Kerala man's account frozen over mysterious UPI payment—What to do, rules, customer rights explained

A man from Kerala alleged on social media that his HDFC bank account was frozen after he received two unknown UPI payments. He said a PhonePe user named Puthumbaka Suma sent ₹2,000 on 31 August and ₹4,000 on 3 September. Suspecting a scam, he chose not to return the money.

The man claimed the bank froze his bank account without prior notice, leaving his salary inaccessible. He tagged the Kerala Police, calling the move illegal and posted on X: “Kerala Police I’d like to bring to your notice that on the 31st and 4th of August I received two unknown payments via UPI. I did not send it back as I thought it was some scam [sic].”

He added that the sender contacted him via WhatsApp, asking to return the amount, but he advised them to approach their bank instead.

He said the bank placed a lien on the disputed amount and froze his entire account, preventing him from making payments.

Expressing concern, he wrote, “There is a Kerala high court ruling that says banks can only freeze disputed amount and not the whole account. How should I survive? How do I make my payments and pay my employees their wages? I have even written an email to the cyber cell. The response team was very efficient."

The man also mentioned recovering from a broken jaw and spine injury after an accident, making it difficult to visit the bank.

“I’m currently recovering after a broken jaw and spine injury. How can I be expected to go to the bank to settle these trivial matters? @HDFCBank_Cares did this without even informing me,” the post said.

Rules and customer rights

According to the Kerala High Court, banks cannot freeze entire accounts over disputed transactions. They may mark a lien only on the disputed amount, ensuring customers retain access to the rest of their funds. The court said freezing full accounts for minor disputes is unjust and disrupts financial stability.

"The practice of freezing entire accounts for disputes involving relatively minor sums is not only unjust but also disrupts the financial stability of account holders. Banks are henceforth directed to exercise their right of lien only over the specific disputed amounts, leaving the rest of the account balance accessible to the customer," the ruling states.

In another post shared on 7 September, he revealed that HDFC branch manager Shaji Thomas, Abey Joseph of Manarcad branch, Suhas Aitwade of the HRBR layout branch, provided him assistance in the case and helped him unblock his account. Another cautious advisory followed this post, warning banking customers against cybercrimes and phishing scams.

He detailed the steps to follow in the event of a disputed transaction amid fraud risk:

"If this happens to you, I would strongly recommend contacting your bank and allowing the bank to verify and, if appropriate, reverse the transaction.

In my case, I received an unexpected payment from a person who subsequently asked me to return it. I told her to contact her bank and said that I would co-operate with any reversal initiated or verified through the bank.

A cyber complaint was subsequently filed against me. I was then asked to pay substantially more than the amount originally received in exchange for withdrawing the complaint. I did not agree to this and instead chose to deal with the matter through the proper banking and legal channels.

Today, I visited my bank and was informed that my account had been unfrozen and that the disputed amount was being held under lien pending the appropriate process.

I am sharing this only as a cautionary account of my experience. If you receive money into your account unexpectedly, do not transfer it back solely on the basis of messages or phone calls. Contact your bank, document the communication, and let the bank or the appropriate authorities handle the reversal and verification.

It is far safer to let the banking system resolve a disputed transaction than to try to sort it out privately."