The National Consumer Disputes Redressal Commission (NCDRC) held that the banks must compensate account holders if customers lose money due to online fraud.
The complainant Jesna Jose, purchased a Pre-paid Forex Plus Debit Card having a limit of US$ 10,000, from the Manager of the HDFC Bank. She said she procured the card in 2007 and the fraud took place in 2008. The commission rejected the bank’s claim that the woman had not taken care of the card and hence was liable for the fraud.
According to the RBI report, who will bear the loss will be decided by whose fault it is. If there is negligence or mistake on the part of the bank, then the entire loss will be borne by the bank.
On the other hand, if the fraud is due to the negligence of the customer, then the customer will have to suffer the loss. In a situation where it is neither the fault of the customer nor the fault of the bank, then if the customer lodges a complaint with the bank within 3 working days of the fraud, then the customer will not be responsible for the fraud.
The Commission consisting of Presiding Member C. Viswanath blamed the bank for a mistake within their system while passing the judgment in one of the cases in which the victim alleged that the money was withdrawn from her account by a hacker. The victim believed that the hacking was done due to a mistake in the bank’s electronic banking system.
The NCDRC stated that in a case where the Bank has been unable to prove that the impugned fraudulent transaction had taken place due to account holder’s fault, for example loss of credit card, the Bank shall be made liable for the unauthorized transactions, as it is deemed that there was a security lapse in the electronic banking system through which the transactions had taken place.
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