DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi-110016
Case No.372/2013
Maj Gen (Retd) Rajender Kumar Yadav Senior Citizen
S/o Late Col. R.S. Yadav, (64 years old)
R/o 6/17 Sarvapriya Vihar,
New Delhi-110016.
….Complainant
Versus
Syndicate Bank,
2, Kaushalya Park,
Hauz Khas,
New Delhi-110016
Through Branch Manager
….Opposite Party
Date of Institution : 20.06.2013 Date of Order : 09.01.2018
Coram:
Sh. N.K. Goel, President
Ms. Naina Bakshi, Member
ORDER
Briefly stated, the case of the complainant is that the complainant availed the credit card facility from the OP and OP issued Credit Card No. 4090310000125100. OP bank was under an obligation to ensure absolute security of the complainant’s account. On 23.11.2012, within 27 minutes, complainant’s credit card was fraudulently misused by some one for various purchases, online, and goods delivered at Chennai, Tamil Nadu. The complainant has no nexus whatsoever with Chennai, or with the telephone number and address mentioned as that of the receiver of the goods under the said fraudulent transaction of purchases.
It is stated that the said transactions worth of Rs.36,158/- were immediately reported by the complainant to the OP bank with a request to reverse the debit made in the complainant’s credit card account. The said intimation was made by the telephone within 30 minutes of receiving intimation regarding the misuse to the OP on 23.11.2012 and also sent a letter dated 24.11.2012 and sent a fax message dated 25.11.2012 and also sent an email dated 26.11.2012 to the OP bank. OP bank duly acknowledged the fact about the said fraudulent misuse of the complainant’s credit card and reversed the debit of complainant’s account for the sum of Rs.36,158/-. Thereafter, to the utmost shock of the complainant, the OP bank unilaterally debited the complainant’s credit card account for the aforesaid sum of fraudulent transaction done by misuse of the complainant’s credit card issued by the bank. The bank neither issued any prior intimation to the complainant in this regard nor gave him an opportunity of hearing. That the aforesaid conduct on the part of the OP bank amounts to gross deficiency in service towards the complainant who has been put to such a huge loss and damage for no fault of his own only due to the lapses, latches & deficiency in service on the part of the OP bank. Due to the said illegal pilfering of the complainant’s credit card, he and his wife are suffering tremendous tension and trauma. The complainant sent various emails but no reply was received from the OP. Hence, pleading deficiency in service on the part of the OP, the complainant has prayed for the following reliefs:-
- To direct the OP to make payment to the complainant in the sum of Rs.36,158/- and/ or to give credit of the said amount by reversing the debit entry in the complainant’s credit card account, in respect of Credit Card No. 4090310000125100.
- To direct the OP to pay a sum of Rupees two lakhs to the complainant as damages and loss for extreme mental, emotional, physical trauma & agony caused to the complainant due to the aforesaid deficiency in service towards him by the OP.
OP in reply has inter-alia stated that on 23.11.2012, the credit card in question was used for online trading for a sum of Rs. 19,300/-, Rs.230/-, Rs.250/- & Rs.16,370/- (totalling to Rs.36,166/-) at the site of four merchants, namely, BIGSHOESBAZAR/YEBHI.COM, MAYNTRA.COM, MYNTRA.COM & OMNIPRESENT RETAIL. Thereafter, the complainant informed the OP bank regarding the fraudulent transactions. On receipt of complaint, OP initiated the charge back claim on 06.12.2012 (this is the procedure where card issuer bank after getting claim from card holder immediately credit the disputed claim amount in the credit card). By the said procedure OP on 21.12.2012 credited the disputed transaction amount in the credit card account of complainant. It is submitted that “on the claim of opposite party bank, VISA, being a regularity authority having rights to reverse the charge back entry subsequently, if merchant claims back the amount with proof of transaction and the same is called re presentment. In the present case, re presentation by the merchant, through the acquirer bank i.e. AXIS Bank & ICICI Bank on 11.01.2013 & 16.01.2013. Due to re presentation by the merchant claim of opposite party bank was rejected for charge back”. Thereafter, OP submitted that the pre arbitration review request with VISA on 24.01.2013 & 02.02.2013, but it was also declined by VISA, reason being the transaction was authenticated by the secure password by using CVV2 & VBV which is only known to the card holder. It is submitted that the complaint is an abuse of process of law with ulterior motive of defrauding the OP. Denying any deficiency on its part OP has prayed for dismissal of the complaint.
Complainant has filed rejoinder. It is inter-alia stated as under:-
“19. There is weakness in the Credit Card Banking System being operated by the bank. The bank is obliged to keep the details of the complainant secure and ensure absolute security of the account. However, the account details of the complainant have been compromised by the bank.
20. The bank did not provide adequate security measures so as to avoid fraudulent use of the credit card. They did not have One Time Password (OTP) being sent on the mobile of the Card Holder, prior to an on line transaction being processed by Syndicate Bank or Visa. Nor did the Credit Card have the pin facility.”
