Demat Account Shows Unauthorised Transaction: What to Do

Finding an unauthorised transaction in your Demat account can be alarming. You may notice an unfamiliar debit of shares, an unexpected credit, a securities transfer, a pledge entry or another transaction that you do not remember authorising.

The first step is not to panic. A transaction that looks unfamiliar may sometimes be related to a legitimate sale, transfer, corporate action, pledge or settlement. However, if you cannot identify the transaction or confirm that you authorised it, you should report it promptly.

SEBI advises investors to carefully verify all debits and credits in their transaction statements and inform their Depository Participant (DP) or the relevant depository about any unauthorised debit or credit.

What Is an Unauthorised Demat Transaction?

An unauthorised Demat transaction is a securities-related transaction that you did not initiate, approve or otherwise authorise.

It may involve:

• Shares debited from your account
• Securities transferred to another Demat account
• Unexplained credits
• Unauthorised pledge or re-pledge activity
• Unexpected changes in holdings
• Unfamiliar corporate-action entries
• Transactions that do not match your trading records

For example, suppose you own 500 shares of a company and suddenly see:

Debit: 100 shares

If you did not sell, transfer, pledge or otherwise authorise the transaction, you should investigate it immediately.

First Check Whether the Transaction Is Actually Unauthorised

Not every unfamiliar entry is fraudulent.

Before reporting it as an unauthorised transaction, check whether it could be connected to a legitimate activity.

Check Your Trading Account

Look at:

• Order history
• Trade book
• Contract notes
• Settlement records

A share debit may be connected to a sale you made earlier.

Check Your Transfer History

You may have transferred securities:

• To another Demat account
• While changing brokers
• While consolidating accounts
• To a family member
• Through an authorised instruction

Check Corporate Actions

Look for:

• Bonus issues
• Stock splits
• Mergers
• Demergers
• Scheme-related adjustments
• Other corporate actions

A corporate action can change the securities appearing in your account without being a normal buy or sell transaction.

Check Pledge Activity

If you have pledged securities as collateral, review your pledge and re-pledge records.

Check Your Demat Statement

Look at the:

• Transaction date
• Security name
• ISIN
• Quantity
• Debit/credit
• Transaction description
• Reference number, if available

If none of these explains the transaction, treat it as an unexplained transaction and contact your DP.

Common Examples of Unauthorised Demat Transactions

1. Shares Debited Without Selling

This is one of the most common situations investors worry about.

For example:

Holding before transaction: 1,000 shares

Unexpected debit: 200 shares

Remaining holding: 800 shares

First check whether there was a sale, transfer, pledge-related transaction or corporate action.

If there is no legitimate explanation, report it to your DP.

2. Shares Transferred to Another Account

You may discover that securities have been transferred out of your Demat account.

This is more serious if:

• You did not initiate the transfer
• You did not sign or authorise an instruction
• You do not recognise the destination
• There is no corresponding legitimate transaction

Ask your DP for the details and records relating to the transfer.

3. Unauthorised Pledge

A pledge allows securities to be used as collateral under applicable arrangements.

If you find a pledge that you did not create, contact your DP and the relevant intermediary immediately.

Do not assume that the shares have been sold merely because their status has changed.

4. Unexpected Credit

An unauthorised transaction is not limited to a debit.

You may also see shares credited to your account that you do not recognise.

Possible explanations include:

• Bonus shares
• IPO allotment
• Merger or demerger
• Rights-related activity
• Transfer from another account
• Other corporate actions

If none of these explains the credit, ask your DP to identify its source.

What to Do Immediately After Finding an Unauthorised Transaction

If you believe a transaction is unauthorised, act promptly.

Step 1: Take a Screenshot and Save the Statement

Save the relevant transaction entry.

Record:

• Date
• Time, if available
• Security name
• ISIN
• Quantity
• Transaction type
• Reference number
• Available remarks

Also download the complete transaction statement for the relevant period.

Do not rely only on a screenshot.

Step 2: Check Your Broker’s Records

If your Demat account is connected to a trading account, check whether the transaction originated from a trade.

Compare:

Demat transaction

with

Broker trade book

and

Contract note

If the broker shows a sale that you did not place, report the issue to the broker immediately.

