Bank of India Vs ATM Customers
If you are a Bank of India customer in India and have
an ATM card, it is time to consider returning the ATM card to the Bank
immediately since the Bank is exhibiting a noticeably dangerous anti
customer stance related to Fraudulent ATM transactions.
Recently a customer of Bank of India in Bangalore, found that there were
many unknown debits in his Savings Bank account. He complained to the
branch. Branch told him that the disputed debits represent withdrawals
made in an ATM of Canara Bank. Customer disputed the fact and showed the
Bank that he is very much in possession of the card and he does not know
how the disputed transactions arose.
Customer filed a complaint with the Police who not being able to
undetstand the nature of the fraud have not progressed beyond
registering an FIR. In the meantime the customer approached the Banking
Ombudsman at Bangalore with his complaint.
The Bank has obtained a transaction report from Canara Bank about the
ATM debits and informed the Banking Ombudsman that as per the statement
of transactions it was the customer’s ATM card that has been used for
the withdrawal and there ends all discussions. Canara Bank stated that
they did not have any CCTV footage of the withdrawal and the same was
communicated to the Ombudsman who promptly closed the case and suggested
the customer to approach other appropriate forums for redressal of his
grievance.
In this case, though Canara Bank is also at fault, since it is an agent
of Bank of India, the responsibility in this case falls on Bank of
India. However Canara Bank through its negligence and Bank of India
through its apathy are expecting the customer who is a senior citizen
absorb the loss of Rs 40600/- which he had saved for his wife’s eye
operation and was unable to access in time.
The Bank has now two options. One is to accept that the transactions
were fraudulent in which case there is no reason why they should not
bear the responsibility as there is clear indication that a cloned card
was perhaps used in the transaction. Second is to refuse to admit that
it is a fraudulent transaction and hold that only the customer’s genuine
card was used for the transactions. In such a case the Bank is implying
that the Customer is telling a lie and trying to cheat the Bank.
While the Bank can make up its mind in this matter, What this incident
indicates is that no customer having an ATM card is safe with Bank of
India. It is possible that some fraudster who might have cloned your
card by using a skimmer in one of the ATMs or obtaining the information
in some other manner from the Bank or by tampering with the software of
an ATM of any Bank can draw away your money.
Recently the Damodar Committee on Customer Service in Bank commissioned
by RBI has stated that “Customers should be put on a Zero Liability
protection” in respect of ATM and Internet transactions and even when
there is a dispute Bank should immediately make good the amount
provisionally.
Unfortunately, Bank of India appears to be challenging the Reserve Bank
of India in this respect and it is the turn of Reserve Bank of India now
to assert its regulatory authority and ensure that its guidelines are
followed.
In the meantime I would like to draw the attention of the Chairmen of
Bank of India and Canara Bank and request them to provide their answers
to the following.
1. Why did Canara Bank not have the CCTV in the particular ATM (Bommasandra-ATM
D 08880058) when the RBI security guidelines and the Bank’s own
commitment under the Banking Codes and Standards Board of India Code 0f
Customer Service provides that CCTV surveillance is required for ATMs?
2. When Bank of India authorises an ATM of another Bank like Canara Bank
is it not the responsibility of Bank of India that its customer’s
security interests are protected and only secure ATMs are allowed to be
used in such transactions?
3. If in this instance Canara Bank was at fault in not having CCTV
surveillance, why did Bank of India failed to claim the loss from Canara
Bank instead of refusing the customer’s request for reversal of
unauthorised transactions?
4. Does this not indicate that Bank of India and Canara Bank are in
collusion with each other and maintaining a sub standard ATM payment
system and making customers pay for their negligence?
5. Though Bank of India had admitted that the transactions were
unauthorized and reversed one of the several transactions and Canara
Bank had admitted that they were not maintaining CCTV in the particular
ATM, how could the Banks persuade the Banking Ombudsman, Bangalore that
neither of them were at fault?
5. How was Bank of India able to convince the Banking Ombudsman
Bangalore that he should not provide a hearing to the complainant or
organize a joint meeting for mediation as required under the Banking
Ombudsman scheme but instead proceed to give his decision?
6. How was Bank of India able to convince the Banking Ombudsman
Bangalore that he should reject the complaint under such ground as to
deny him an opprotunity to appeal and also ensure that the Bankign
Ombudsman would add that direction in his order itself?
7. How many more such ATM fraud incidents have been found in Bank of
India to make it worthwhile for the Bank try challenging the customer in
this case for a paltry Rs 40600/- and open itself to risks of being
challenged under other forums where the issue of criminal liability of
the Bank officials would also come up besides the civil liabilities?
8. Are both Bank of India and Canara Bank ready to be challenged by
their shareholders on the long term consequences of running an insecure
Banking platform and defending their inefficiency through litigation
against its own customers?
9. Will Bank of India now make a disclosure to all its customers in
which they
a) inform them that even when they are in
physical posession of the ATM cards, it is possible for their
accounts to be accessed unauthorisedly from ATMs of various Banks
b) inform them that they will be liable for all such transactions
where the Bank finds that the unique number of the customer’s credit
card is reported by the ATM whether the customer owns the
transaction or not.
c) warn them that if any Customer objects such debits he will be
deemed to be making an attempt to cheat the Bank by himself
withdrawing the money and claiming to be victim and appropriate
legal action may be initiated against him.
d) seek the consent of the customers for such a disclosure or give
them an option to return the ATM cards forthwith.
I hope I will be able to get answers to these
questions from both the Banks.
Naavi
August 13, 2011
Comments are Welcome at
naavi@vsnl.com