It is further stated as hereunder:-
“21. The order was placed on 23/24 Nov 12 and delivery done on 08 Dec 12 i.e. after 15 days. From day one, the complainant kept telling the bank to stop the transactions and delivery of the items. The bank had 15 days to stop the fraudulent transactions and delivery of the items; even if Syndicate Bank had to tell Visa to stop the transactions. However, they took no action to do the same nor did they have the case investigated.”
Complainant has filed his own affidavit in evidence.
Right of OP to file evidence has been closed vide order dated 19.02.2016.
Complainant has not filed written arguments. Written arguments have been filed on behalf of the OP.
We have heard the arguments on behalf of the parties and have also gone through the file very carefully.
A circular bearing No.RBI/2017-18/15 DBR.No.Leg.BC.78/ 09.07.005/2017-18 dated 06.07.2017 on the subject “Customer Protection- Limiting Liability of Customers in Unauthorised Electronic Banking Transactions” has been filed on behalf of the Complainant. This circular has been issued with referent to RBI’s Circular DBOD.leg.BC. 86/09.07/2001-02 dated 080.04.2002. The relevant portions of the same are reproduced hereunder:-
“Reporting of unauthorised transactions by customers to banks
5. Banks must ask their customers to mandatorily register for SMS alerts and wherever available register for e-mails alerts, for electronic banking transactions. The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered. The customers must be advised to notify their bank of any unauthorized electronic banking transaction at the earliest after the occurrence of such transaction, and informed that the longer the time taken to notify the bank, the higher will be the risk of loss to the bank/customer. To facilitate this, banks must provide customers with 24 x 7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, IVR, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorized transactions that have been taken place and/or loss or theft of payment instrument such as card, etc. Banks shall also enable customers to instantly respond by “Reply” to the SMS and e-mail alerts and the customers should not be required to search for a web page or an e-mail address to notify the objection, if any. Further, a direct link for lodging the complaints, with specific option to report unauthorized electronic transactions shall be provided by the banks on home page of their website. The loss/ fraud reporting system shall also ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The communication systems used by banks to send alerts and receive their responses thereto must record the time and date of delivery of the message and receipt of customer’s response, if any, to them. This shall be important in determining the extent of a customer’s liability. The banks may not offer facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank. On receipt of report of an unauthorized transaction from the customer, banks must take immediate steps to prevent further unauthorised transactions in the account.
Limited Liability of a Customer
(a) Zero Liability of a Customer
6. A customer’s entitlement to zero liability shall arise where the unauthorised transaction occurs in the following events:
Contributory fraud/negligence/deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).
Third party 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 the three working days of receiving the communication from the bank regarding the unauthorized transaction.
Burden of Proof.
12. The burden of proving customer liability in case of unauthorised electronic banking transaction shall lie on the bank.”
It is, no doubt, true that the date of the circular is 06.07.2017. But this has been issued with reference to Circular dated 08.04.2002.
It is not in dispute that on 23.11.12 credit card in question was used for online trading for a sum of Rs.19300/-, Rs.230/-, Rs.250/- & Rs.16370/- (totalling to Rs.36166/-) at the site of Four merchants, namely, Big Shoes Bazar/Yebhi.com, Mantra.com, Mantra.com & Omnipresent retail and that the complainant had informed the OP about these four fraudulent transactions on the same day i.e. 23.11.2012. The complainant sent a letter dated 24.11.12 to the OP regarding issue of replacement card. We mark the copy as Mark A for the purposes of identification.
Vide this letter (not denied by the OP) the complainant had informed the OP about misuse of his credit card in question on 23.11.2012 (i.e. within three days) for above stated four transactions and that the card in question had been blocked at 22:15 hrs. on 23.11.12, the moment the SMS was received regarding the transactions. Request was also made to reverse the amount. The complainant sent an email dated 25.12.12 to the OP. Correspondence took place between the parties. Copies are marked as Mark B to Mark G for the purposes of identification. The OP has filed the transaction summary as Annexure-A (colly).
From a perusal of these statements, there is every reason to believe that as many as four transactions as stated hereinabove had taken place from Chennai and Tamil Nadu on 23.11.12.
It is evident from the record that on 21.12.12 the OP credited the disputed above said transaction amounts in the credit card account of the complainant but the OP after receiving information from Visa being a Regularity Authority debited it from the complainant’s account without any prior intimation to him which ought not to have been done. OP bank did not adopt a fair procedure and misused the trust displayed by the complainant in it.
In view of the above discussion, we hold the OP bank guilty of deficiency in service, allow the complaint and direct the OP to credit/pay Rs.36,166/- and Rs.15,000/- towards compensation for mental pain and agony till its realization alongwith interest @ 6% per annum from the date of filing of the complaint to the complainant within 30 days from the date of receipt of copy of this order failing which OP shall be liable to pay the said amount of Rs.36166/- alongwith interest @ 9% per annum from the date of filing of complaint till its realization.
Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations. Thereafter file be consigned to record room.
Announced on 09.01.2018.
