SBI Directed To Pay Rs 50,010 To Advocate In Unauthorised Transaction Case

A Delhi consumer commission has directed the State Bank of India (SBI) to pay Rs 50,010 to an advocate who lost money in two unauthorised transactions after downloading a mobile app on the pretext of updating his mobile connection’s KYC details.

The commission has found that the customer had not shared the one-time password (OTP) required for the transactions and had promptly reported the fraud. It has also noted that a Rs 35,000 transaction took place after he had blocked his debit card and disabled UPI services.

Advocate Lost Money In KYC Update Scam

The advocate, who held a savings account at SBI’s Tis Hazari Court branch, received a message on September 8, 2021, claiming that his mobile KYC had expired. He subsequently received a call from the same number.

The caller asked him to download an application from the Play Store and pay Rs 10 to update his KYC details. Trusting the caller, the advocate installed the app, entered the requested information and made the payment.

He then received an OTP for a Rs 35,000 transaction. As he had not approved the payment, he did not share the OTP. He uninstalled the app and disconnected his internet connection.

When he contacted SBI’s toll-free number, he discovered that Rs 10 and Rs 35,000 had been debited from his account. He also reported the unauthorised transactions and blocked his ATM card and UPI services at the earliest.

Although bank officials initially stated that the money would be returned, they rejected his claim in January 2022, because the transactions were authenticated through an OTP sent to his registered mobile number. It also argued that the customer had downloaded the third-party app himself.

The advocate then approached the consumer commission seeking a refund and compensation.

Commission Finds Fault With Bank’s Response

Upon looking into the bank’s transaction records, the commission found that the Rs 35,000 debit was recorded at 7.40 pm, after the customer had blocked his debit card and disabled UPI services.

It has observed that the bank had a duty to stop the unauthorised transaction once it received information about the complaint, and the fact that the customer had not shared any payment credentials, including the OTP.

The order referred to rules under which the bank or payment issuer bears losses arising from unauthorised transactions after the customer reports them. It also noted that SBI had failed to resolve the complaint within the prescribed 90-day period.

The commission directed SBI to refund Rs 35,010 and pay Rs 15,000 as compensation for mental agony and litigation expenses, taking the total payment to Rs 50,010.

What Should Customers Keep In Mind

It is pertinent to report the unauthorised transaction to the authorities as soon as possible. Customers should also notify their bank immediately, and block their debit and credit cards or UPI services if necessary. They should also keep records of their complaints and any communication with the bank.

The judgement does not convey that a bank must compensate for all types of fraudulent transactions, or that the bank cannot reject a fraud claim only because the victim had shared the OTP. The bank must always look at all the facts of the case, and then decide the verdict.