Digital fraud crackdown: In a first, consumer panel sends notices to banks, highlights breach of RBI norms

According to an order dated March 3 and a subsequent order on July 7, the Commission admitted petitions filed by several digital arrest victims.

Digital arrest cases have now reached the doorstep of the National Consumer Disputes Redressal Commission (NCDRC), an Indian Express report said on Monday.

For the first time, a group of banks has received notices from the NCDRC, which has flagged “deficiencies in service” in cases where victims have fallen prey to digital arrest frauds, the report added.

According to an order dated March 3 and a subsequent order on July 7, the Commission admitted petitions filed by several digital arrest victims.

The banks’ responses were heard by a bench comprising the Commission’s President, Justice (retired) AP Sahi, and member Bharatkumar Pandya.

The bench has also said that if it concludes the complaints are “maintainable” before the Commission, it would consider seeking assistance from central government agencies, including the Financial Intelligence Unit (FIU) and the Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs.

Two of the petitions, filed by digital arrest victims from Gurugram — who lost Rs 10.30 crore and Rs 5.85 crore respectively — have been clubbed together by the NCDRC. A third petition from a Mumbai-based victim will be taken up during the next hearing scheduled for November 14.

Mahendra Limaye, the lawyer representing all three victims, said the Mumbai complainant had lost Rs 5.88 crore in a digital arrest incident last year.

Banks that have received notices — and many of whom were represented during the July 7 hearing — include ICICI Bank, HDFC Bank, UCO Bank, Federal Bank, Sreenivasa Padmavathi Bank, Yes Bank, State Bank of India, and Kotak Mahindra Bank.

The case of the Gurugram victim who lost Rs 5.85 crore revealed how fraudsters routed money from her account through 141 bank accounts across the country in three layers of transactions. The funds were siphoned off within seconds or minutes of each transfer. The Commission was also informed that a single fictitious or mule account was used for multiple cyber frauds.