COMPENSATION FOR e- FRAUDS

BE/RBI/24/2017

Frauds under e-platforms are on the increase.  Recent RBI directives on e frauds are many. To name a few:

1. RBI directed banks to credit the amount involved in the unauthorised electronic transaction within 10 working days to the account holder. – 7^th July 2017
2. Reserve Bank of India (RBI) has come out with rules to make electronic banking transactions safer. Customers will not suffer any loss if unauthorised electronic banking transactions are reported within three working days and the amount involved will be credited in the accounts concerned within 10 days, the RBI said in a notification – July 7, 2017
3. In case the third party fraud is reported with a delay of four to seven working days, a customer will face liability of up to 25,000- July 6, 2017

Now, RBI has framed norms limiting the customers’ liability on frauds.  Here is the synopsis of its statement:

1. Reviewing the customer liability on frauds, in case of limited or Zero liability from the customer, Banks are directed to credit the amount involved in the unauthorised electronic transaction within 10 working days to the account holder.
2. Banks are also advised to use their discretion in waiving off any customer liability in case of unauthorized electronic banking transactions, even if it occurred due to customer’s negligence.
3. Customers should be advised by banks to compulsorily register for SMS alerts and e mail alerts for electronic banking transactions.
4. Customers should be advised to immediately inform the bank, in case of any unauthorised e transaction in their accounts at the quickest possible time, after its occurrence, and more the delay more will be loss to the bank/customer.
5. Complaints of a customer should be addressed within 90 days from date of its receipt and customer compensated as per provisions. In case of debit card/balance in the account, customer should not lose any interest and similarly in case of credit card customer should not be additionally charged.
6. RBI also added that the customer should not delay in reporting of the fraud beyond seven days, in which case the decision will be left to the bank’s board.
7. Zero Liability and Limited Liability of a customer defines further details of parties’ liability in such fraud instances.