Step 3: Check Your Email and SMS Alerts

Search your registered email and SMS messages for the date of the transaction.

Look for alerts from:

• Broker
• DP
• CDSL
• NSDL
• Other authorised intermediaries

The alert may provide additional information about the transaction.

SEBI advises investors to register for the depository’s internet-based facilities or mobile services to monitor their holdings.

Step 4: Contact Your Depository Participant

Your Depository Participant (DP) should generally be your first formal point of contact for an unexplained Demat transaction.

Tell the DP:

“I have identified a transaction in my Demat account that I did not authorise.”

Provide:

• Demat account number
• PAN
• Security name
• ISIN
• Quantity
• Transaction date
• Transaction reference
• Screenshot
• Statement copy

Ask the DP to explain:

1. What caused the transaction?
2. Which instruction authorised it?
3. What was the mode of instruction?
4. Where were the securities transferred, if applicable?
5. What records are available for the transaction?

Keep your complaint in writing where possible so that you have a record of the communication.

Step 5: Contact Your Broker if a Trade Is Involved

If the transaction appears connected with a trading account, contact your broker’s support or grievance team.

Ask for:

• Order details
• Order placement time
• Trade details
• Contract note
• IP/device information where the broker can provide it under its applicable processes
• Relevant transaction records

If the broker confirms that a trade was placed from your account but you did not authorise it, clearly state that you dispute the transaction.

Step 6: Contact the Depository if Necessary

If the DP does not resolve or adequately explain the issue, you can escalate the complaint to the relevant depository.

For CDSL accounts, CDSL provides a dedicated grievance mechanism for complaints involving DPs and depository services.

CDSL’s current grievance page also provides an online complaint form requiring details such as the Demat account number, PAN, contact information, complaint details and supporting documents.

For an NSDL account, use the applicable NSDL investor grievance mechanism.

Step 7: Escalate Through SEBI SCORES

If the matter remains unresolved through the concerned intermediary/depository’s grievance process, investors can use SCORES, SEBI’s online grievance-redressal platform.

SEBI’s Investor Charter specifically directs investors with Demat-related grievances to the relevant depository/DP and provides for lodging complaints with SEBI through SCORES.

SCORES is designed to facilitate complaints against SEBI-registered intermediaries and market infrastructure institutions.

When filing a complaint, provide supporting documents such as:

• Demat statement
• Transaction statement
• Broker records
• DP complaint
• DP response
• Screenshots
• Email correspondence
• Other relevant evidence

SCORES allows supporting documents to be uploaded with a complaint.

Step 8: Consider Police/Cybercrime Reporting Where Fraud Is Suspected

If you have evidence suggesting that your account credentials, OTP, electronic instructions or other access mechanisms were misused and you believe a criminal offence may have occurred, consider reporting the matter to the appropriate law-enforcement or cybercrime authority.

This is separate from the securities-market grievance process.

You should preserve all evidence, including:

• Emails
• SMS messages
• Screenshots
• Login alerts
• Transaction statements
• Broker communications
• DP communications
• Any suspicious links or messages

Do not delete potentially relevant evidence.

What Information Should You Include in Your Complaint?

A clear complaint makes investigation easier.

You can structure it like this:

Information	Example
Demat account	Your account details
Security	Company name
ISIN	Relevant ISIN
Transaction date	Date of debit/credit
Quantity	Number of securities
Transaction type	Debit/transfer/pledge
Issue	Not authorised by me
Supporting record	Statement/screenshot
Action requested	Explain and investigate transaction

You should clearly distinguish between what you know and what you suspect.

For example:

Fact: “200 shares were debited on 15 September.”

Fact: “I did not place a sell order for these shares.”

Request: “Please provide the basis and instruction details for this debit.”

This is better than immediately making an unsupported accusation.

Can You Reverse an Unauthorised Demat Transaction?

The possibility of reversal depends on the type of transaction, how it occurred and the applicable rules and investigation findings.

Do not assume that every transaction can automatically be reversed.

