Identity Crisis! A Consumer’s True Tale Of Loss Due To A Bank’s Negligence.

Posted on March 13, 2013 by Runjhun

Tadka Take

Did you know that RBI regulations require that every person withdrawing an amount greater than Rs. 50,000 via cheque must carry an identity proof?

More importantly, does your bank know this?

Before if it doesn’t know this or doesn’t comply with this regulation, you may be under a genuine risk of losing moeny to any fraud walking in with a cheque and withdrawing money from your account.

Don’t think this is possible? We too thought so, until Sanjeev Kumar came to Akosha with a story that truly scared us. Below is his story in his words.

Consumer Story

I got a cheque of Punjab National Bank numbered- 487459 worth Rs. 30,00,00/- issued by Anand Mohan Prasad. I deposited it on same day to a/c 1255000105101487 for which I got an acknowledgement . The cheque, however, got liquidated and the amount was paid to other person without my knowledge and hence I lost all the money. Following all drama when I asked to bank for identity proof of the person who got my money, they refused to provide me the same. RBI’s circular for KYC/AML document – RBI/2011- 12/72 DBOD. AML. BC. No. 2 /14 .01.001/2011-12 July 1, 2011 clause 2.5 says that every customer withdrawing more than Rs. 50,000/- from cheque have to submit identity proof. In spite reminding the bank several times in written, they have refused to cooperate with me. It has been over one and a half month but I am yet to hear from either RBI or PNB.

Tadka Take 2

This consumer’s plight is extremely disturbing not only because the consumer lost a huge sum money on account of bank’s negligence but also because it reveals the casual attitude of the bank towards something as fundamental as an RBI guideline. Such an attitude exposes the issues in the system as a whole that make every consumer in this country vulnerable to such frauds. We really hope that the bank rectifies its ways and not only responds and addresses this consumer’s concerns but also takes stringent measures to avoid such instances in future.

Dear Fraud! ICICI Bank Held Liable For Customer Losing Money In Fraudulent Transaction, To Pay 1.75L.

Posted on February 19, 2013 by Runjhun

complaint against ICICI Bank, to pay 1.75 lakh to consumer who lost money due to fraud

Imagine, one fine day, over 1 lakh are withdrawn from your account–without your knowledge or involvement.

We for one would have definitely had a mini heart attack.

But it happens, way more frequently than any of us would be comfortable to admit. And in most cases, the bank refuses liability, pinning the blame on the consumer and washing their hands off the issue completely.

A consumer forum is New Delhi, however, decided to depart from the norm and pinned the blame squarely on the bank, making them pay up not only the lost amount but also compensation for harassment.

A consumer, holding a salary account in ICICI Bank, received 5 SMS alerts in January 2009, each relating to withdrawal of Rs.25,000 from his salary account, totalling Rs. 1.25 lakh, within minutes. He immediately contacted the bank, which, after conducting a probe, informed him that some fraudsters had removed the money from his account.

The complainant had alleged that the bank was negligent with regard to safety of customers’ confidential information, including password, and as a result he suffered financial loss. The bank obviously denied that it was negligent, and contended that the possibility of involvement of the consumer himself in the alleged fraud cannot be ruled out.

The forum however was less than sympathetic towards the bank considering the idea of the consumer himself sharing the information absurd and considered the possibility of involvement of the bank employees in the fraud was much more probable. The forum held that there was gross negligence and deficiency in service on the part of the bank which caused the heavy financial loss to the complainant and directed the bank to return him the amount along with compensation of Rs.50,000.

ICICI Bank to pay Rs.1.75 lakh for customer’s loss due to fraud (Livemint)

Lost In A Click, Lost Forever! Banking Ombudsman And Banks Refuse To Grant Relief In Internet Banking Frauds

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Posted on February 7, 2013 by Runjhun

Complaint About Internet Banking Frauds, Banking Ombudsman And Bankers Refuse To Grant Relief (Picture Credit :commerce.idaho.gov)

Two disturbing pieces of news unsettled our inbox today. Disturbing not because they concerned a national crisis; but simply because they implied that all of us avid internet users were under a dire threat..of losing money!

The first piece of news is from Mumbai where within 12 hours and 20 overseas transactions, a businessman lost over Rs. 2 lakhs in an instance of massive internet banking fraud of horrifying proportions. This Tardeo based businessman’s wife’s credit card was used for overseas transactions at the time when the family was in the city. What makes his situation worst is the fact that the issuing bank was way less than helpful and the police made him run around for 21 days before filing an FIR. Finally, the BKC cyber police registered a case on January 4, but the bank is yet to get back to him. He doesn’t even know if the transactions were made online or with a fake card.

