Thread by @BiIndia

#Banks are not liable to cough up payments if you have been a victim of fraud or scams

businessinsider.in/finance/banks/…

By @pabsgill

@pabsgill If you have been a victim of a bank fraud or somebody has scammed money out of your bank account, the bank is not liable to compensate you for your loss, according to a consumer court in Gujarat.

#Banks

@pabsgill The Consumer Dispute Redressal Commission in Amreli denied compensation of a victim of fraud who got duped of ₹41,500. The court believes that the fraud occurred due to the individual’s own negligence, alleviating any responsibility on the art of the bank.

#Banks

@pabsgill However, in the past, the National Consumer Disputes Redressal Commission (NCDRC) held that banks are liable to pay its customers in cases of unauthorised transactions. According to the court, the bank cannot rely on arbitrary terms & conditions to ‘wriggle out’ of its liability.

@pabsgill Even as per the Reserve Bank of India (#RBI), if the transaction happens due to a third party breach — by someone other than the bank or the customer — and the customer notifies the bank within three working days, then the customer is not responsible in any way.

👉 How did the fraud occur?

Kurji Javia, a retired teacher who now practices law, was called by someone posing as a State Bank of India manager on 2 April 2018. The scamster asked for Javia’s ATM card details, which he gave assuming that he was speaking to a figure of authority.

Next day, when ₹39,358 of pension was deposited in Javia’s account, another ₹41,500 was simultaneously withdrawn. On spotting the transactions, he called the bank but did not receive any response. It was later revealed that the fraudsters used the money to go online shopping.

👉Is the bank responsible?

The consumer court asserted that banks give customers ample warning to not share their ATM card details or bank account details with anyone.

According to the court, Javia did exactly what the banks advised customers not to do. He did not follow any of the guidelines for safe transactions by the bank, which means negligence was not on part of the banks.