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3 banks, cellphone co to pay 25L damages Vishwas Kothari,TNN | Jan 14, 2015, 05.52 AM IST 3 banks, cellphone co to pay 25L damages Vishwas Kothari,TNN | Jan 14, 2015, 05.52 AM IST

Jan-14-2015 | 0 Comments

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PUNE: The state department of information technology's Adjudicating Officer (AO) has directed three banks and a cellphone service provider to collectively pay compensation of Rs 25.12 lakh to a city-based partnership firm for failing to provide basic due diligence and security to customer, resulting in a phishing case.

Lawyer Gaurav Jachak, on behalf of the firm, had moved a complaint before the AO and principal secretary (IT) Rajesh Aggarwal claiming overall damages worth Rs 59.60 lakh after a fraudulent online transaction resulted in unauthorised transfer of Rs 49.50 lakh from the firm's accounts at the Bajirao Road branch of the Bank of Maharashtra (BoM). The fraud was committed by miscreants out of India. Of the damages sought, Rs 10.10 lakh were claimed towards cost of proceeding and application fees.

In an 11-page order passed recently, the AO took note of the fact that Rs 24.38 lakh were recovered from the various accounts. He assessed that Rs 25.12 lakh was a fair compensation considering that Rs 12.12 lakh were withdrawn by a non-traceable customer from the Karur Vysya Bank and another Rs 13 lakh were withdrawn by a non-traceable customer from the Andhra Bank, branches of both these banks located in Meerut.

The AO ruled that the complainants, including the firm's chief accountant who was the authorized person for online banking, also needed to share the blame for being lax in maintaining security of their accounts and, hence, were not eligible for any interest on the lost amount or the proceeding fees.

Of the total Rs 25.12 lakh compensation award, the AO ordered the Bank of Maharashtra and the Idea Cellular Private Limited to pay Rs 5 lakh each and the Andhra Bank to pay Rs 8 lakh and the Karur Vysya bank to pay Rs 7.12 lakh to the firm. The cellphone service provider was held accountable for not following reasonable security practices, procedure and established guidelines before issuing duplicate SIM cards that played a critical role in the crime.

The firm, 'VK: A Architecture', located in Navi Peth, is run by partners Vishwas Kulkarni and Hrishikesh Kulkarni. Deepali Shridhar Bokil is the chief accountant. It has current and cash credit accounts with the BoM branch.

On July 11, 2013, Bokil had responded to the call from a mobile number where in the caller claimed to be representative of the BoM head office and requested her to update her mobile number and email address. Later, she received a text with the same request. On July 25, 2013, Bokil found that the online services of her mobile number were barred and she checked with the representatives of service provider, Idea Cellular, who recommended her to go for a new sim card due to technical issues with the old one. When the new sim card was activated, Bokil started getting messages of online transfers. She informed the two partners of the firm and approached the bank for freezing the accounts. By this time, the transfers were effected. Later, the firm lodged a complaint with the Pune police's cyber cell.

The money was transferred to three accounts with Axis Bank at Chandigarh (Rs 4 lakh), Andhra Bank (Rs 23 lakh) and Karur Vysya Bank (Rs 12.50 lakh), both in Meerut. Of this, the account holder in Chandigarh returned the money to the firm while Rs 13 lakh and Rs 12.12 lakh were withdrawn by non-traceable account holders from the Andhra Bank and Karur Vysya Bank, respectively. The remaining amounts were frozen and eventually recovered in favour of the firm.

(Wither Commitment)

"Most of the banks in USA and in other developed nations insure their customers against online/ATM frauds etc., beyond a liabilty of $50. Section 909 of the 'Electronic Fund Transfer Act' of USA dealing with customer liability is really loaded in favour of the consumer. On similar lines, recently in January 2014, Banking Codes and Standard Board of India (BCSBI) unit has issued "Code of Bank's Commitment" wherein customers of such fraud will be liable to the extent of Rs 10,000 only and the bank has to make good the rest of the amount, but acceptance of this code by banks is not visible." _ Principal Secretary (IT) and Adjudicating Officer Rajesh Aggarwal.


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