A consumer court in Delhi has ordered a private bank to refund Rs 70,084 to a woman who had lost the amount in an online fraud in July 2016. The court held that, as per Reserve Bank of India guidelines, the customer bears no liability for a third-party breach once she has notified the bank within three working days.
A District Consumer Disputes Redressal Commission, south district, bench comprising president Monika Aggarwal Srivastava and member Ritu Garodia also ordered the bank to pay additional compensation of Rs 25,000 and litigation costs.
“The RBI circular is unequivocal in stating that in cases of third-party breaches, where neither the bank nor the customer is at fault, and if the customer provides intimation within three working days, the liability rests with the bank. In this case, the complainant had duly informed the bank on July 10, 2016, about the unauthorised transactions. The opposite party bank failed to reverse the transaction,” the commission said.
The commission held that the bank failed to establish any negligence on the part of the complainant and did not reverse the fraudulent debits despite receiving timely notification on July 10, 2016 regarding the unauthorised transactions, particularly the loss of Rs. 70,084 that occurred on July 9, 2016. The court also emphasised on a precedent from the Bombay High Court judgement, which had held that the burden of proving customer liability in unauthorised electronic transactions rests entirely on the bank. As per the submission, complainant held a savings account with the bank, which was linked to her mobile number. There were unauthorised online transactions of Rs 77,114 from the complainant’s account without her knowledge, she stated.
The complainant alleged that her phone was facing technical issues and she did not receive SMS notifications or OTPs in time during that period. The woman stated immediately after receiving alerts, she emailed to the customer care of the bank on July 10, 2016, and asked it to block her card and further transactions. She also lodged a police complaint. The unauthorised debits set off further losses, she alleged. The bank levied penalty charges on her account, and investments. As per the details, her insurance policy was revived only after she paid penalty charges and she did not get refund the amount.
After a legal notice in this regard did not yield result, she approached the consumer commission seeking a refund, compensation and litigation costs. The Delhi consumer court order does not publicly name the specific private bank involved in any case, they refer to it only as the “opposite party bank” or a private bank.
