Bank Not Liable If Customer Negligently Shares Payment Credentials, Chandigarh District Commission Dismisses Complaint Against SBI Cards and Payment Services
The District Consumer Disputes Redressal Commission-I, U.T. Chandigarh dismissed a complaint against State Bank of India (SBI) Cards and Payment Services on the allegation of failure to reverse an unauthorized OTP-based credit card transaction. The District Commission perused the RBI Guidelines and held that a customer shall bear the entire loss resulting from unauthorized transactions if...
The District Consumer Disputes Redressal Commission-I, U.T. Chandigarh dismissed a complaint against State Bank of India (SBI) Cards and Payment Services on the allegation of failure to reverse an unauthorized OTP-based credit card transaction. The District Commission perused the RBI Guidelines and held that a customer shall bear the entire loss resulting from unauthorized transactions if it is due to the customer's negligence.
Brief Facts:
On 1 November 2021, allegedly, the Complainant received a call from a customer care executive of SBI Card regarding the lapse of Credit Card insurance. To resolve the issue, she agreed to the customer executive's proposal and received a message on WhatsApp requesting an OTP, which she promptly provided to the customer executive. Subsequently, she received a debit message of Rs. 70,403/- for a transaction at Housing.com. The Complainant made several attempts to the customer executive but didn't receive a response. The Complainant then reached out to SBI Card customer service to block the card and requested withholding of the disputed amount. However, the SBI Card directed the Complainant to contact the merchant directly. Despite numerous attempts to seek a resolution, no action was taken by SBI Card. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”) and filed a consumer complaint against SBI and Housing.com.
In response, SBI Card contended that the transaction was conducted securely with a successful delivery of OTP and transaction alerts to the Complainant's registered mobile number. It argued that liability in such cases rests with the Complainant, as the transaction was validated by CVV and OTP by the Complainant. SBI argued that it followed the due process by engaging with the merchant regarding the disputed transaction. Housing.com didn't appear before the District Commission for the proceedings. Therefore, it was proceeded against ex-parte.
Observations by the District Commission:
The District Commission noted that the Complainant shared the OTP received on her registered mobile number with a third party. It referred to the Reserve Bank of India guidelines issued on July 6, 2017, which clearly state that a customer shall bear the entire loss resulting from unauthorized transactions if it is due to the customer's negligence, such as sharing payment credentials. The guidelines specify that until the customer reports the unauthorized transaction to the bank, any loss incurred due to negligence falls on the customer. After the reporting of the unauthorized transaction, any subsequent loss is to be borne by the bank.
The District Commission held that the Complainant shared her payment credentials, resulting in the fraudulent debit from her account. The bank acted promptly upon the complaint, blocking the card to prevent further transactions. Therefore, the District Commission held that the Complainant's actions and negligence rendered her liable for the loss, and the bank could not be held responsible for her mistake. Consequently, the District Commission dismissed the Complainant.
Case Title: Pallavi Gupta vs State Bank of India (SBI) Cards and Payment Services and Ors.
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