Tamil Nadu

South Chennai

CC/247/2022

R. Chandrasekaran - Complainant(s)

Versus

SBI Credit Card and another - Opp.Party(s)

Party in Person

05 Jun 2023

ORDER

  Date of Complaint Filed:19.07.2022

  Date of Reservation     :26.05.2023

  Date of Order              :05.06.2023

         

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION,

CHENNAI (SOUTH), CHENNAI-3.

 

PRESENT: TMT. B. JIJAA, M.L.,                                              : PRESIDENT

                    THIRU. T.R. SIVAKUMHAR, B.A., B.L.,             :  MEMBER  I 

                               

CONSUMER COMPLAINT No.247/2022

MONDAY, THE 5^th DAY OF JUNE 2023

R.Chandrasekaran,

No.2, X Block Lotus Colony,

Nandanam, Chennai -35.                                                 .. Complainant.

 

-Vs-

1.SBI Credit Card,

   SBI Cards and payments services,

   Represented by its Managing Director,

   Unit No.401 & 402 4^th Floor,

   Aggarwal Millennium Towers,

   E1,2,3 Nethaji Subhash Place,

   Wazirpur,

   New Delhi – 110 034.

 

2.SBI Credit Card Division,

   Rep. by its Branch Manager,

   4^th Floor, Tower B, ICRC, Commer Zone,

   Mount Poonamallee, Porur,

   Chennai – 600 116.                                                 .. Opposite Parties.

* * * * *

 

Counsel for the Complainant         : Party in Person

 

Counsel for Opposite Parties         : M/s. A. Damodaran, R.Meenakshi Devi, A.S. Neela Narayani

 

On perusal of records and upon hearing the oral arguments of the Complainant in person and the counsel for the Opposite Parties this Commission delivered the following:

 

ORDER

Pronounced by Member-I, Thiru. T.R. Sivakumhar, B.A., B.L.,              

(i)     The Complainant has filed this complaint as against the Opposite Parties under section 35 of the Consumer Protection Act, 2019 and prays to refund a sum of Rs.65,650/- with 18% interest from 28.12.2021 and to pay a sum of Rs.3,00,000/- as compensation for causing mental agony and rendering deficiency in service and a sum of Rs.25,000/- towards cost of this complaint.

I.  The averments of Complaint in brief are as follows:-

1.     The Complainant is the Credit Account Holder of the Opposite Parties Bank bearing No.4335 8764 4591 3602. He had been using the Credit Card for the past three years. However to the Complainant shock and surprise that three fraudulent transactions were happened on 28.12.2021, two transactions in the name of the Merchant Housing.com at Gurgaon for a sum of Rs.49,490/-and Rs.16,160/-, and another transaction for a sum of Rs.4000/-. Thus, a sum of Rs.69650/- was debited from the Complainant's Credit Card with a transaction reference No.1143308768715.

2.     The above transactions took place when the Complainant declined the transaction and without requesting for One Time Password [OTP] the above said amount was debited from his Credit Card. He received call from the Opposite Parties and immediately amounts were debited from his credit card for unauthorized three transactions. Then he immediately blocked his credit card through customer care on the very same day. The 3^rdtransaction for a sum of Rs.4000/- was automatically reversed on the same day.

3.     Immediately after receiving the Credit messages, he approached the Opposite Parties and lodged a complaint. The 2^ndOpposite Party Manager was kind enough to advice him to lodge a Card member dispute form. Accordingly the Complainant lodged the Card member transaction dispute form on 29.12.2021 disputing the unauthorized transactions.

4.     Immediately the Complainant had also lodged a complaint at Cybercrime at Vepery, Commissioner of Police, Chennai and they issued 32912210110678 dated 28/12/2021. The cybercrime directed a Reference Number to file a complaint to current jurisdiction at Anna Salai. Accordingly he had also lodged a complaint before the Inspector of Police, Annasalai, as advised by Opposite Parties. The complaint was received on 28.12.2021 and CSR was issued to him on 28.12.2021 in CSR No.450 of 2021 at 08.00 PM. The Complainant along with CSR report approached the Opposite Parties herein. The Opposite Parties have not taken any action so far.

