ATM Card Activation Without Customer Verification, Rohtak District Commission Holds ICICI Bank Liable For Deficiency In Service

Brief Facts:

Mrs. Shakuntala Devi (“Complainant”) was an account holder in the ICICI Bank (“Bank”). She visited the bank to activate her ATM. The bank requested the TP Number from her to activate the ATM, which she did not have at that time. Therefore, the bank staff assured her that they would contact her for the information. Following this, the bank contacted her, and she provided the TP number. Later, the Complainant deposited Rs. 3,73,283/- as an FDR in the account. However, she later discovered that there were a few unauthorized withdrawals from her account, including a premature transfer of the FDR amount to her savings account. The Complainant made several communications with the bank but didn't receive any satisfactory response. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Rohtak, Haryana (“District Commission”).

In response, the bank acknowledged the Complainant's status as an ATM holder but denied that she visited the bank to activate her ATM or that the bank requested an OTP, which she did not have. The bank denied any agreement to contact the Complainant for the OTP, asserting that the Complainant fabricated this information. The bank contended that the Complainant's complaint was a false story aimed at recovering funds lost due to her negligence. The bank asserted that the Complainant willingly shared account details, leading to a fraudulent withdrawal. The bank explained that the premature transfer of the FDR to the savings account was done through legitimate Internet banking procedures, with the Complainant's authentication. Additionally, the bank claimed that the deposit made was reversed after an internal investigation revealed the Complainant was negligent in sharing payment credentials.

Observations by the Commission:

The District Commission noted that the bank identified suspicious activities in the Complainant's account in June 2018 and promptly blocked the card to prevent potential misuse. However, the District Commission noted that the subsequent activation of the card through Interactive Voice Response (IVR) raised concerns regarding the security of the bank. The District Commission held that the IVR system, being computer-based, indicated that customers should be verified before card activation. The District Commission found that the bank failed to adhere to this security measure and activated the card without customer verification. Therefore, it held that due lack of security measures, there were unauthorized transactions amounting to Rs. 489,000/- from the Complainant's account.

The District Commission held the bank liable for deficiency in services. Consequently, the District Commission directed the bank to refund the deducted amount of Rs. 4,89,000/- to the Complainant along with an interest rate of 9% per annum from the date of deduction (22.06.2018) until realization. Additionally, the bank was directed to pay Rs. 5,000/- as compensation to the Complainant for deficiency in service and Rs. 5,000/- as litigation costs.

Case Title: Shakuntala Devi vs The ICICI Bank

Advocate for the Complainant: Ms Renu Hooda

Advocate for the Bank: Shri Naveen Chaudhary

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