A 47-year-old entrepreneur from Koramangala, Bengaluru, recently won a case against two private banks in consumer court. As per a TOI report, the case revolved around a fraudulent hacking into his savings account, resulting in a loss of Rs 50,000. Despite promptly reporting the incident, both banks failed to recover his funds.
In its verdict, delivered in August 2023, consumer court ordered the banks to jointly reimburse the entire sum and further compensate the victim with Rs 25,000. An additional Rs 5,000 was awarded to cover his court-related expenses.
The incident dates back to August 27, 2018, when the entrepreneur, Satish TN, who was stationed in Ahmedabad at the time, received SMS notifications on his cellphone. The messages alerted him to three unauthorized transactions totaling Rs 50,000, originating from his account at a private bank branch located in Jayanagar. Satish immediately took swift action by blocking his account with the Jayanagar bank to halt any further unauthorized transactions.
Upon investigation, it was revealed that the pilfered money had been funneled into a bank account opened in his name at the Mumbai branch of another bank, specifically in the area of Parel. The inquiry identified the perpetrator as an individual based in Manipur who had orchestrated the unauthorized transfer. According to guidelines set forth by the Reserve Bank of India (RBI), in cases of online account breaches, a bank is obligated to conduct an investigation and return the sum to the victim if a formal complaint is lodged within three days.
Despite adhering to the regulatory procedure, both banks involved failed to take adequate remedial measures. Frustrated by the banks’ inaction, Satish decided to escalate the matter. In October 2020, he filed a formal complaint with the Bangalore Urban 2nd additional district consumer disputes redressal commission in Shantinagar.
As the litigation unfolded, the legal representatives of the banks contended that the complaint was not maintainable and ought to be dismissed. The bank’s attorney argued that all three transactions had been carried out legitimately, with the customer’s registered mobile number, by generating one-time passwords (OTPs). Therefore, they asserted that these transactions could not be considered illegal. Similarly, the lawyer for the second bank argued that the individual who established the Mumbai bank account in Satish’s name had opted for an online account opening process, which did not necessitate a full Know Your Customer (KYC) verification or the physical presence of the customer.Finally, on August 30, 2023, the court rendered its verdict, noting the banks’ failure to take timely and necessary action. The court ruled in favor of the customer, ordering both banks to jointly refund the entire Rs 50,000 to him. Additionally, they were directed to compensate him with Rs 25,000 to alleviate the distress caused by the ordeal and to reimburse Rs 5,000 for his court-related expenses. All payments are to be made within a 60-day timeframe.