Even though the bank has claimed that pending resolution, they have given temporary credit of Rs 2,05,023 for the 9 disputed transactions in customer’s credit card account, the incident is still a haunting highlight of the fate of internet banking and credit card frauds in the country.

Adding to the gloom, is another piece of news, again from Maharashtra.

The Maharashtra State Banking Ombudsman has refused to intervene in a dispute between a Kolhapur-based businessman, R. Unnithan, and his bank claiming that the case involves ‘elaborate documentary and oral evidence.’, which as per Banking Ombudsman Scheme is valid ground for rejecting a complaint.

Unnithan’s net banking account was hacked and an amount of Rs.9.65 lakh was withdrawn in 24 transactions across the country between April 12 and 13, 2012.

This decision opens floodgates of troubles for the consumers caught in internet banking frauds because in most such cases bankers too refuse to take responsibility claiming that most such cases happen due to customer’s negligence and that banks take sufficient precautions and advice customers against such frauds.

While Banking Ombudsman does have a point to the extent that they are not an investigative forum, equipped to handle such cases; it does not in any way mitigate the fact that the consumers are regularly losing money in such internet banking frauds and are forced to suffer in the absence of a dedicated redressal mechanism. The liability needs to be set off for the aggrieved consumers and cyber cells in the country should be better prepared to handle such cases and ensure that money lost at a single click of a mouse is not lost forever!

In 12 hours, Mumbai woman’s credit card used in 4 continents (Times of India)

Ombudsman washes hands of internet banking frauds (Hindu)

Happy Borrowing Ahead! Loans All Set To Get Cheaper As RBI Slashes The Key Interest Rates.

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Posted on January 29, 2013 by Runjhun

Loans All Set To Get Cheaper, RBI Slashes The Interest Rates

The guessing game is finally over and the much awaited, speculated and warranted RBI rate cuts are here.

These much awaited rate cuts have come after a period of around 9 months. The Reserve Bank of India on Tuesday slashed its key interest rates by 25 basis points and released Rs 18,000 crore additional liquidity into the system. The RBI slashed the short term lending rate or the repo rate 25 basis points (bps) to 7.75 per cent and Cash Reserve Ratio (CRR) by similar margin to 4 per cent, releasing Rs 18,000 crore primary liquidity into the system.

Technical jargons aside, in terms of practical implications, a reduction in the repo rate means a reduced cost of borrowing for individuals and corporates and a slashed CRR means banks have to park a smaller portion of the deposits with RBI which in turn means better availability of the funds in the system.

The repo rate, which was cut last in April 2012, stands revised at 7.75 per cent with immediate effect, while the liquidity infusing CRR stands at 4 per cent effective February 9.

The intent of the RBI behind these cuts is to provide an appropriate interest rate environment.

Happy Borrowing, Consumers!

Loans may get cheaper as RBI cuts key interest rates by 25 bps (Times of India)

Hike No More! Subsidized LPG Cylinders Cap Raised From 6 To 9; Diesel Prices Remain Unchanged For Now.

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Posted on January 17, 2013 by Runjhun

LPG cylider cap raised from 6 to 9, oil companies to increase diesel prices by small amount

The Petroleum Ministry has finally bit the proverbial bullet, and in a much expected move, increased the subsidized cylinders cap from 6 to 9 per year. This hike in the number of subsidized cylinders available for the consumers per LPG connection shall be effective from April 2013. This, in simpler terms means that April 2013, consumers can obtain 9 cylinders on a single connection at a subsidized rate (approximately ranging between Rs.410-450 per cylinder) while any cylinders acquired over and above this number shall be available at the market price (Approximately Rs. 950 per cylinder).

The LPG rates shall also remain unchanged.

However, along with this obvious good news and consumer friendly measure, comes another decision of the Cabinet, which is bound to hit the average consumers really hard in the times to come.

While the Ministry has stated that the prices for the LPG, Kerosene and Diesel shall remain unchanged for now, as per the Cabinet’s decision, the oil marketing companies have been authorized to hike the price of diesel from time to time by a ‘small amount’.

The definition of this ‘small amount’ obviously remains as dubious as ever and with oil marketing companies facing a loss of about Rs.10 per litre of Diesel. this small amount may turn out to be ‘not so small’ for the consumers. The Government has been assuring that this is not a complete deregulation of diesel and the hike would be small.

