Absence Of Transaction Alert SMS, Chandigarh District Commission Holds SBI Card Liable For Failure To Avoid Unauthorized Transactions

Brief Facts:

In July and August 2019, an unauthorized individual, distinct from the Complainant, illicitly utilized the Complainant's credit card without consent. This unauthorized party transferred funds from the Complainant's SBI credit card to an e-wallet used by the Complainant. Additionally, numerous purchases were made through various transactions, with amounts ranging from Rs. 1500/- to 4000/- from the e-wallet. Further, the Complainant didn't receive any OTP or alerts on his registered mobile number. Despite promptly notifying SBI Card with comprehensive details, including dates, times, and transaction portals, no action was taken. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”) and filed a consumer complaint against SBI card.

In response, SBI card stated that the alleged fraudulent transactions were conducted under 3D secure conditions, with transactions secured and validated through Dynamic OTPs sent to the Complainant's registered mobile number. It argued that since the transactions were completed post-second-level authentication, they have no chargeback rights. It contended that online transactions, such as those made with the Complainant's credit card, require specific mandatory details like card expiry date and CVV, which are presumed to be known only to the cardholder.

Observations by the District Commission:

The District Commission noted that on 26.08.2019, the Complainant raised a transaction dispute concerning an unauthorized transaction of Rs. 2000/- with the SBI Card. However, SBI Card failed to provide evidence regarding the issuance of dynamic passwords or transaction alert SMS. Therefore, the District Commission held SBI Card liable for deficiency in services for demonstrating a lack of diligence in resolving the matter satisfactorily within a reasonable timeframe of three months.

Consequently, the District Commission directed SBI Card to resolve the transaction dispute within 45 days from the receipt of the order. It directed SBI Card to pay a compensation of ₹ 7000/- to the Complainant for the mental agony, and harassment endured, and towards litigation expenses incurred by him.