The Maharashtra State Consumer Disputes Redressal Commission in Mumbai ordered Bank of India to pay ₹5 lakh compensation to a 65-year-old woman because of problems related to unauthorized ATM transactions.
What is the case?
The woman had maintained a savings account with the bank since 2010 and had deposited money received from selling her house. Later, a total of ₹12.47 lakh was withdrawn from her account through several ATM transactions without her permission. The withdrawn money was reportedly used to purchase items such as gold jewellery, wine, a television, and other goods. The woman alleged that the bank had failed to properly follow security procedures while issuing her ATM-cum-debit card. She further claimed that bank officials never asked her to sign the card, even though the bank’s records stated that she had signed it in their presence.
The bank said that it had followed all the required rules and procedures when the woman’s account was opened. It also argued that the money was taken by a third person, meaning a criminal, and not by the bank itself. Therefore, according to the bank, it should not be held responsible for the fraud.
What the commission decided?
The commission stated that every unauthorized transaction does not automatically make the bank responsible. However, banks are expected to follow basic security procedures, especially when dealing with elderly or less-educated customers.
One important rule is that the customer should sign on the signature strip of the ATM card in the presence of bank staff, as this signature helps confirm the identity of the real cardholder and prevents misuse. In this case, the commission noted that the bank’s records claimed that the woman had signed the card, but she stated that no such signature was taken. Due to this failure to follow a basic security procedure, the commission held the bank partly responsible for the loss.
The commission ordered the bank to pay ₹5 lakh to the woman as compensation for the financial loss she suffered, as well as for the mental stress and hardship caused by the incident. In addition to this, the bank was also directed to pay ₹25,000 to cover the legal expenses she incurred while pursuing the case.
The commission stated that banks must be extra careful with elderly or less-literate customers and must strictly follow security procedures when issuing ATM cards.
