Nagpur Consumer Commission Orders ICICI Bank to Refund Rs 5.18 Lakh to Cyber Fraud Victim
The Nagpur Consumer Commission held ICICI Bank responsible for failing to monitor suspicious transactions in a ₹6.93 lakh cyber fraud case. The bank was directed to pay the customer ₹5.18 lakh with 9% interest, ₹25,000 compensation and ₹10,000 litigation costs.
The District Consumer Disputes Redressal Commission (Additional DCF), Nagpur, has held that banks have a continuing responsibility to monitor suspicious transactions. The Commission said that a bank cannot completely avoid liability simply because a customer was tricked by fraudsters into authorising transactions.
ICICI Bank Held Responsible for Deficiency in Service
The Bench comprising President Satish A. Sapre and Member Milind Kedar held that ICICI Bank was responsible for deficiency in service, negligence, and unfair trade practices for failing to comply with the Reserve Bank of India’s KYC and transaction monitoring guidelines.
The Commission observed that a bank’s responsibility does not end after opening a customer’s account. Banks are required to continuously monitor accounts and conduct ongoing due diligence to identify unusual or suspicious transactions that are different from a customer’s normal transaction pattern.
Customer Lost ₹6.93 Lakh in FedEx Cyber Fraud
The complainant, Prachi Digambar Dhoke, had a savings account with ICICI Bank. On January 8, 2023, she received a phone call from a person claiming to be a FedEx customer service representative.
The caller falsely told her that an international parcel booked in her name contained two passports, five ATM cards, 300 grams of weed, and a laptop. She was then connected to people pretending to be Mumbai Police officials.
The fraudsters threatened her with criminal action and convinced her to transfer ₹6,93,437.50 through four transactions to another ICICI Bank account. The money was claimed to be required for investigation and processing charges.
Customer Immediately Reported the Cyber Fraud
After realising that she had been cheated, the complainant immediately informed ICICI Bank. She also filed a complaint on the National Cyber Crime Portal and later registered an FIR.
ICICI Bank initially provided her with a temporary or shadow credit for the disputed amount. However, the bank later reversed the amount, stating that the transactions had been authenticated through OTPs.
The Banking Ombudsman subsequently directed that around 25% of the disputed amount be credited to the complainant. She then approached the Consumer Commission to recover the remaining amount of ₹5,18,437.
ICICI Bank Said Transactions Were Authorised Through OTPs
ICICI Bank opposed the complaint and argued that the matter involved a criminal investigation and therefore should not be heard by the Consumer Commission.
The bank also argued that the complainant had voluntarily transferred the money and authenticated the transactions using OTPs. ICICI Bank further stated that the Banking Ombudsman had not found any deficiency in service on its part and that the beneficiary bank had been directed to credit around 25% of the disputed amount.
Consumer Commission Rejects ICICI Bank’s Arguments
The Commission rejected ICICI Bank’s argument that the matter was purely criminal in nature. It said that although cyber fraud itself was a criminal offence, the question of whether the bank had followed its statutory and regulatory responsibilities was a separate issue that could be examined by the Consumer Commission.
The Commission pointed out that under RBI’s KYC Directions, banks are required to conduct ongoing due diligence and continuously monitor unusual and suspicious transactions.
₹2.84 Crore Transactions in Beneficiary Account Raised Concerns
The Commission noted that the beneficiary account had remained largely inactive but suddenly recorded transactions worth approximately ₹2.84 crore within just two days.
According to the Commission, such unusually large transactions should have resulted in enhanced monitoring and scrutiny under RBI’s KYC guidelines. However, ICICI Bank failed to show that it had taken adequate monitoring or preventive measures in accordance with the RBI requirements.
Bank Failed to Freeze Funds After Fraud Complaint
The Commission also observed that the complainant had promptly reported the cyber fraud to the bank. Despite this, the bank failed to take immediate steps to freeze the transferred funds.
Based on these circumstances, the Commission held ICICI Bank responsible for deficiency in service, negligence, and unfair trade practices.
ICICI Bank Directed to Pay ₹5.18 Lakh With 9% Interest
The Consumer Commission partly allowed the complaint and directed ICICI Bank to pay ₹5,18,437 to the complainant. The bank was also directed to pay interest at 9% per annum from the date of filing of the complaint until the amount is fully paid.
In addition, the Commission awarded ₹25,000 as compensation for mental agony and ₹10,000 towards litigation costs. ICICI Bank has been directed to comply with the order within 45 days.
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