For example, the process can be different for:

• Unauthorised broker trade
• Unauthorised securities transfer
• Incorrect DP entry
• Pledge-related transaction
• Corporate-action adjustment
• Settlement-related transaction

That is why you should report the exact transaction and ask the DP/broker to investigate the underlying instruction.

How Long Should You Wait Before Reporting?

You should not wait for the next monthly statement if you have already identified an unexplained transaction.

SEBI advises investors to verify transaction statements and inform the DP or respective depository in case of an unauthorised debit or credit.

The earlier you report an unexplained transaction, the easier it can be to establish the relevant transaction trail.

What If the DP Says the Transaction Was Authorised?

Ask for the basis of that conclusion.

Depending on the transaction, you can request information such as:

• Instruction details
• Transaction reference
• Date and time
• Mode of instruction
• Relevant transfer details
• Pledge instruction
• Settlement information
• Other records supporting the transaction

If you genuinely did not authorise the transaction, clearly state that you dispute it and ask for the complaint to be formally recorded.

Keep the response from the DP.

What If Your Broker Says the Trade Was Placed From Your Account?

Do not assume that this automatically settles the matter.

Ask for the relevant transaction records and compare them with your own records.

For example, check:

• Trade time
• Order details
• Quantity
• Price
• Order type
• Contract note
• Login/security alerts

If you continue to dispute the trade, follow the broker’s formal grievance process and escalate through the applicable securities-market mechanism if required.

Demat Account Unauthorised Transaction: Escalation Path

A practical escalation path is:

1. Identify the transaction

↓

2. Check broker/trade/transfer/corporate-action records

↓

3. Contact DP

↓

4. Contact broker, if a trade is involved

↓

5. Escalate to the relevant depository

↓

6. Use SEBI SCORES where appropriate

↓

7. Consider law-enforcement/cybercrime reporting if fraud is suspected

CDSL’s current investor grievance framework provides for complaints through its portal and SCORES, followed by further mechanisms such as review, grievance redressal and, where applicable, online dispute resolution/arbitration.

Can You File a Complaint Directly With CDSL?

If your account is with CDSL and the issue concerns a CDSL DP or depository service, CDSL provides an online grievance facility.

The current CDSL complaint form asks for information including:

• First holder’s name
• Demat account number
• PAN
• Email
• Contact number
• Complaint against
• Complaint details
• Supporting documents

An OTP is used to validate the submission.

You should generally contact the DP first and escalate to the depository when appropriate.

What Is SCORES and When Is It Useful?

SCORES is SEBI’s online platform for facilitating investor complaints relating to the securities market against listed companies, SEBI-registered intermediaries and market infrastructure institutions.

It is not simply a general customer-support portal.

SCORES requires you to identify the concerned entity and provide details of the complaint. Supporting documents can also be uploaded.

Under the current SCORES process, the concerned entity is required to submit an Action Taken Report within 21 calendar days of receiving the complaint. If the investor is dissatisfied, the system provides review mechanisms within specified timelines.

What Not to Do After Finding an Unauthorised Transaction

Avoid these mistakes.

Do not ignore it

Even a small unexplained transaction should be checked.

Do not share your OTP

Never give an OTP to someone claiming to be from your broker, DP or depository.

Do not share your login password

Customer support should not require you to disclose your account password.

Do not delete messages

Keep relevant SMS and emails as evidence.

Do not rely only on phone calls

After speaking with customer support, try to obtain a written complaint reference or confirmation.

Do not immediately assume the cause

First identify whether it was a trade, transfer, corporate action, pledge or another legitimate activity.

Do not delay reporting

Prompt reporting creates a clearer transaction trail.

How to Protect Your Demat Account

Prevention is easier than dealing with an unexplained transaction later.

1. Monitor Your Holdings

Regularly check your Demat balance and transaction statement.

2. Enable Alerts

Keep your registered mobile number and email address updated.

3. Use Depository Online Facilities

SEBI recommends registering for the depository’s internet-based facility or mobile app to monitor holdings.

4. Protect Your Login Credentials

Use strong and unique passwords.

5. Never Share OTPs

Treat every OTP as confidential.

6. Be Careful With Transfer Instructions

CDSL’s investor charter advises investors not to sign or issue blank or partially filled Delivery Instruction Slips and to keep the DIS book safely.

