District Consumer Disputes Redressal Commission, Pudukkottai CC. 08 / 2019

Tamilamuthan  … Complainant

Vs 

The Manager 

Bank of India 

Pudukkottai          …  First Opposite Party 

&

The Zonal Manager 

Bank of India 

Coimbatore           … Second Opposite Party

In March this year, the District Consumer Redressal Commission, Pudukottai passed an order based on documentary evidence that the Bank was responsible for deficiency in service with regard to an online internet banking fraud of its customer. A look at the details of the case / judgment. 

Facts of the case

1. In February 2014, the complainant (“Tamilamuthan”), a student opened a savings Bank account (“SB account”) in the Bank of India (“bank”) with his father as the guardian of the account. The father, a milk vendor deposited money in the SB account to meet his son’s educational expenses.
2. On becoming a major after attaining 18 years of age, Tamilamuthan applied to the Bank for ATM card in 2017. The bank issued the same and sent the card and details of the PIN to Tamilamuthan. However, he did not even open the letter containing the PIN details and hence never used the ATM card.
3. On 7th June 2017, it was detected that a total sum of Rs. 14,998/- was withdrawn in instalments by third parties through fraudulent means. On noticing the withdrawals from the bank passbook, Tamilamuthan’s father immediately complained to the Bank. A couple of days later, he also lodged a complaint with the superintendent of police. However, no action was taken either by the bank or the police. In July 2017 Tamilamuthan, on return after completing his education, also lodged a complaint with other authorities – higher officials and ombudsman. Yet no action was taken.
4. Tamilamuthan and his father sent a legal notice to the Bank on 17th December 2018. The Bank replied to the Notice with false information. Hence Tamilamuthan approached the District Consumer dispute redressal commission, Pudukkottai for redressal of grievance.

Submission(s)
Complainant (Tamilamuthan)

1. The Manager and the Zonal manager are the controlling authorities of the Bank / branch. There was carelessness and deficiency in rendering service on the part of the Bank / branch as there was no action taken or relief provided when complaint was lodged.
2. The Bank should compensate the amount lost in addition to mental agony, litigation and other expenses.

Respondent (Bank)

1. The fact of withdrawal of funds from the account is routinely made known to the customers through SMS alert message(s). It is incorrect to say that Tamilamuthan / father came to know of the fraudulent withdrawal of funds only after taking print of the bank passbook.
2. On receipt of complaint, the Bank immediately forwarded the same to the New India Assurance company through its general operations department. The Bank followed up at appropriate levels. The matter was pending in the insurance company for settlement.
3. The Bank continuously informs all its customers through various channels not to share confidential information such as details of ATM card, PIN etc. Such fraudulent activities happen frequently due to innocence and negligence by the customers.
4. The Bank cannot be held liable for deficiency in rendering service as it has taken up the matter with the insurance company and the amount will be settled for the customer by the insurance company.

Analysis / Judgment
On analysis of the material evidence submitted, the Commission held that: 

1. The ATM card was not signed on the reverse by the customer and hence it was not activated. Consequently, it could not be used in any ATM machine.
2. The letter containing secret PIN details from the Bank was not even opened by Tamilamuthan. It is evident that the ATM debit card was never used by him. In fact, he never withdrew money from his account from the date of opening the account, till the fraudulent transactions happened.
3. Tamilamuthan did admit that he received SMS alert messages for the fraudulent amounts withdrawn. He further stated that he did not get any OTP message on his phone and also that he did not share his account details with anyone.
4. The account statement clearly mentioned that the fraudulent withdrawals happened through “IDEAMONEY” a digital payments platform which uses mobile banking. This platform allows merchants to initiate receipt of payments by sending an OTP to their mobile numbers. Customers have to provide the OTP to the merchant. It is clear that the transaction was not initiated by Tamilamuthan. It was initiated by a third party who used this platform. Tamilamuthan clearly stated that he did not receive any OTP on his mobile number. Hence, he could not have initiated these transactions.
5. The amounts fraudulently withdrawn were recorded as “BDIPG”. As per the codes of the Bank, this meant that the transactions were done through internet banking. Hence it was evident that the ATM card was not used for withdrawing the funds fraudulently. It is clear that Tamilamuthan did not have any internet banking facility for his account. Hence, he had no role in these transactions.
6. The Bank did not offer an explanation to Tamilamuthan about how the money was taken from his account even after tracking the third party who took the money fraudulently. Instead, the Bank took up the issue with New India Assurance / third party that took money from Tamilamuthan’s account and was negotiating a settlement. Even after 4 years after lodging a complaint for a sum of Rs. 14,998/- no money was deposited to the customer even with the knowledge of who took the money fraudulently.

Based on the above, the Commission held the bank liable for deficiency in rendering service and directed the manager, zonal manager to pay a sum of Rs. 25,000 for deficiency service in addition to refunding the Rs. 14,998/- with interest from the date of complaint till the date of this order besides compensation for mental agony, litigation and other expense within the time stipulated in the order.