In a significant decision, the District Consumer Dispute Redressal Commission (DCDRC) in Nagpur ordered DBS Bank to refund ₹1,42,763.56 to a customer who was cheated in an online fraud. The commission held the bank responsible for poor service and failing to safeguard the customer’s confidential information, despite the fraud being reported immediately.
Dr. Pradeep Rajderkar, a medical practitioner, had an unused DBS Bank credit card. On June 6, 2023, he received a call from a fraudster posing as a bank representative, asking him to pay an insurance fee for card security. Trusting the caller, he shared three OTPs. Later, he received an email stating his card was blocked, but by then, ₹1,42,763.56 had already been deducted in three unauthorized transactions.
Despite reporting the fraud to the bank and filing a complaint with the Cyber Police, the bank refused to reverse the transactions. He then filed a case under Section 35 of the Consumer Protection Act, 2019, alleging negligence and seeking a refund, compensation for mental distress, and legal costs.
The bank argued that Rajderkar voluntarily shared his OTPs and that it was not liable. However, the court ruled against the bank, citing RBI guidelines on online banking fraud. It found that the complainant had reported the fraud promptly, but the bank failed to act.
The commission ordered the bank to refund the amount with 9% annual interest from June 6, 2023, until payment is made. It also directed the bank to pay ₹20,000 for physical and mental distress and ₹10,000 towards complaint costs. The judgment was passed by DCDRC President Sachin Shimpi, along with members B. B. Chaudhari and Sheetal Petkar.
What RBI guidelines say
According to an RBI circular issued on July 6, 2017, a bank is liable for fraudulent transactions if a customer reports them within three days. A customer has ‘zero liability’ for unauthorized transactions in these cases: If the bank is at fault due to fraud, negligence, or deficiency (even if the customer doesn’t report it) and if a third-party breach occurs (not the bank or customer’s fault), and the customer reports it to the bank within three working days of being notified.
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