Fuel reforms have been long due and strictly from economic perspective, they are necessary, consumer troubles notwithstanding. However, the Government has obviously steered clear of unpopular decisions.

Economic concerns aside, we really hope for the sake of the consumers, that the no change in diesel prices continues and even if there is a hike, it is as Oil Minister Moily puts is “small”…really small!

Appalling! Today Group’s Bagittoday Refunds Payment For Fake Diamonds Only Upon Issue Of Arrest Warrants!

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Posted on September 12, 2012 by Runjhun

Complaint against Bagittoday and Today Group, Consumer Gets Refund For Fake Diamonds

Tadka Take

Appalling stories of cheating brands are fairly common in our world. What is rare is a fascinating story of a consumer who fights for his rights and sees the end of it, without giving up at any point.

Anything which involves courts, judiciary or related rigmarole is a strict no-no for most people in this country. And consumer forums, by virtue (or vice) of belonging to this family seem to have inherited this untouchability. This despite the fact that consumer forums by far are the most friendly courts in the country with probably the simplest procedures.

As the general hangup continues to haunt the consumer world in the country, it is heartening to come across consumers who were willing to look beyond the perceived hassles and actually take up an issue is the forum with a successful outcome.

Mr. Navindu Singla, was one such consumer, who with a little help from Akosha, ended up securing his due and his rights.

Consumer Story

Mr Singla has been a regular subscriber of India Today for the longest period of time. Loyalty richly rewarded, he received a call from a Today group executive, stating that he was their “premium” customer and has become eligible for an offer under hich Rs. 30,000 worth of diamonds were being given out for half their price, that is, 15000, through its entity Bagittoday.

An offer too good to refuse, and also relying on the reputation that Today group and consequently, Bagittoday enjoys, Mr. Singla, immediately made an online payment for the same. The diamonds arrived along with some free gifts that were approximately worth Rs. 3000 or so.

However, when he got the diamonds checked, much to his horror and dismay, he found that the diamonds were actually fake, with a worth of not more than Rs. 500.

Appalled at being cheated, he immediately called up the Bagittoday’s customer care, demanding a refund as per their policy. As expected, he was greeted with a very rude response, saying that he can’t buy or refund the stuff at will.

In Mr. Singla’s own words, he wasn’t really flustered by the monetary loss. But what really bothered him was rudeness and nonchalance with which the staff of a reputed group like Today behaved with its customers.

This was the point where he came across Akosha. Akosha sent out a letter to the group to no response.

A complaint then filed with the consumer forum. Despite repeated notices, the Group chose to ignore the proceedings and did not make an appearance. An ex-parte order was then passed, ordering the Group to refund the entire amount.

Ironically despite the order, the neither Bagittoday nor Today Group responded. It was at this point, a really and justifiably annoyed Singla, in consultation with Akosha, sought the execution of the order and got non-bailable warrants issued against the CEO of the group.

This extreme step finally evoked a response and the company’s lawyer got in touch with Mr. Singla, which was promptly followed up by payment in full. The flustered Today Group did not even bother to take their stuff back before refunding the amount, leaving a relieved Singla with both money and goods (not that diamonds were worth anything but there were also some other gifts, which at least had some value).

Tadka Take 2

There are a couple of remarkable highlights in this story. The first one being the universal fact of reputed Brands cheating/harassing/tormenting their consumers–as an acceptable routine, with a discomforting nonchalance. When someone like Today Group resorts to consumer harassment, it is disturbing at more levels than one.

But then again, going by the number of complaints that flood our elder siblings at Akosha against Bagittoday, it doesn’t really look like Today Group takes its reputation too seriously.

The second and the more important point here was unruffled mistreatment and mis-behaviour by company personnel. Last we checked, customer care reps by job description are supposed to be polite.

But then, may be we reside in different worlds.

And it is this rudeness which irks most consumers (as Mr. Singla also pointed out) more than the actual loss or act of cheating.

Now, only if companies realized how effective polite customer care could be in cutting down their litigation costs.

Highlights aside, the moral of this story is fairly simple–Consumer forums do work, if approached right and with conviction. There is help out there, only if the consumers were willing to step up and claim their rights.

Stop shoving the issues under the carpet just to avoid some inconvenience. Raise your issues because unless you do that, there is no hope of them getting resolved as they deserve to be.