5.     The Complainant states that the Reserve Bank of India issued a circular on 06.07.2017 limiting liability of customer in unauthorized electronic Banking Transaction. As per clause 6 of the said circular, A customer's entitlement to Zero liability shall arise where the unauthorized transaction occurs in the following events:-

i) Contributory fraud/negligence/deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).

ii) Third Parties breach where the deficiency lies neither with the Bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within 3 working days of receiving the communication from the bank regarding the unauthorized transaction.

6.     Further over all liability of the customer in third Parties breaches is Zero when the same was reported within 3 working days. Further the bank shall Credit the amount involved in the unauthorized electronic transaction to the customer account within 10 working days from the date of notification from the customer.

7.     By applying the aforesaid guideline it is proved beyond doubt that dynamic one time password, transaction SMS alert, OTP SMS alert. The Opposite Parties ought to have trace out the transactional SMS details sender ID. No steps were taken to trace out the subscriber mobile number and beneficiary details of the account.

8.     The burden of proving customer liability in case of unauthorized electronic banking transaction shall lie on the Opposite Parties bank. In the given case the Opposite Parties sent the email on 25.12.2021 wherein which they simply repudiated the claim that Bank does not have any right to raise dispute on Second factor authenticated transaction. Whereas the transaction itself is unauthenticated and it has been specifically stated that the Complainant declined the transaction and without requesting for One Time Password [OTP] the above said amount was debited from his Credit Card account.

9.     The Opposite Parties are custodian of the amount and the Opposite Parties are liable to prevent any misuse or fraudulent withdrawal from the Complainant's Credit Card account and as such negligence and deficiency in service on the part of the Opposite Parties had caused severe and irreparable loss and hardship to the Complainant. And it was duty cast upon the Opposite Parties that responsibility of the customer for the safety and security amount available undertaken by the Opposite Parties. The messages (SMS) are generated through system without manual intervention as by that the Opposite Parties have intentionally allowed illegal withdrawal to some other person who was not authorized to withdraw Rs.65,650/-.

10.    The Complainant submits that A BOOKLET ON MODUS OPERANDI OF FINANCIAL FRADUSTERS issued by Office of the RBI, Ombudsman, the Modus Operandi of SIM Swap / SIM Cloning Modus Operandi are as follows:-

"As most of the account details & authentication is connected to your registered mobile number, fraudsters try to gain access to the SIM Card or obtain duplicate SIM Card for carrying out digital transactions using OTP received on such duplicate SIM".

11.    The Complaint further submits that the Hon'ble High Court of Kerala, in identical facts and circumstances of the case categorically held as follows:-

"It is clear that the bank cannot claim any amount from the customer when a transaction is shown to be a 'disputed transaction'. The bank can recover from the customers only when it can unequivocally prove that the customer was responsible for such transaction, independently through the Civil Court. The RBI guidelines is a clear mandate to exonerate a customer in such 'disputed transaction'. RBI circular presumes the innocence of the customer in such given circumstances. However, this innocence can be controverted. The onus falls on the bank to prove otherwise.

The remedy of the bank in such circumstances is to approach the Civil Court and recover the amount form the persons who were responsible for such transactions."

12. The Complainant states that even as per the Opposite Parties investigation prima facie established that fraud has been committed. The beneficiaries ail from Mumbai and Gurgaon. There is nothing on record to establish any connivance on the part of the Complainant. In such circumstances as held by the Hon'ble National Commission in Punjab National Bank vs Leader Valves held as follows:-

"The First fundamental question that arises is whether the Bank is responsible for an unauthorized transfer occasioned by an act of malfeasance on the part of functionaries of the Bank or by an act of malfeasance by any other person (except the Complainant / account-holder). The answer, straightaway, is in the affirmative. If an account is maintained by the Bank, the Bank itself is responsible for its safety and security. Any systemic failure, whether by malfeasance on the part of its functionaries or by any other person (except the consumer/account-holder), is its responsibility, and not of the consumer."

13.    The Complainant submits that he sent several emails to the Opposite Parties. He has not received any reply. On the other hand the Opposite Parties engaged recovery agent giving him lot of trouble. Hence the complaint.