7. Reconcile Your Records

Compare:

Demat statement + trading records + personal investment records

This can help you identify discrepancies early.

Demat Transaction vs Trading Transaction

Understanding this distinction is important.

Demat Transaction	Trading Transaction
Movement of securities	Market buy/sell activity
Recorded through DP/depository system	Recorded by broker/exchange systems
Can include transfers	Primarily trades
Can include corporate actions	Does not represent all corporate actions
Can show securities debit/credit	Shows order/trade details

For example, if you sell 100 shares:

Trading account: Shows the sale.

Demat account: Shows the securities debit as part of the applicable settlement process.

Therefore, seeing a debit does not automatically mean someone has illegally sold your shares.

Example: How to Investigate an Unauthorised Debit

Suppose your Demat account originally has:

1,000 shares of Company A

You receive an alert showing:

Debit: 250 shares

You did not sell any shares.

Check 1: Broker

No sale found.

Check 2: Transfer

No transfer instruction found.

Check 3: Pledge

No pledge or invocation found.

Check 4: Corporate action

No relevant corporate action.

Check 5: Demat statement

The statement shows a debit of 250 shares with an unfamiliar transaction reference.

At this point, contact your DP and formally report the transaction as unauthorised/unexplained.

Ask for the instruction and transaction records supporting the debit.

Documents to Keep Ready

When reporting an unauthorised Demat transaction, keep these documents available:

• Demat account statement
• Transaction statement
• Holding statement
• Broker trade book
• Contract note
• Order history
• Transfer records
• Pledge records
• Corporate-action information
• SMS alerts
• Email alerts
• DP correspondence
• Broker correspondence

The more clearly you can establish the timeline, the easier it is to explain the issue.

Frequently Asked Questions

What should I do if my Demat account shows an unauthorised transaction?

First verify that it is not related to a sale, transfer, pledge, corporate action or settlement. If you cannot identify it, contact your DP immediately and report the transaction. SEBI specifically advises investors to inform the DP or respective depository about unauthorised debits or credits.

Can someone transfer shares from my Demat account without my permission?

An unauthorised transfer should not be ignored. Contact your DP immediately, preserve the transaction records and ask for the instruction and transfer details.

What if shares were sold from my Demat account without my permission?

Check your broker’s order and trade records immediately. Contact the broker and DP, formally dispute the transaction and preserve all related records.

Should I contact my broker or DP first?

For a Demat securities transaction, the DP is an important first point of contact. If the transaction involves a broker trade, contact the broker as well.

Can I complain to SEBI about an unauthorised Demat transaction?

Yes. After using the appropriate grievance channel with the concerned intermediary/DP, you can use SEBI’s SCORES platform for eligible securities-market complaints.

What documents are required for a Demat complaint?

Keep your transaction statement, account details, transaction reference, screenshots, broker records and correspondence with the DP or broker. CDSL’s online complaint process also allows supporting documents to be uploaded.

Can an unexpected share debit be caused by a corporate action?

Yes. Mergers, demergers, splits and other corporate actions can change securities balances. Check the transaction description and relevant corporate-action information before treating the debit as unauthorised.

How can I prevent unauthorised Demat transactions?

Regularly monitor your holdings and transaction statements, enable alerts, protect your login credentials and OTPs, and carefully handle securities-transfer instructions. SEBI recommends using depository online facilities to monitor holdings.

What if my DP does not resolve the complaint?

You can escalate the matter to the relevant depository and, where appropriate, use SEBI SCORES. CDSL also provides additional grievance and dispute-resolution mechanisms for eligible complaints.

Conclusion

An unauthorised Demat transaction should be investigated promptly, but an unfamiliar entry does not automatically mean fraud. First check your trading records, transfer history, pledge details and corporate actions.

If the transaction still cannot be explained, contact your DP immediately and provide the transaction details and supporting documents. If a trade is involved, contact your broker as well. If the issue is not resolved through the relevant intermediary, you can escalate it to the depository and use SEBI SCORES where appropriate.

Regularly checking your Demat holdings and transaction statements, keeping your contact details updated and protecting your account credentials can help you detect suspicious activity at an early stage.