initiated soon.
At present, the terms and conditions of the BluSmart app explicitly state that “The money held in the BluSmart wallet is strictly non-refundable and holds no expiry date. When a refund is involved, the amount deducted for any transactions conducted on the BluSmart app will only be refunded to the Blu wallet and not the source account.”
“The company acts as a custodian, not the owner, of this money. Hence, if a company like BluSmart ceases or alters its operations, it is legally obligated to refund unused wallet balances,” explains Soayib Qureshi, Partner, PSL Advocates & Solicitors.
Read on to know more about how you can get a refund and your rights in this case.
Try Customer Support at first
For starters, the following steps can be followed to contact the customer support to help them:Open the BluSmart app, and tap the menu icon in the top left corner. Then, select the “Help” section and then the “Blu Wallet” option. Next, tap the thumbs-down icon next to the “Does this resolve your issue?” tab. Upon doing so, a pop-up will appear, which allows the person to raise a complaint to the customer support team of Blu Wallet and request a refund. Ideally, the refunded amount should be credited to the original payment method within 5 to 7 working days.
However, given that BluSmart’s policy clearly states that such funds are non-refundable, the customers will have to go through some lengths to retrieve their money back.
Says Alay Razvi, Managing Partner, Accord Juris, “Funds cannot be kept in a digital wallet and withheld by the company. A consumer should know that a digital wallet remains the legal property of the user and cannot be withheld arbitrarily. However, when a situation arises, a consumer shall make a request, and if the matter continues to persist, the consumer shall escalate the matter to the grievance cell and also make a complaint to the RBI. Digital platforms are bound by law to process refunds transparently and within a reasonable time.”
Sonal Alagh, Partner, Alagh & Kapoor Law Offices, suggests that if an app delays or denies a refund without adequate justification, customers can first approach the platform’s internal grievance redressal mechanism via a written complaint. RBI guidelines maintain that all PPIs (prepaid payment instruments) should have clear refund and dispute resolution timelines.
Is BluSmart Wallet regulated by the RBI?
Generally, all digital wallets fall under the category of Prepaid Payment Instrument (PPI) and, as such, have to comply with RBI’s Master Directions on Prepaid Payment Instruments (PPIs), which allows provisions for “fund transfer ‘back to source account’ (payment source from where the PPI was loaded) or ‘own bank account of the PPI holder’ (duly verified by the PPI issuer).
If the company policy does not explicitly state anything regarding the wallet refunds, the person can contact the customer support to raise a complaint for the withdrawal of wallet funds.
However, the BluSmart wallet meets all the criteria set out for closed-system PPIs. As per the circular, these PPIs do not need RBI approval and hence are beyond the RBI’s regulatory purview.
“These PPIs are issued by an entity for facilitating the purchase of goods and services from that entity only and do not permit cash withdrawal. These instruments cannot be used for payment or settlement for third-party services. The issuance or operation of such instruments is not classified as a payment system requiring approval/authorisation by RBI and is, therefore, not regulated or supervised by RBI,” adds the circular.
— ShivAroor (@ShivAroor)
However, renowned journalist Shiv Aroor, who also had funds stuck in his BluSmart wallet, received a response from BluSmart, which stated that a refund would be initiated in the next 90 days if BluSmart’s services did not resume till that time.
If not the RBI, whom to approach?
Under the Consumer Protection Act, 2019, customers with e-wallets fall within the definition of a consumer of digital services. If their money remains stuck, they can file a complaint based on its monetary value before the District, State, or National Consumer Dispute Redressal Commission.
If internal escalation proves futile, the consumer can issue a legal notice for deficiency in service and initiate proceedings before the Consumer Disputes Redressal Commission. “Under the Consumer Protection Act, 2019, such inaction is categorized as unfair trade practice or deficiency of service, both actionable with claims for compensation, interest, and litigation costs”, adds Alagh.