II. Written Version filed by the Opposite Parties in brief are as follows:

14.    The Opposite Parties submits that originally the Complainant has approached the Opposite Parties company on 05.08.2019 requesting to open new Credit Card Account. The application was considered and new Credit Account in Acc.No:4335876441749083 in Complainant's name was approved with Rs. 1,12,000/- credit limit.

15.    The Opposite Parties submits that thereafter the Complainant is enjoying the Cards regularly without any service default for more than three years. Even though the repayment of the Credit Card bills was not paid as per the agreed Schedule, they made some adjustments and availed their best service to the customers. The Complainant filed this complaint to hide his negligence is just against the basic principles of law.

16.    The Opposite Parties submits that all of a sudden, the Complainant raised complaint upon three transactions took place on 28th December 2021 to HOUSING.COM (two payments of Rs. 49,490/- & Rs. 16,160/-) and FUTURE PAY (Payment of Rs. 4,000) a total sum of Rs. 69,650/- and requested to block his Credit Card. The Opposite Parties further submits that his complaint was registered and his card was also blocked and the same was communicated on 28^th December 2021 via mail which was also admitted by the Complainant himself.

17.    The Opposite Parties humbly submits that, as per Reserve Bank of India (RBI) mandate, dated 06 July 2017 on Customer Protection Limiting Liability of Customers in Unauthorized Electronic Banking Transactions, a policy is designed to ensure customer protection relating to unauthorized credit card transactions. The same is updated on SBI Card's website under "Customer Grievance Redressal Policy" "The policy is based on the principles of transparency and fairness in treatment of customers. If the Cardholder has acted fraudulently the Cardholder will be liable for all losses. If the Cardholder acts without reasonable care, the Cardholder may be liable for all losses incurred. This may apply if the Cardholder fails to follow the safeguards as specified by SBICPSL."

18.    The Opposite Parties submits that even though as per RBI norms the Complainant is temporarily protected from loss sustained from electronic transaction, the burden of proof is upon the Complainant to prove his innocence before the investigating officer. Till the conclusion of investigation, the exception from liability to repay cannot be entertained to the Complainant.

19.    The Opposite Parties submits that the Complainant has admitted that he has filed a complaint before the Inspector of Police Cyber Crime, Vepery and the complaint was registered as CSR No: 450/2021, the investigation is still pending. The Opposite Party further submits that the Opposite Parties bank are always ready in all aspects to help and cooperate with the investigation and since it is true that an undisputed fact here in this case.

20.    The Opposite Parties submits that the Complainant himself has admitted in the document filed along with the complaint that he has shared the OTP with the third party for the transaction. The transaction took place with the knowledge and the concern of the Complainant, will at no cost will bind the bank to bear the transaction amount. The Opposite Party further submits that the RBI terms gives exception only to the innocent and not to the negligence of man. Therefore, till the date of completion of investigation and till date the date of proving his innocence the Complainant cannot get exception from his liability for repayment of his credit card transaction amount and other charges for his card utilizations.

21.    The Opposite Parties submits that the contention of complaint is totally wrong and denied. The Complainant has filed the present complaint with the malicious intention and ulterior motive. The Opposite Parties further submits that the alleged claim of the Complainant is false, frivolous, vexatious, devoid of merits, baseless, arbitrary and completely misconceived and liable to be dismissed with compensatory costs.

III. The Complainant has filed his proof affidavit,  in support of his claim in the complaint and has filed 6 documents which are marked as Ex.A1 to A6. The Opposite Parties had submitted his proof affidavit in support of his claim the Opposite Parties has filed 2 documents which are marked as Ex.B1 to Ex.B-2.

V. Points for Consideration:-

 

1.     Whether there is deficiency of service on the part of the Opposite Parties?

2.   Whether the Complainant is entitled for the reliefs claimed in the complaint and for what other relief/s?

POINT NO. 1 :-

22.    It is an undisputed fact that the Complainant had availed Credit card bearing No. 4335 8764 4591 3602 from the Opposite Parties and it is also not in dispute that the Complainant is using the said card for the past three years.

