Online fraud complaint. Steps to follow in fraud transactions.

fraud transaction

There is a master circular of RBI dated July 6,2017 about the liabilities of customers in case of fraudulent/unauthorized transactions for all Scheduled Commercial Banks (including RRBs) (One reason why you should open account with Schedule commercial bank) and all Small Finance Banks and Payments Banks.

Reporting Fraud Transactions

One should report the fraud transaction to the bank immediately. After you report the transaction to the bank your liability becomes zero for the further fraudulent transactions as now it has become bank’s responsibility to prevent further unauthorised transactions in the account.

The fraud transaction should be reported to the bank within three working days of receiving the message from the bank regarding the unauthorised transaction.

Now how will you get to know about the fraud transaction from bank account? Obviously through SMS and Email alert. So always register yourself for SMS alerts.

Interesting Fact: According to the circular the banks may not offer facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank.

The fraud transactions can occur due to the account holder’s negligence (when you share your OTP or other confidential account related details) or some deficiency or negligence at bank’s end or even when there is third party breach where the liability does not lie either with the bank or the customer.

So according to RBI, there are two types of liabilities at customer’s end:

(a)Zero Liability and (b) Limited Liability

Let’s discuss briefly what are these?

(a) Zero Liability of a Customer

Customer’s zero liability arises when the unauthorised transaction has occurred in the following events:

  1. Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).
  2. Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction.

(b) Limited Liability of a Customer

One is liable for the loss occurred due to unauthorised transactions in the following instances:

  1. First, when the loss is due to negligence of the customer, such as where he has shared the payment credentials, the customer will have to bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurred after the reporting of the unauthorised transaction shall be borne by the bank.
  2. In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after receiving the communication from the bank) on part of the customer in notifying the bank, the customer is liable for the following amount:
Type of AccountMaximum liability
(₹)
• BSBD Accounts5000
• All other SB accounts
• Pre-paid Payment Instruments and Gift Cards
• Current/ Cash Credit/ Overdraft Accounts of MSMEs
• Current Accounts/ Cash Credit/ Overdraft Accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/ limit up to Rs.25 lakh
• Credit cards with limit up to Rs.5 lakh
10000
• All other Current/ Cash Credit/ Overdraft Accounts
• Credit cards with limit above Rs.5 lakh
25000
Maximum Liability of a Customer under fraudulent transactions


Further, if there is delay in reporting the transactions (beyond seven working days), the customer liability is determined as per the bank’s Board approved policy.

How to count the working days?

The number of working days shall be counted as per the working schedule of the home branch of the customer excluding the date of receiving the communication.

In how much time the money will be refunded?

The bank shall credit the amount involved in the fraud electronic transaction to the customer’s account within 10 working days from the date of receipt of such notification by the customer (without waiting for settlement of insurance claim, if any).

Read in detail the RBI Circular

https://www.rbi.org.in/commonman/English/Scripts/Notification.aspx?Id=2336

Read more: https://govtschemesin.com/2023/01/13/small-savings-schemes-are-they-a-good-investment-option/

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