The increase in digital transactions in India has led to a corresponding increase in the number of people losing their money online. The report of the High-Level Committee on ‘Deepening of Digital Payments’, shows that digital payments per capita have increased from 2.38 per annum in March 2014 to 22.42 in March 2019. The rate of online bank fraud has also been following a similar curve.
As per an RBI report, a total of 2,059 cases of cyber fraud were reported in 2017-18 amounting to Rs 109.6 crore while in 2016-17 it was 1,372 amounting to Rs 42.3 crore. As more and more Indians enter the digital payments space, it is becoming increasingly important to have more awareness on issues related to online bank fraud.
There are multiple ways you can lose money online. Some of the most common ways this can happen are:
What can I do about it?
- Phishing: This was made famous by the “Nigerian Prince” email scams. This starts with you getting an email from a person from a foreign country claiming to have a royal title and a lot of money. However, since he is having issues getting the money out of the country, he has chosen you for help, in exchange for a share in the money. All you need to do is to give your bank details or make a small advance payment. Once this is done, the fraudsters will disappear with your money, and also may empty out your bank account.
- Card Skimming: A small electronic machine, called a skimmer is installed in a Point of Sale (POS) machine or an ATM. When you use your card, the skimmer copies information about your card, which helps to steal money from your account. This is easier to do in magnetic strip cards, and is one of the main reasons for the push to upgrade all debit and credit cards to EMV chip cards.
- Vishing: The most common scenario involves someone pretending to call from your bank, already having some of your banking details and asking for your personal banking information. Giving up your personal information can lead to your money being stolen
- Fake Bank Apps: These are android apps which have your banks logo, and an almost similar user interface to the original app. This makes it easy for fraudsters to steal customer information at a large scale and then extract money from their account.
You must notify the bank of any unauthorised transaction at the earliest possible opportunity.
You must not reveal/share payment credentials with any third party. It is the bank’s responsibility to prove that the customer is liable (to whatever degree) in case of unauthorised transactions. Banks may also decide to waive off any customer liability in case of unauthorised electronic banking transactions.
You incur zero liability when:
What are the legal options to complaint?
- There is an unauthorized transaction due to contributory fraud or negligent behaviour by the bank. If you don’t report the unauthorized transaction to the bank, it does not matter because the zero liability occurs whether or not you report it.
- There is a breach but it is not with the customer or bank, but somewhere else in the system. You should notify the bank within three working days of receiving communication about the unauthorized transaction.
Even otherwise, there is a limit on the maximum liability of a customer. The limit varies based on the type of account you have.
In this situation, you have multiple options.
- Lodging a complaint to the Bank: Most banks have staff dedicated to matters like this. The relevant contact details are found on the backside of your card as well as the website of the bank. Telephone numbers of help desks are also displayed at every ATM machine. If you have suffered a loss you must immediately contact the banks via phone (preferable) or email.
- Filing a complaint with the Banking Ombudsman in your jurisdiction: If you are not satisfied with the solution provided by the bank and would like to further enquire the matter, you can approach the Banking Ombudsman established by the Reserve Bank of India under the Banking Ombudsman Scheme, 2006. Each bank is required to display at its branch the details of the Banking Ombudsman under whose jurisdiction the branch falls.
- Filing a complaint with the nearest cyber-crime cell/police station: When you go to the police station to complain about online bank fraud, they will ask you to file an FIR. You can also file an online complaint on the Ministry of Home Affairs’ Online Crime Reporting Portal.
- Filing a case with the relevant consumer forum: The Consumer Forum is present at the District, State and National Levels. You can file a case there depending on 2 factors:
1. The amount of money you lost:
○ District Forum: Upto Rs. 20 Lakhs
○ State Commission: Rs. 20 Lakhs to Rs. 1 Crores
○ National Commission: Exceeding Rs. 1 Crores
2. Where the loss happened :
○ You can file a complaint in the place where the money was lost, or where the opposite party (that is, the bank) carries on their business.
You should approach consumer forums only when you feel that the bank has been negligent, and has not given you proper service.
For general awareness, it would be useful to keep a lookout for guidelines and warnings that RBI keeps releasing on a regular basis. As a customer, it’s also important for you to know about your rights and responsibilities in this situation, as well as the different options that are available for you to complain.
The author is a lawyer working at Nyaaya, an initiative of the Vidhi Centre for Legal Policy. Nyaaya is simplifying Indian laws to help people negotiate legal problems in their daily lives.