23.    The contentions of the Complainant are that three unauthorised transactions for a sum of Rs.65,650/- using his credit card on 28.12.2021 and after receiving the messages from the Opposite Parties about the debit made in his credit card account on 28.12.2021, he had immediately approached the Opposite Parties and had requested to block his card. Further contended that he was advised to lodge a Card member dispute form and the same was lodged on 29.12.2021, further he had also lodged complaint before the Cyber Crime, Vepery on 28.12.2021, for which a reference number was issued and was directed to lodge a complaint before Cyber Crime, Anna Salai, accordingly a complaint was lodged and a CSR No.450 of 2021 was issued to him on 28.12.2021. Inspite of having approached the Opposite Parties with the CSR report, no action was taken by the Opposite Parties. Further contended that as per the circular dated 06.07.2017 issued by the Reserve Bank of India on limiting liability of customer in unauthorized electronic Banking Transaction under clause 6 of the said circular, it was mentioned that “A customer's entitlement to Zero liability shall arise where the unauthorized transaction occurs in the following events:-

i) Contributory fraud/negligence/deficiency on thepart of the bank (irrespective of whether or not the transaction is reported by the customer).

ii) Third Parties breach where the deficiency lies neither with the Bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within 3 working days of receiving the communication from the bank regarding the unauthorized transaction.

        Further over all liability of the customer in third Parties breaches is Zero when the same was reported within 3 working days. Further the bank shall Credit the amount involved in the unauthorized electronic transaction to the customer account within 10 working days from the date of notification from the customer.”

24.    Hence, the Complainant contended that by applying the aforesaid guideline it is proved beyond doubt that dynamic one time password, transaction SMS alert, OTP SMS alert. The Opposite Parties ought to have trace out the transactional SMS details sender ID, but no steps were taken by the Opposite Parties to trace out the subscriber mobile number and beneficiary details of the account.

25.    Further contended that the burden of proving customer liability in case of unauthorized electronic banking transaction shall lie on the Opposite Parties bank. In the given case the Opposite Parties sent a email on 25.12.2021 wherein they had simply repudiated the claim that Bank does not have any right to raise dispute on Second factor authenticated transaction, whereas the transaction itself is unauthenticated and it has been specifically stated that the Complainant declined the transaction and without requesting for One Time Password [OTP] the above said amount was debited from his Credit Card account.

26.    Further contended that the Opposite Parties being the custodian of the amount, they are liable to prevent any misuse or fraudulent withdrawal from his Credit Card account and as such negligence and deficiency in service on the part of the Opposite Parties had caused severe and irreparable loss and hardship to the Complainant. And it was duty cast upon the Opposite Parties that responsibility of the customer for the safety and security amount available undertaken by the Opposite Parties. The messages (SMS) are generated through system without manual intervention as such the Opposite Parties have intentionally allowed illegal withdrawal to some other person who was not authorized to withdraw Rs.65,650/-.

27.    Further contended that even as per the Opposite Parties investigation prima facie established that fraud has been committed. The beneficiaries are from Mumbai and Gurgaon. There is nothing on record to establish any connivance on the part of the Complainant. Inspite of having sent several emails to the Opposite Parties, no reply was received but on the other hand the Opposite Parties engaged recovery agent giving him lots of trouble.

28.    The contentions of the Opposite Parties are that the complaint has been filed by the Complainant to hide his negligence. All of a sudden, the Complainant raised complaint upon three transactions took place on 28th December 2021 to HOUSING.COM (two payments of Rs. 49,490/- & Rs. 16,160/-) and FUTURE PAY (Payment of Rs. 4,000/-) a total sum of Rs.69,650/- and requested to block his Credit Card, accordingly his complaint was registered and his card was also blocked and the same was communicated on 28th December 2021 via mail which was also admitted by the Complainant himself. Further contended that as per Reserve Bank of India (RBI) mandate, dated 06 July 2017 on Customer Protection Limiting Liability of Customers in Unauthorized Electronic Banking Transactions, a policy is designed to ensure customer protection relating to unauthorized credit card transactions. The same is updated on SBI Card's website under "Customer Grievance Redressal Policy" "The policy is based on the principles of transparency and fairness in treatment of customers. If the Cardholder has acted fraudulently the Cardholder will be liable for all losses. If the Cardholder acts without reasonable care, the Cardholder may be liable for all losses incurred. This may apply if the Cardholder fails to follow the safeguards as specified by SBICPSL."

