An iPhone 6s for Rs 699 sounds like a steal. Unfortunately, as people later found out, it was indeed a steal, but of their own money. With the offer being so irresistible, people were quite willing to share their bank and card details with a fake e-portal which was designed to look exactly like other popular online shopping portals.
Also Read: Modi’s ‘Digital India’ Under Threat As Online Transactions Decline
Keeping a Check on Online Fraud
An unfortunate consequence of the increase in online financial transactions is the increasing risk of online fraud. With the government’s recent push for increasing digital transactions, concerns about the security of our financial information become more insistent.
The Digital India project is committed to spending Rs 1,130 billion by 2020 and aims to increase access to mobile phones, broadband services and create more Wi-Fi hotspots everywhere. The Jan Dhan programme, along with demonetisation, have ensured that there are more people inside the banking system now than ever before. As access to quality internet and digital literacy increases, more people will be moving towards transacting money online.
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Between October-December 2016, mobile wallet transactions grew by 114 percent and mobile banking by 30 percent.
While the shift towards digital payments is welcome in the potential it has to include more people in the formal banking system, the situation warrants a close look at the security and enforcement aspects in case of digital bank fraud.
Also Read: Demonetisation, Aadhaar, and the Great Rural ID Theft
Rise in Cyber Fraud Cases
‘Current fraud trends in the financial sector’, a report published by Assocham in June 2015 shows that for the period between 2011-2015, while there has been an increase in the value of NEFT/RTGS transactions as well as mobile banking transactions, there has been a similar level of growth in the cases of cyber fraud reported to RBI.
The report also mentions that as per the Minister of Communications and IT, Government of India, cyber fraud cases worth Rs 497 crore have been reported by the RBI and CBI since 2011.
For a lot of us now, the fear is about losing our money when transacting online. There are remedies and safeguards in the law when this happens, although some of these remedies work better than others. We explain below how the law works, and what you can do in case you lose money online.
How Can One Lose Money Online?
Here are some of the situations that you may find yourself in:
1) Your credit or debit card can be cloned when you use it in a shop or restaurant.
2) Fake calls pretending to be from the bank, to steal your card or PIN number.
3) Fake emails linking you to sites that steal your login details (known as ‘phishing’ emails).
4) Fake emails with virus attachments that steal financial information from your computer.
5) Scams that promise to transfer money into your account, but steal all your data instead.
If you have lost money while transacting online or have been a victim of online fraud, you have the right to take measures to recover your money. You can also file a criminal complaint against the offender. Let’s discuss this further.
Also Read: Online Shopping Is On The Rise; When Will Customer Care Catch Up?
Customer’s Course of Action
If any losses are suffered on account of any of the above-mentioned situations, the following options are available to the customer:
I. Lodge a complaint with the bank
Most banks have staff dedicated to matters like this. The relevant contact details are found on the backside of your card as well as the website of the bank.
If you have suffered a loss you must immediately contact the banks via phone (preferable) or email. Do not forget to note the complaint number and follow up your complaint using the same number. If you follow this procedure, banks are supposed to reimburse you at least part of the money you lost (see below).
The Code of Bank’s Commitment to Customers (CBCC) issued by the Banking Codes and Standards Board of India mandates each bank branch to display the name of the official at the bank branch responsible for addressing customer grievances.
Specifically, for ATMs, telephone numbers of help desks/relevant contact persons of the banks that own ATMs are also displayed at every ATM machine for the customer to be able to lodge a complaint about any issue while operating the ATM.
Typically, the bank will send you a final response or explain why more time is needed to investigate within 30 days of receiving the complaint.
II. File a complaint with the Banking Ombudsman in your jurisdiction
If you are not satisfied with the resolution provided by the bank and would like to escalate the matter, you can approach the Banking Ombudsman established by the Reserve Bank of India under the Banking Ombudsman Scheme, 2006. Each bank is required to display at its branch the details of the Banking Ombudsman under whose jurisdiction the branch falls. Complaints may be lodged with the respective Banking Ombudsmen here.
