A Delhi consumer commission has ordered the State Bank of India (SBI) to refund ₹35,010 and pay an additional ₹15,000 in compensation, totaling ₹50,010, to an advocate who fell victim to a KYC fraud. The ruling came after the customer lost money in two unauthorized transactions despite promptly blocking his debit card and UPI services.
The incident, which occurred on September 8, 2021, involved the advocate receiving a message and call claiming his Know Your Customer (KYC) details had expired. He was then instructed to download a fraudulent application from the Play Store, enter details, and make a ₹10 payment to update his KYC. Shortly after, a ₹35,000 transaction was initiated, for which he received an OTP but did not authorize or share it.
Customer Acted Swiftly After Fraud
Recognizing the fraud, the advocate immediately uninstalled the suspicious application, disconnected his internet service, and contacted SBI's toll-free helpline. He reported the debits of ₹10 and ₹35,000 from his account, requesting the bank to stop the payments and blocking his debit card and UPI services. Despite initial assurances from bank officials, SBI rejected his claim in January 2022, arguing that the transactions were authenticated via OTP and that the customer had downloaded a third-party application himself.
Commission Rejects SBI's Arguments
The consumer commission, comprising President Divya Jyoti Jaipuriar and members Ashwani Kumar Mehta and Harpreet Kaur Charya, heard the complaint on October 14. They rejected SBI's defense, noting that the complainant had not shared the OTP or other payment credentials. Crucially, the commission found that the ₹35,000 transaction occurred at 7:40 PM on September 8, 2021, after the advocate had already blocked his debit card and disabled UPI services, highlighting the bank's responsibility to prevent the transaction.
The order also clarified that merely downloading a fraudulent application does not inherently establish negligence on the customer's part. Furthermore, the commission criticized SBI for failing to resolve the complaint within the prescribed 90-day period. Consequently, SBI was directed to refund the full amount of the unauthorized transactions and pay compensation for mental harassment and litigation expenses.
Protecting Against KYC Fraud
This ruling underscores the critical importance of swift action from both customers and banks in cases of financial fraud. Customers are advised to never share One-Time Passwords (OTPs) or banking credentials and to immediately block affected payment instruments and file a formal complaint if they suspect unauthorized activity. For assistance with consumer grievances, individuals can contact the National Consumer Helpline at 1915.