29.    Further contended that even though as per RBI norms the Complainant is temporarily protected from loss sustained from electronic transaction, the burden of proof is upon the Complainant to prove his innocence before the investigating officer. Till the conclusion of investigation, the exception from liability to repay cannot be entertained to the Complainant. The Complainant has admitted that he has filed a complaint before the Inspector of Police Cyber Crime, Vepery and the complaint was registered as CSR No: 450/2021, the investigation is still pending. Their bank is always ready in all aspects to help and cooperate with the investigation and since it is true that an undisputed fact here in this case.

30.    Further contended that the Complainant himself has admitted in the document filed along with the complaint that he has shared the OTP with the third party for the transaction. The transaction took place with the knowledge and the concern of the Complainant, will at no cost will bind the bank to bear the transaction amount. The RBI terms gives exception only to the innocent and not to the negligence of man. Therefore, till the date of completion of investigation and till date the date of proving his innocence the Complainant cannot get exception from his liability for repayment of his credit card transaction amount and other charges for his card utilizations. Hence the contention of complaint is totally wrong and denied, and the present complaint has been filed with the malicious intention and ulterior motive.

31.    On discussions made above and on perusal of records, from Ex.A-2 Complaint dated 28.12.2021 given by the Complainant to the Inspector of Police, Cyber Crime, Vepery, it is clear that the Complainant had received a call from a Lady informing about his credit card was blocked, enquired and collected various details about the Complainant’s subject Credit card. From Ex.A-3 CSR No.450 of 2021 dated 28.12.2021 issued by Anna Salai Police Station, which was issued based on the Complaint given by the Complainant, it is to be noted that the Complainant had disclosed that he had given some details about his bank and shared OTP number, of which a total sum of Rs.1,67,570/- has been withdrawn from the Subject credit card and from another credit card of the Complainant.

32.    Though the Complainant claims placing reliance on the Circular vide DBR.No.Leg.BC.78/09.07.005/2017-18 dated 06.07.2017 issued by the Reserve bank of India regarding Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions and the Complainant had quoted the relevant clauses from the said Circular, as follows:  

As per clause 6 of the said circular,

A customer's entitlement to Zero liability shall arise where the unauthorized transaction occurs in the following events:-

i) Contributory fraud/negligence/deficiency on thepart of the bank (irrespective of whether or not the transaction is reported by the customer).

ii) Third Parties breach where the deficiency lies neither with the Bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within 3 working days of receiving the communication from the bank regarding the unauthorized transaction.

        Further over all liability of the customer in third Parties breaches is Zero when the same was reported within 3 working days. Further the bank shall Credit the amount involved in the unauthorized electronic transaction to the customer account within 10 working days from the date of notification from the customer.

Clause No.9 : Reversal Timeline for Zero Liability/Limited Liability of customer :

On being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customer’s account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any). Banks may also at their discretion decide to waive off any customer liability in case of unauthorised electronic banking transaction even in cases of customer negligence. The credit shall be value dated to be as of the date of the unauthorised transaction.

Clause No.10. Further, banks shall ensure that:

1. a complaint is resolved and liability of the customer, if any established within such time, as may be specified in the bank’s Board approved policy, but not exceeding 90 days from the date of receipt of the complaint, and the customer is compensated as per provisions of paragraphs 6 to 9 above.
2. Where it is unable to resolve the complaint or determine the customer liability, if any, within 90 days, the compensation as prescribed in paragraphs 6 to 9 is paid to the customer; and
3. In case of debit card/bank account, the customer does not suffer loss of interest, and in case of credit card, the customer does not bear any additional burden of interest.

Clause No.12 : Burden of Proof – The burden of proving customer liability in case of unauthorised electronic banking shall lie on the bank.

