Customer Protection-Liability of Customers in unauthorised Electronic Banking Transactions

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Regarding the fraudulent transactions, when someone doing  online shopping or cloning of the credit/debit card or somehow manage to access to the only information available with the bank or even the hacking of the security system of the bank without the knowledge of the customer .

It can be in the form like customer is living in Delhi and someone has done shopping in USA. The innocent customer knows only when received SMS after transaction or sometime didn't get any SMS only noticed when check the passbook entries. When run to bank and informed them about  fraudulent transactions, response is poor and neglecting or saying they have lot of other works to do.

Even every debit and credit card has insured by the bank and the premium charged from the customer but they never inform the customer about the maximum capping limit of the insurance and other terms and conditions. We have received the booklet with the new debit/credit card, the first line written on it is, "you are accepting all the terms and condition upon accepting the card" without reading and also has not given in the application form for the debit/credit card. Some of the conditions written there e.g. about the insurance, "The rejection / acceptance of the claim is solely depends on the discretion of the insurance company and bank will not be responsible for it". When we are giving our hard earned saving to bank then it the bank's responsibility to guard it, after all the bank is charging to customer for it. there are some more conditions like this which are heavily in the favour of bank.

The Bank is a place, where all the people believe that the government of INDIA has given the assurance through the Reserve Bank of INDIA that the money is in safe hand. The people can save their hard earned savings here with confidence. Bank has issued secured international debit card with most advanced security feature EMV CHIP BASED, and the banking security system is also working round the clock, but when something happens or the banking security system is not working properly, failed to send a single SMS or email regarding the fraudulent transaction, then bank start saying that it is not the responsibility of the bank to keep guarding your money. If bank is not responsible for the safety of money, then why they have claimed that it is the safe place to keep your hard earned savings.

I would like to refer to a draft circular DBR.No.Leg.BC/09.07.005/2016-17  issued by RBI on 11 Aug 2016 in which the national bank has recommended certain set of instructions to realign the liabilities of such fraudulent transactions which is presently heavily skewed in favor of the banks in India. The RBI proposals are a clear indication that fraudulent transaction in which the banking system security is compromised by criminals remains entirely outside the purview of liabilities of the innocent customer. The following salient points of the proposal are worth noting:

(i) Overall liability of the customer in case of third party breaches (Para 8) is zero and time taken (max) by the customer to inform of such transactions is 03 days.

(ii) Banks must put in place (Para 4) robust and dynamic fraud detection and prevention mechanism.

This draft circular has issued on 11/08/2016 and still is a draft notification. If this will come as a notification then it will be good step to save the innocent customer from mental and financial harassment.

In the present condition, the customer has to run from bank to police station and get the same answer every time, "Investigation is going on, whenever complete we will inform you". How much time it will take not defines, it may take days to years and in the last customer will be suffered by the financial loss and time (due to fraudulent transaction and running from here to there).

I am also one of the victim of fraudulent transaction and have loss my last three years saving. Someone has done shopping by my card in Florida when I was at home without my knowledge. This fraud could not have been possible if the banking security system were firm and unbreakable. Similar there will be so many victims, who are facing problems because of the poor system.

Requesting all the members to sign this petition, so that our voice will reach upto the concerned banking authorities and they will take a necessary steps to prevent this type of fraudulent transaction and decide the liabilities of the innocent customer. Convert the draft notification to gazette notification and send the instructions to all the banks to  implement with effect. 

 



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