There has been a massive surge in customer grievances lately relating to unauthorised transactions resulting in debits to their accounts or cards.
Several bank customers have reported that cash amount from their account were withdrawn, speculating that it could be a malicious attempt were fraudsters stole the ATM pins and other data by fitting skimming devices and preparing clones of the ATM cards (though not verified independently).
A Delhi-based couple became a victim of fraudulent cash transaction message recently. Five back to back cash transactions, and money worth Rs 50,000 was gone in a jiffy. In a similar fashion, fraudsters siphoned off Rs 90,000 from the account of a domestic help in the NCR region. The fraud seem to be happening on random customers’ account. Such instances are being massively reported these days and the date of fraudulent transaction seem to be the first day of the month, usually the pay day.
What to do in case of a fraud?
In case of fraudulent transaction the customer must immediately notify the bank of such a transaction within three working days.
RBI says that if the complaint is made within 3 working days, the customer has Zero liability. But if the complaint is registered within Within 4 to 7 working days, the customer has certain transaction value liability. If the complaint is made beyond 7 working days, the liability will be as per the bank’s Board approved policy.
Maximium liability of a customer for reporting fraud between 4-7 days
Type of Account Maximum liability
BSBD Accounts Rs 5,000
All other SB accounts
• Pre-paid Payment Instruments and Gift Cards
• Current/ Cash Credit/ Overdraft Accounts of MSMEs
• Current Accounts/ Cash Credit/ Overdraft Accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/ limit up to Rs 25 lakh
• Credit cards with limit up to Rs 5 lakh Rs 10,000
• All other Current/ Cash Credit/ Overdraft Accounts
• Credit cards with limit above Rs 5 lakh Rs 25,000
With the increased thrust on financial inclusion and customer protection, the RBI has put in place a mechanism to address customer grievances arising out of physical transactions.
The RBI circular says that banks must ask their customers to mandatorily register for SMS alerts and wherever available register for e-mail 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 unauthorised 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 24×7 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 unauthorised transactions that have 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 unauthorised electronic transactions shall be provided by 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 unauthorised transaction from the customer, banks must take immediate steps to prevent further unauthorised transactions in the account.
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