33.    The Opposite Parties had contended placing reliance on the Circular vide DBR.No.Leg.BC.78/09.07.005/2017-18 dated 06.07.2017 issued by the Reserve bank of India regarding Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions and based on their "Customer Grievance Redressal Policy" and it is argued that as per Reserve Bank of India (RBI) mandate, dated 06 July 2017, a policy is designed to ensure customer protection relating to unauthorized credit card transactions. The same is updated on SBI Card's website under "Customer Grievance Redressal Policy" as "The policy is based on the principles of transparency and fairness in treatment of customers. If the Cardholder has acted fraudulently the Cardholder will be liable for all losses. If the Cardholder acts without reasonable care, the Cardholder may be liable for all losses incurred. This may apply if the Cardholder fails to follow the safeguards as specified by SBICPSL."

34.    And the contentions of the Opposite Party that even though as per RBI norms the Complainant is temporarily protected from loss sustained from electronic transaction, the burden of proof is upon the Complainant to prove his innocence before the investigating officer, till the conclusion of investigation, the exception from liability to repay cannot be entertained to the Complainant.

35.    On the arguments placed by the Complainant and the Opposite Parties, it is for this Commission to find out whether the transactions taken place on the Complainant’s credit card can be termed as Unauthorised transaction. It is clear from Ex.A-2 and A-3 that the Complainant had received calls from a specific mobile number from a lady, to whom the Complainant had found to disclose his bank details and more particularly  had disclosed OTP (One Time Password) details and had shared the same to the said lady, of which the transactions were found to be taken place. Thus the transactions that has taken place could not be termed as Unauthorised transactions and the same is of clear negligence on the part of the Complainant and it is also clear that the Complainant had not acted with utmost care or with reasonable care. The reference made by the Complainant on the Clauses of the RBI Circular as mentioned above, would in no way applicable to the Complainant, when the transactions would itself could not be termed as Unauthorised Transactions, even otherwise as per clause 6(b) of the RBI Circular dated 06.07.2017 Limited Liability of a Customer : 7. A customer shall be liable for the loss occurring due to unauthorised transactions in the following cases: (i) in cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transactions shall be borne by the bank.

36.    Hence it is clear that the Complainant had acted negligently by sharing the OTP details as mentioned in EX.A-3, which was not protested or denied by the Complainant and from Clause 6(b) mentioned above, it is clear that the Complainant has to bear entire loss sustained and the Bank shall be made liable and responsible for any loss occurring after the reporting of the Unauthorised transactions.

37.    Therefore this Commission is of the considered view that the unauthorised transactions as alleged by the Complainant has taken place purely on the negligence of the Complainant and there is no deficiency of service on the part of the Opposite Parties. Accordingly Point No.1 is answered.

POINT NO 2:-

38.    As discussed and decided Point No.1 against the Complainant, the Complainant is not entitled for the reliefs claimed in the complaint and hence not entitled for any other relief/s. Accordingly Point No.2 is answered.

In the result, the complaint is dismissed. No costs.

Dictated to Steno-Typist, transcribed and typed by her, corrected and pronounced by us in the Open Commission, on 5^th of  June 2023.

 

 

T.R. SIVAKUMHAR                                                               B.JIJAA

    MEMBER I                                                                     PRESIDENT

 

List of documents filed on the side of the Complainant:-

 

Ex.A1	28.12.2021	Unauthorised calls from the Opposite Parties and messages to the Complainant’s mobile
Ex.A2	28.12.2021	Cybercrime complaint given to the Complainant against the Opposite Parties
Ex.A3	28.12.2021	CSR issued by the Annasalai Police Station to the Complainant
Ex.A4	29.12.2021	Card member transaction dispute form
Ex.A5		Email conversations between the Complainant and the Opposite Parties
Ex.A6		Complainant credit statements

 

 

List of documents filed on the side of the Opposite Parties:-

Ex.B1	05.08.2019	Credit card application Form
Ex.B2	22.08.2022	Intimation letter along with Transaction details

 

 

T.R. SIVAKUMHAR                                                               B.JIJAA

    MEMBER I                                                                      PRESIDENT