The Nagpur District Consumer Disputes Redressal Commission has directed the State Bank of India (SBI) to refund ₹5,00,250 to a customer who lost the amount in a cyber fraud incident. The commission also ordered the bank to pay 9% annual interest and ₹30,000 towards compensation and litigation expenses.
The ruling followed a complaint concerning fraudulent withdrawals from the bank account of Vindhyan Meshram, who alleged that the bank failed to take adequate action after being informed about the unauthorised transactions.
How the Cyber Fraud Took Place
According to the complaint, Meshram had contacted a customer-care number after facing a problem with a product purchased online.
He subsequently received a call from a person who allegedly claimed to be helping him obtain a refund. Following the caller's instructions, Meshram installed an application on his mobile phone.
He later discovered that ₹5,00,250 had been withdrawn through 13 separate transactions. The transaction records reportedly showed various online payment gateways as beneficiaries.
After noticing the withdrawals, Meshram said he immediately contacted SBI, blocked his account and debit card, and approached the police. He also submitted a complaint through the government's cybercrime reporting portal on July 19, 2021.
Customer Alleged Bank Failed to Act Promptly
Representing the complainant, advocate Mahendra Limaye argued that the bank had been informed about the fraudulent transactions shortly after they occurred.
The complaint alleged that SBI failed to conduct an adequate internal review, monitor the suspicious transactions or take effective steps to prevent further movement of the funds.
The complainant also questioned whether the bank's transaction-monitoring and velocity-check mechanisms had adequately identified the unusual activity.
According to the complaint, the bank should have attempted to trace the transactions and identify the accounts or payment channels that received the money.
SBI Disputed Liability
SBI denied responsibility for the loss and argued that the customer had shared his OTP and had not exercised sufficient caution while carrying out the transaction.
The bank's position was considered by the consumer commission before it reached its decision.
The commission, however, did not accept the bank's defence. It observed that the circumstances indicated that the OTP and other information had been obtained fraudulently by a third party rather than being deliberately disclosed by the complainant.
Commission Finds Deficiency in Banking Service
A key factor considered by the commission was the timing of the complaint.
Meshram had reportedly informed the bank within 24 hours of discovering the fraudulent withdrawals. He also supplied details of the amounts debited and requested that the transactions be reversed.
The commission concluded that the bank had not taken the necessary precautionary measures or appropriate action after receiving information about the suspected fraud.
It therefore held SBI's Tumsar branch deficient in service under the Consumer Protection Act, 2019.
SBI Ordered to Refund ₹5,00,250 With Interest
The commission directed SBI to pay the complainant:
- ₹5,00,250 as the amount lost through the disputed transactions
- 9% annual interest calculated from July 18, 2021
- ₹30,000 towards compensation and litigation expenses
The decision highlights the importance of timely customer complaints as well as effective monitoring systems for detecting unusual banking transactions.
What the Case Means for Cyber Fraud Victims
The ruling also draws attention to the financial trail that follows a cyber fraud. Once suspicious transactions are reported, identifying the movement of money, beneficiary accounts and transaction patterns can become important parts of an investigation.
A properly conducted Financial Investigation can help examine suspicious transactions, reconstruct the movement of funds and identify potential links between different accounts or payment channels.
For customers, the case also reinforces the importance of immediately notifying their bank, blocking compromised banking instruments and reporting suspected cyber fraud through the appropriate authorities.
The commission's order is specific to the facts and evidence considered in this consumer dispute, while the broader investigation into cyber fraud remains subject to the relevant authorities and legal processes.