ATM frauds: More power to you now

Pushpa Girimaji

In July this year,  I got a message on my cell phone that Rs 10,000 had been withdrawn from my account through an ATM. I was quite shocked because I was home at that time and the ATM card was also with me. I immediately contacted the bank’s helpline and they assured me that this had happened due to a technical glitch and that the money would be returned to my account.  However, the bank did not refund the money and, in the meanwhile, there were several such fraudulent withdrawals from my account. By the time the bank finally blocked my card, I had lost Rs 50,000.  Now the bank admits that the withdrawals happened in ATMs outside the country, but blames me for leaking my PIN number.  Should I go to the consumer court?

If the bank had paid due attention to your first complaint and blocked the card immediately and given you an alternate card,  the damage could have been contained. However, the bank obviously did not even investigate into it and told you that the withdrawal was on account of a computer glitch. So, the bank has to take responsibility for negligence. Besides, the bank failed to  comply with the policy of  ‘zero  or limited  customer liability’ for fraudulent electronic transactions  announced by the Reserve Bank in July this year.  

In fact, there are two positive factors in your favour. First is the ‘zero liability’ policy, as per which the customer has no liability in case of fraudulent electronic transactions, where the bank is guilty of contributory fraud or negligence or deficiency. Or where a third party is involved in the fraud, the customer has zero liability if the fraud is reported within three days of getting the SMS alert. So the bank has  to compensate you.

Second is the RBI notification widening the scope of the Banking Ombudsman scheme, as per which the Ombudsman not only has the jurisdiction to resolve such cases, but also award compensation for harassment and mental anguish, besides loss of the complainant’s time and other expenses. This is besides the compensation for any loss suffered as a direct consequence of the bank’s omission or commission. So, please send a complaint to the nodal officer of the bank, pointing out these facts. If he fails to resolve the matter to your satisfaction within a month, lodge a complaint with the banking ombudsman.

Can you quote any such case resolved by the Ombudsman?

I remember one particular case decided by the Ombudsman during 2012-2013, which is almost identical to your case. Here too, when the complainant first came to know about the fraudulent withdrawal through the SMS received on his mobile, he immediately  contacted the bank branch where he had an account. Instead of registering the complaint, the bank asked him to contact the call centre of the bank. The call centre told him that the debit was due to a technical fault and would be resolved within a week’s time. That was, however, not done and  illegal withdrawals continued. Then the call centre said they were happening through an ATM outside the country. By the time the bank blocked his card, as much as Rs 1,63,668 had been withdrawn from his account. Subsequently, the bank accused the complainant of having  negligently passed on the PIN number to  fraudsters. It also argued that the customer had not given the call centre proper details as a result of which they believed that it was a computer error. However, from the recording of the conversation between the customer and the call centre, it became clear that the complainant had clearly mentioned that it was a fraudulent withdrawal and given details, but the call centre personnel had carelessly classified it as a technical error.

The complainant also said he had not disclosed his card information to anyone. Besides, at the time of withdrawal of the money from an ATM in a foreign country, he was in India. Considering the deficiency on the part of the bank, the Ombudsman in this case passed an award asking the bank to  compensate the complainant to the extent of unauthorised withdrawals made from his account.

Of course, now with the widening of the powers of the banking ombudsman and  the ‘zero liability’ policy announced by the RBI,  you have a much stronger case and you do not have to go to the consumer court as the Ombudsman can award you not just refund of the money lost, but also compensation. The process too is much simpler and faster here.