You can only do this once you have tried to settle matters with the bank, and failed. If you file a case in Court, such as the Consumer Court, you cannot approach the Ombudsman while the case is going on.
If you are not satisfied with the decision of the Banking Ombudsman, you can approach the appellate authority against the Ombudsman’s decision – the Deputy Governor, Reserve Bank of India. This appeal must be made within 30 days of the Ombudsman’s decision.
III. File a complaint with the nearest cybercrime cell/police station
This may either be done in person, or in some states, through an online portal. Criminal proceedings usually take more time and result in jail or fine for the offender, and not just compensation to you.
IV. File a case with the relevant consumer forum
The Consumer Forum is present at the district, state, and national levels. You can file a case there depending on two factors:
1) The amount of money you lost
2) Where the loss happened. You can file the complaint in the place where the money was lost, or where the opposite party (that is, the bank) carries on their business.
Legal Option
You should approach consumer forums only when you feel that the bank has been negligent, and has not given you proper service.
The forum hears your case against the bank, not the actual culprit. Generally, cases cannot be filed at the same time before the consumer courts as well as the banking ombudsman.
There is also an option of enforcement under the Information Technology Act, which states that compensation may be awarded to the affected person for frauds carried out while undertaking banking transactions online under Section 43 of the Act. Banks may also be required to pay compensation under Section 43A of the Act if it is found that they failed to maintain reasonable security procedures.
The Ministry of Electronics & Information Technology has mandated that the Secretary of Department of IT of each state shall act as the ‘Adjudicating Officer’ to decide on any violations arising under the Act.
If you are not satisfied with the order passed by the Adjudicating Officer, you may file an appeal with the Cyber Appellate Tribunal (CAT) within 25 days. The CAT is supposed to make a decision within 6 months – unfortunately, it has not been functioning properly and therefore is not an effective remedy currently.
Will You Get All Your Money Back?
The Code of Bank’s Commitment to Customers says that you will have to be reimbursed by the bank, if you inform the bank promptly. Your maximum loss should never be more than Rs 10,000 – for example, for a fraudulent withdrawal of Rs 50,000, the bank will make good your loss of Rs 40,000, and you will only have to bear the loss of Rs 10,000.
This limit will not apply if you have acted fraudulently or negligently or have contributed to the disclosure of/unauthorised access to information. For example, if you have shared your financial information like PIN number freely with others, the bank can say that you have been negligent, and they are not bound to reimburse you.
Safety Guidelines for Online Transactions
I don’t want to lose my money. How can I protect myself when transacting online?
It is difficult to be 100 percent secure online, since technology is always changing. But there are certain things you can do to decrease the chances of losing your money online:
1) Never reveal personal financial information (PIN, internet banking passwords etc) to anyone, including those who claim to be authorised representatives of the bank.
2) Enable One Time Password for all online transactions, and subscribe to mobile and email alerts for notification of transactions.
3) Use unique passwords and avoid using personally identifiable information like birth dates.
4) Change your internet banking password on a regular basis.
5) Do not open links from suspicious emails, and make sure your computer has an updated anti-virus software. If you do end up opening a site believing it to be authentic, check for the padlock symbol next to the site and double click on it for the site certificate before entering personal information.
6) Do not save phone or internet banking passwords for future use even on your mobile phone or personal computer.
7) Make sure you use the password protection offered on your mobile device.
8) Do not fall prey to offers of money that sound too good to be true! This includes lottery winnings and foreigners asking if they can send money into your account.
Always follow bank instructions and avoid carrying out banking transactions on public computers. If they must be used, make sure you log out of your account and delete browsing history after finishing the transaction.
Also Read: Sabse Bada Rupaiya: Challenge of Gaining Trust in Digital Cash
(The author is a lawyer and CEO of Nyaaya, which is a free, non-profit resource explaining and documenting all Indian laws. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
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