Failure by a bank to send transaction alerts to a customer’s registered mobile number, despite the number being updated in its records, amounts to a serious deficiency in banking service and not merely a technical lapse, a consumer commission has ruled. The commission has directed the State Bank of India (SBI) to refund ₹1,35,500 to a woman along with nine per cent annual interest.
The North-East District Consumer Disputes Redressal Commission in Delhi held the bank responsible for deficiency in service and directed it to pay the complainant ₹1,35,500 with nine per cent annual interest from the date of filing the complaint. The commission also ordered the bank to pay ₹45,000 as compensation and ₹25,000 towards legal expenses, along with nine per cent annual interest on the litigation cost.
FCRF Launches CP-FRM to Build India’s Next Generation of Fraud Risk Professionals
How Did the Woman Discover the Missing Money?
The case relates to Sarita, a resident of Welcome in Delhi, who maintained a savings account with SBI’s Seelampur branch. According to her complaint, her account had a balance of ₹1,35,046 as of March 25, 2020. When she visited the bank in November 2020 to withdraw money, she discovered that there was no money left in her account.
The investigation into the account showed that the money had allegedly been withdrawn on different dates through various customer service centres. Between May and July 2020, multiple unauthorised withdrawals amounting to around ₹1,35,000 were allegedly made from different locations.
Why Did She Not Know About the Withdrawals?
Despite the repeated withdrawals, the bank did not send a single SMS transaction alert to the customer’s registered mobile number. The woman’s mobile number and identity documents had already been updated in the bank’s records. Because she did not receive any transaction notifications, she remained unaware of the alleged fraud for an extended period, allowing the withdrawals to continue.
What Did SBI Tell the Commission?
The bank told the commission that the withdrawals had been made at different locations using the Aadhaar number. It also stated that an internal investigation had been conducted after the complaint was received. However, the commission rejected the bank’s defence and found that the bank had failed to establish that transaction alerts relating to the withdrawals had actually been sent to the account holder.
The commission referred to earlier decisions of the National Consumer Disputes Redressal Commission and observed that failure to send SMS alerts for account transactions constitutes a serious deficiency and negligence in banking service. Such alerts are intended to enable customers to immediately identify suspicious transactions and take timely action.
The commission observed that if the woman had received timely information about the withdrawals, she could have taken immediate steps to prevent further losses. Since the bank failed to demonstrate that the required transaction alerts had been delivered, the commission held it responsible for the deficiency in service.
How Much Must the Bank Pay?
After examining the evidence and circumstances of the case, the commission directed SBI to return the disputed amount with nine per cent annual interest from the date of filing of the complaint. In addition, the bank was ordered to pay ₹45,000 as compensation and ₹25,000 towards legal expenses, with nine per cent annual interest applicable to the litigation cost as directed.
What Does the Ruling Mean for Bank Customers?
The ruling highlights the importance of transaction alerts in preventing financial losses. Banks are expected to maintain effective systems for notifying customers about withdrawals and other account activity, particularly when registered mobile numbers are available and updated in their records.
For customers, the case also underlines the importance of regularly checking bank statements and immediately reporting unauthorised transactions. However, the commission made clear that where a bank fails to provide transaction alerts despite having the customer’s registered mobile number, such failure can be treated as a deficiency in service when it contributes to delayed detection of unauthorised withdrawals.
The420 Takeaway: Don’t Ignore Missing Bank Alerts
Transaction alerts can provide the first warning that money is being withdrawn without a customer’s knowledge. Customers should ensure their registered mobile number is correct, regularly check account activity and immediately contact their bank if expected transaction alerts suddenly stop or an unfamiliar withdrawal appears.
Follow for daily updates on cybercrime, corporate fraud, DFIR, hacking, investigations, and digital forensics
