Banks not liable for online fraud: Consumer Court

New Delhi: Banks in India have been incessantly warning people against scamsters, urging customers to never share their banking details, ATM pin details, credit card numbers etc. Despite these warnings, if customers still fail to adhere to the basic precautionary norms and fall prey to fraudulent schemes or activities, they will not be able to hold the banks responsible for it.

A report in the Times of India said that the Consumer Dispute Redressal Commission in Gujarat's Amreli district refused to accept compensation claims of victim on the grounds that he was duped because of his own negligence.

The case pertains to a retired teacher named Kurji Javia. On 2 April 2018, somebody posing as a State Bank of India (SBI) manager sought Javia’s ATM card details, which the later shared. Next day when his pension of Rs 39,358 was deposited in his account, simultaneously Rs 41,500 debited. Alarmed, Javia called the bank but did not get any response. In his complaint, Javia pleaded that his loss would have been prevented if the banks responded hastily and thus sued SBI for the lost amount and Rs 30,000 for harassment.

The consumer court however ruled that since Javia shared his banking details despite the banks repeated warnings on not sharing the same, his complaint will not stand a chance.

RBI’s guidelines to Banks for customer notification

The RBI had in its 2017 circular said that Banks must ask their customers to mandatorily register for SMS alerts and register for email alerts, for electronic banking transactions wherever available.

RBI said that banks must mandatorily sent the SMS alerts to the customers and email alerts wherever registered.

Banks must also advise the customers to notify their bank of any unauthorised electronic banking transaction at the earliest after the occurrence of such transaction, and informed that the longer the time taken to notify the bank, the higher will be the risk of loss to the bank or customer.