Consumer Forum holds Bank liable for cyber frauds and orders SBI to pay amount to customer

Banks typically do not compensate customers for losses incurred to scammers. However, an elderly Chennai man who lost his monthly pension to an online scam won a legal battle against State Bank of India (SBI), which was ordered to repay him.

M. Thuyamurthy, a resident of Kavaraipettai in Gummidipoondi, had a savings account with SBI’s Ponneri branch, where his pension was deposited. In October 2021, he received a text message informing him that Rs. 20,000 had been debited from his account even though he had not used his ATM card. He immediately contacted the bank, but the branch manager informed him that the amount had been withdrawn from an ATM in West Bengal.

Thuyamurthy filed complaints with the banking ombudsman and the police. Although the police tracked down the suspect using CCTV footage, the bank did not take any steps to recover the funds, as he stated in his complaint to the Thiruvallur District Consumer Disputes Redressal Commission.

The bank claimed that the amount was withdrawn via the SBI YONO app using a one-time password (OTP), which the customer must have shared with the scammer. The bank argued that this was purely the customer’s negligence. When Thuyamurthy objected, SBI submitted an additional document stating that the customer’s BSNL-networked phone had received the OTP for the transaction.

However, Thuyamurthy informed the commission that he did not use BSNL. The commission rejected the document as it did not contain any authenticated details.

As a result, the commission ordered the bank to repay Thuyamurthy Rs. 20,000 for deficient service and Rs. 15,000 in compensation for mental anguish and legal expenses.