Failure To Investigate Fraudulent Transactions And Determine Customer's Liability, North Delhi District Commission Holds SBI Liable For Deficiency In Service

The District Consumer Disputes Redressal Commission-I, North Delhi bench, comprising Divya Jyoti Jaipuriar (President), Ashwani Kumar Mehta (Member), and Harpreet Kaur Charya (Member), held State Bank of India liable for being unable to investigate a series of fraudulent and unauthorized ATM transactions. Further, SBI failed to determine the Complainant's liability as per RBI's instructions and thus engaged in a deficiency in service. Brief Facts: Mr Lallian Sangi (“Complainant”) had a savings bank account with the State Bank of India (“SBI”). One day, he received numerous alerts of unauthorized ATM card transactions on her registered mobile number. A sum of Rs. 1,84,587/- was withdrawn in total through several transactions done in Mumbai. The Complainant reported these fraudulent transactions to SBI and also filed a police complaint. SBI requested a copy of the FIR and an ATM Transaction Dispute form from the Complainant. Despite the Complainant's pursuit of an FIR, submission of relevant documents and several reminders to SBI, there was no response. The Complainant sent a legal notice to SBI, demanding a refund and compensation. SBI denied liability, attributing the incident to the Complainant's actions. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-I, North Delhi (“District Commission”). SBI contended that due to the complainant's negligence, his ATM card security was compromised, and SBI cannot be held liable for the same. It argued that the Complainant failed to report timely and shifted blame without evidence. It also maintained innocence and questioned the Complainant's motives. Observations by the Commission: The District Commission noted the Complainant's timely reporting of the incident and SBI's failure to investigate the fraudulent transactions promptly. Further, it was observed that SBI attempted to shift blame without providing any evidence which raised considerable doubts on its submissions. The District Commission cited the Reserve Bank of India's instructions emphasizing zero liability of the customers in case of third-party breaches when the incident is reported to the bank within 3 working days and limited liability of customers in similar cases with delays. The District Commission, after reviewing the provided instructions and SBI's response, concluded that it failed to take any measures to evaluate the Complainant's liability in the unauthorized electronic banking transaction. Furthermore, it also failed to adhere to the instructions issued by the Reserve Bank of India, which were intended to safeguard the customers' liability. As a result, the District Commission directed SBI to pay Rs. 1,84,587/- with 9% interest from the date of the order and awarded Rs. 1,00,000/- as compensation for mental distress. Case Title: Lallian Singh vs Branch Manager, State Bank of India Case No.: CC No. 84/2021 Click Here To Read/Download The Order

Failure To Investigate Fraudulent Transactions And Determine Customer's Liability, North Delhi District Commission Holds SBI Liable For Deficiency In Service

Smita Singh

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