Rights of a banking consumer in case of a credit/debit card fraud

With the increase in the number of credit and debit card transactions, there has been a substantial increase in the number of fraudulent card transactions too. As per RBI data, banks in India reported close to 27614 and 3835 cases of credit- and debit-card related frauds between April 2011 and September 2014. There were additional 2000 cases of internet-banking fraud in that same period. So, how do these frauds happen? Fraudsters initiate the card fraud by duplicating your card at ATMs (skimming) or point of sale (POS) terminals or by securing your customer details through e-mails (phishing) or over the phone (vishing).

So, what should you do if you notice an unauthorised transaction on your credit card or debit card?

Inform the bank

The first thing that you must do is to report the transaction(s) to your bank. Call the customer care of your bank and get your card blocked as soon as possible. You can also send an e-mail to your bank reporting the fraudulent transaction and they would, in turn, send an e-mail to you confirming that your card has been blocked. Many banks also let their customers block their cards through their website or by sending an SMS.

If you do not report the disputed transaction within the time stipulated by your bank, it will mean that you have accepted that transaction and the bank will not be able to reverse it later.

• Your liabilities if the fraud occurred before you received your card

You will not be responsible for any fraudulent transactions that took place before you received your card or PIN or internet banking password. You will not be liable for any loss caused by the fraudulent or negligent conduct of any employee(s), agent(s) or other parties involved in the electronic banking services.

Let’s assume that your new bank account was opened on 15^thNovember and you received your welcome kit (consisting of your cheque book and debit card), internet banking and debit pinon 24^thNovember by post and later, you discover that some fraudulent transaction took place in between those dates. In this case, you will not be liable for that transaction as it cannot happen without the involvement of any bank or the courier employee.

The banks usually send welcome kit and passwords separately through different couriers in order to mitigate such risks.

• Your liabilities if the fraud occurred after you received your card

You may be liable for any misuse of your debit/credit card until the time you report about the misuse or loss/theft of your card. As per RBI norms, your liability under such scenario will not be more than Rs.10000 for any loss that occurred before notifying your bank. Your bank will be responsible for any loss above Rs.10000.However, this limit will not be applicable if you acted fraudulently/negligently or your actions somehow contributed to the fraudulent use of your card.

Moreover, the bank will bear the loss if you incur any direct loss due to security breach of the online banking system that was not contributed or caused by you.

Impact of your complaint

Once you have reported a fraudulent transaction, your bank will immediately block your card and you will not be held responsible for any further unauthorised use of your card. You can ask your bank toprovide you with more details about the disputed transaction after you register your complaint with them.

If the unauthorized transaction reported by you is found to be a fraudulent one, the bank will reverse that transaction.

If the bank disputes your claim of fraudulent transaction, it will be their responsibility to prove that you have acted fraudulently or compromised sensitive information.

What happens if your bank dismisses your complaint?

If your bank dismisses your complaint or fail to respond and if you are not satisfied with theirresponse, you can approach the banking ombudsman.If you are not satisfied with the ruling of the banking ombudsman, you can then approach the appellate authority (deputy governor of RBI) within 30 days of the order.If you are still not satisfied with the ruling, you can go to the High Court.Alternatively, you can lodge a first information report (FIR) at a police station and approach a criminal court directly.

As prevention is always better than cure, you should exercise caution to prevent the misuse of your card. Review your account statement at regular intervals to look for any discrepancies and report them to your bank.Always be physically present when your card is being swiped at shopping outlets and do not respond to any e-mails seeking your User ID, card number or passwords. Most importantly, link your mobile number to your bank account or credit card to receive alerts on completed transactions. You should also install quality anti-virus software in your computer to secure online transactions.

(The author is the Managing Director of Paisabazaar.com)

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