 "Safe online banking: The onus is on banks; fight back if they refuse")
Internet has shrunk the world, but it has significantly expanded the world of frauds. Due to increasing instances of frauds, online world has become an unsafe place.
Naturally, as the customer of a bank you expect your bank to provide you a secured environment for your transaction. And, in case of a fraud, you expect your bank to investigate the matter. But there are cases where such expectations belied. Here’s one such.
According to an incident cited in the Reserve Bank of India’s latest report on banking ombudsman, not only did a bank fail to provide secure environment for online transaction, it never even bothered to investigate the matter further. The bank just assumed that the customer was at fault.
This is what happened: A banking customer found that an amount of Rs 1,01,076 was withdrawn from his account fraudulently via net banking. He complaint to the bank. The last time the customer had used net banking service was to book a railway ticket. But, after that 16 transactions were done on his account fraudulently. However, he did not receive a single SMS alert for any of the transactions.
Based on the customer’s complaint, the bank froze his account and informed the police about the incident. The customer wants his funds back, but the bank refused.
The customer finally approached the banking ombudsman. On further investigation, the banking ombudsman found that bank had not investigated the matter.
The bank admitted that and said they believed that unless the customer compromised the password, such transactions could not have taken place. Shocking?
In fact, even the banking ombudsman found such an excuse from the bank’s side pretty surprising. The bank did not investigate the matter for more than a year, and an additional three months even after the customer lodged the complaint with the banking ombudsman.
The ombudsman found that the bank was clearly at fault and ordered it to reverse the entire disputed amount with seven days. The bank did not comply to the banking ombudsman’s order and insisted that without the customer compromising his password such fraudulent transactions cannot happen.
It also came up with another excuse, that since the matter was under police investigation they would not reverse the disputed amount to the customer.
The bank decided to challenge the banking ombudsman’s order and approached the Appellate Authority. However, the authority upheld the ombudsman’s order and stated that the bank had failed to fulfill its primary duty of protecting the interest of the customer. Just because the matter was under police investigation, the bank cannot let the customer be deprived of his rightful money, it said.
What we can learn: First and foremost, it is a bank’s primary responsibility to provide secure environment for online transactions. Secondly, the bank was supposed to send an SMS alret which it clearly did not do. As a customer you can’t really do much if you don’t get SMS alerts about activities on your account. Hence, it is important to ensure you go through your account statement. Thirdly, approach the banking ombudsman and higher authorities whenever there is a high-handedness from the bank’s part. Not many believe such ombudsman work, but it did for the customer mentioned above.