The Bangalore Urban District Third Additional Consumer Dispute Recovery Commission ordered Standard Chartered Bank and Pay U Payment Private Limited to jointly reimburse Rs 1.5 lakh, which was fraudulently transacted from the credit card of A 63 year old man from Bengaluru during the Covid induced lockdown period in April 2020.
Standard Chartered Bank had issued a credit card to N Nirmal Chander. It was due to expire in 2023. The credit limit was Rs 2.25 lakh. A fraudulent transaction took place on April 29, 2020 for Rs 1.5 lakh from his credit card.
The amount was paid to Pay U Limited without their knowledge. To his surprise, he did not receive any OTP, SMS or mail alerts from the bank.
Chander only became aware of the transaction on May 5, 2020, when a message was sent by the bank informing him that the amount due for payment on May 26, 2020 was Rs 1,57,652.
He immediately informed the bank’s customer service. He was informed that Rs 1.5 lakh had been paid to Pay U Limited.
Therefore, he filed a complaint regarding the fraudulent transaction on May 5, 2020, through the bank’s customer cell.
After eight working days, the bank told him to file a complaint with the cybercrime police. Since he received no response from either the police or the bank, he issued a formal notice.
The disputed transaction was processed with two-factor authentications. The one-time password (OTP) was sent to his mobile number and an email was updated.
The OTP/SMS log was retrieved and it was noted that the transaction was successful after the OTP was validated. Therefore, it appeared to be a valid transaction, argued the bank’s lawyer.
Hearing from both parties, the commission found that when using the credit card, the customer will only be a layman. The credit card holder is not expected to have knowledge of the processing of the transaction between the bank and Pay U Limited.
Neither the bank nor the limited payment disclosed to whom the amount of Rs 1.5 lakh was paid and ultimately to which account said amount was credited. It is their responsibility to know to whom the money has been paid when a dispute has arisen, the commission said.
Although the credit card holder immediately notified customer service of the fraudulent transaction, the bank did not refund the amount, the commission said.
The commission ordered the bank and Pay U Limited to jointly repay Rs 1.5 lakh with annual interest of 9% from April 29, 2020 until completion.
He also ordered to pay Rs 15,000 for mental stress, legal fees and court costs. They must comply with the order within 30 days.