For victims of cyber fraud, redress is an unhill task

Although RBI guidelines stipulate provision of multiple channels for reporting fraud, victims say they never get immediate response

Banks issue frequent advisories to customers either through SMS or e-mail creating awareness about online fraud.

Chandrasekar of West Mambalam, who lost ₹86,000 recently when a cyber fraudster withdrew money from his account, had a traumatic experience while trying to get the transaction reversed by the bank. He said: “I never shared any credentials with anyone over phone or any other electronic mode. I was shocked to receive an SMS stating that money was withdrawn from my account. Later, I had a harrowing experience with the bank staff.”

RBI guidelines say the customers must be advised to notify their bank of any unauthorised electronic transaction at the earliest. The customer should be made aware that the longer the time taken to notify the bank, the greater is the risk of loss.

Banks must provide customers with 24x7 access through multiple channels (via website, phone banking, SMS, e-mail, IVR, a dedicated toll-free helpline, and reporting to home branch) for reporting unauthorised transactions or theft of card.

The home page of the bank’s website should have a direct link for lodging the complaint, with a specific option to report unauthorised transaction.

“The loss/fraud reporting system shall ensure that immediate response (including auto response) is sent to customers acknowledging the complaint along with the registered complaint number,” the guidelines said.

Frustrating for victim

“My card details were stolen and amount debited without me getting any OTP. The bank should follow the practice of confirming with the cardholders.

“It was difficult to get the card blocked and I had to run from pillar to post. In panic, I tried to call customer relations staff through phone banking. The process is frustrating. Ultimately, you will never reach the right person over the phone to get the card blocked,” Mr. Chandrasekar said.

A pediatrician in Anna Nagar, who lost ₹90,000 recently, had a similar experience while trying to get the fraudulent online transaction reversed.

He said: “The helplines of the bank did not work. I went to the bank to complain about the transaction. The staff were clueless on how to freeze the account and prevent further withdrawal. They told me to get an FIR first. By the time I got an FIR from the police, the fraudster could have swindled all the money. I managed to reach the police in time to lodge a complaint and got back my money.”

However, the officers of the bank fraud wing and cyber crime wing shared tales of victims who went to complain to the bank after losing their money.

A police officer said: “It is the responsibility of the bank to charge back if a request from a customer is genuine. In most cases, they pass the buck saying that it is not possible and ask the victim to get an FIR. The person at the counter does not know how to redress the grievance of customers who lose money or what the rules say or the available charge back option. There is no one-stop solution to settle the dispute. Sometimes, we have to insist with the bank staff to follow the rules.”

Staff shortage

C.P. Krishnan, joint secretary of Bank Employees’ Federation of India, admitted to loopholes in the system and said it was the responsibility of top management to train the staff in technology and legal provisions.

“The staff strength has been drastically reduced in public sector banks: only four persons work in places where at least 10 persons worked earlier. The staff are overburdened with handling third party products. The system is so vulnerable since the banks outsource all their work and some of them engage apprentices in clerical cadre. They are not accountable. So, we insist upon the managements to train the staff to handle complaints from customers on financial frauds expeditiously so that they can get the money back,” Mr. Krishnan said.

Regular alerts

“Banks issue frequent advisories to customers either through SMS or e-mail creating awareness on the frauds, besides the police awareness generation activities. All bank branches display boards on where to lodge complaints in their head offices. If a complaint is lodged with them, action is taken immediately. When action is not taken, a complaint can be sent to the banking ombudsman. There is a huge staff shortage in public sector banks,” he said.

“Earlier, there used to be a series of training conducted to the new recruits in the banks. Now, such a training is not given,” said Thomas Franco, former general secretary of the All India Bank Officers’ Confederation.