Man loses Rs 1.64 lakh in online ‘fraud’, bank ordered to refund amount, pay Rs 25,000

Case

The complainant had alleged that Rs 1.64 lakh was unauthorisedly transferred from his savings account without his knowledge or consent. He contended that he had never shared his ATM PIN, OTP, internet banking credentials or any confidential information with anyone. According to the complaint, he immediately reported the incident to the SBI helpline, the National Cyber Crime Reporting Portal, the bank branch and the police authorities.

He argued that despite promptly reporting the incident, SBI rejected his claim without conducting a proper inquiry or furnishing any enquiry report. He relied on the Reserve Bank of India‘s July 6, 2017 circular on “Customer Protection- Limiting Liability of Customers in Unauthorised Electronic Banking Transactions”, which provides for zero customer liability in cases of third-party breaches reported without delay.

SBI opposed the complaint, claiming that the transaction could not have been completed without entering the username, password and OTP sent to his registered mobile number. It further stated that the complainant is himself at fault for the said unauthorised transaction. It was argued that the customer might have acted upon under the influence of fraudster knowingly/unknowingly due to his own negligence.

The commission observed that SBI failed to produce any technical investigation report, server logs, IP address details, forensic analysis or other electronic evidence showing that the complainant had voluntarily authenticated the disputed transaction. It emphasised that under the RBI circular, the burden of proving customer negligence lies on the bank when it seeks to deny protection against unauthorised electronic transactions.

“The rejection of the complainant’s claim is based merely on assumptions and not on any legally admissible evidence. Furthermore, the opposite parties have not placed on record any reasoned enquiry report showing that a fair and independent investigation was conducted before rejecting the complainant’s claim,” the commission observed.

It further noted that once a customer promptly reports an unauthorised electronic transaction, the bank is expected to conduct a thorough, transparent and fair investigation in accordance with the RBI guidelines and failure to do so amounts to deficiency in service.

Allowing the complaint, the commission directed SBI to refund Rs 1.64 lakh besides paying Rs 15,000 as compensation and Rs 10,000 as litigation expenses.

Takeaway

If a customer promptly reports an unauthorised transaction, the bank must conduct a fair, transparent and evidence-based investigation and prove customer negligence with concrete technical evidence.

For consumer-related grievances, individuals may contact the consumer helpline in their respective states and Union territories (Punjab: 0800-22577) or call the National Consumer Helpline at 1915 for assistance.