Victim of ATM fraud? Banks liable to pay you

Inaction in a case of an ATM fraud which had caused loss to a consumer has led to two banks being asked to cough up Rs25,000 as compensation. In his order, the principal secretary of the state information technology (IT) department, who is the adjudicating officer under the Information Technology Act, 2000, also pointed out that ATM centres are supposed to be either guarded well or under good CCTV coverage.

"I have gone through the internet websites indicating protection offered by various banks abroad to their customers who use electronic channels to conduct transactions. Most of the banks in USA and other developed countries INSURE their customers against online/ ATM frauds, etc beyond a liability of 50 dollars.... On similar lines, recently in January 2014, Banking Codes and Standard Board of India (BCSBI) unit has issued "Code of Bank's Commitment" where in customers of such fraud will only be liable to the extent of Rs10,000 only and the bank has to make good the rest of the amount, but acceptance of this code by banks is not visible (sic)," said principal secretary Rajesh Aggarwal in his recent order in a case.

Sudhanshu Karna had a savings account with the Punjab National Bank (PNB) since May 2010 and held a debit card issued by the bank. In March 2013, an amount of Rs25,000 was fraudulently withdrawn through three ATM transactions from ICICI (two withdrawals of Rs10,000 each) and Bank of Baroda (BoB) ATMs in Kharghar. The complainant raised the issue with PNB immediately but said he did not get a proper response. He also registered a complaint with the DCP of the cyber cell.

However, in its arguments, PNB claimed that while Karna had raised the issue of disputed transactions using the add on card, as per his account statement, about seven transactions had been done between July 13, 2011 and March 13, 2013, using it. "...it is evident that (the) complainant was using add on card regularly and his claim that he has never been issued and used add on card... is not justifiable. Complainant has never objected for the transactions made through this card prior to March 13, 2013," it claimed. ICICI Bank said it had no data regarding fraudulent transactions as the only evidence regarding the ATM machines was CCTV footage which was available for only six months. BoB said it had taken up the matter with the concerned ATM company and other departments for doing the needful.

The police said the CCTV footage of the fraudulent transactions was unclear and hence of no use. The PNB had also not responded to the investigating officer's email.

In his order, Aggarwal said that PNB "has not given any meaningful report from its Fraud Investigation Unit, mandated by RBI guidelines. Also, the investigation officer has reported that the bank is not replying to their emails and not co-operating in the investigations."

He also indicted ICICI Bank and BoB for adopting a "very casual attitude." "Though the PNB had intimated them about the ATM fraud within two months, they took no steps to do internal investigations and see the CCTV footage. Also as per police report, later on, the footage was made available, but it is of such poor quality that it is of no use. ATM centres are supposed to be either guarded well or (kept) under good CCTV coverage. Their omissions fall within the ambit of Section 43 A of the IT Act," noted Aggarwal.

He ordered ICICI bank to pay damages of Rs20,000 and BoB to cough up Rs5,000 as compensation to the complainant within a month of the order, failing which compound interest of 12% compounded monthly will also be chargeable. However, the complainant had sought damages of Rs40,000.

Cyber scare on the rise
According to the CID's 'Crime in Maharashtra- 2013' report, a total of 907 cyber crime cases have been registered under the Indian Penal Code (IPC) and the Information Technology (IT) Acts in which 603 have been arrested. Out of these 907 cases, motives in 133 are related to greed or money and 210 pertain to fraud and illegal gain. This is a rise from 561 cases under the two acts in 2012 which saw 407 arrests.
In 2013, under the IT Act, 681 offences have been registered, with Pune city accounting for maximum cases (97), followed by Yavatmal (61), Thane city (52), Aurangabad (47), Mumbai city (40) and Navi Mumbai (31). A total of 226 cases have been registered under the IPC in 2013 in which 177 accused have been arrested.