Debit Card Blocked Without Notice? Consumer Court Orders Bank To Pay Rs 1.25 Lakh

The Ernakulam District Consumer Disputes Redressal Commission in Kerala has directed Federal Bank to pay Rs 1.25 lakh in compensation to a customer for blocking his international debit card without informing him. The commission held that because the bank failed to communicate the card blocking, the customer and his family had to face difficulties. They were left stranded at Kuwait International Airport despite having sufficient money in their account.

The commission, comprising President D B Binu and members V Ramachandran and Sreevidhia T N, found the bank guilty of deficiency in service and unfair trade practice. They observed that the bank has not only blocked the card without informing the customer but also did not confirm with the customer whether he had received the replacement card before travelling, per the Times of India report.

Customer Left Stranded Abroad

The customer, who had maintained an account with the bank since 2015, held an international Debit Card, which offered benefits, such as higher transaction limits and complimentary access to airport lounges. As he depended on the card during his travel abroad, he did not carry cash while travelling from Kuwait to Kochi in September 2021.

When he used the card to access the airport lounge at Kuwait International Airport, it showed a transaction failure. He tried using it at the shops, but again received the transaction failure message. Due to this, he could not buy even food and drinking water at the airport for his family. Even after landing in Kochi, the card transactions still showed invalid when he tried using it at the duty-free shop and the ATM.

Bank's Explanation Fails To Convince

The bank explained that it blocked the card after getting an alert from Mastercard about a possible data compromise. However, a replacement card was issued to the customer, and an SMS notification was also sent to him, which was not delivered due to technical reasons.

However, the commission was not convinced by this reply. It observed inconsistencies in the bank’s records regarding the Mastercard alert dates and the issuance of the replacement card. It further found that while the customer and his family were stranded at the airport, the replacement card remained lying at the branch.

Compensation Awarded To Customer

The Commission noted that while the bank tried to protect the customer from potential fraud, it failed in its basic responsibility to keep him informed. This caused distress to the customer and his family because they were unable to access their money despite having sufficient funds.

It directed the bank to pay Rs 1 lakh as compensation for mental agony, hardship and trauma suffered by his family and Rs 25,000 towards litigation costs within 45 days and 9 per cent interest per annum for any delay beyond 45 days.