Responsibility and remedies for ATM frauds: The responsibilities and remedies for ATM frauds are below defined by the Disputes Settlement Trust on the basis of the report published in Times of India on 3rd November 2013 with its heading “Frauds tweaked ATM keypads to fool users, held”. The investigation reveals that:-
HOW THE GANGS CHEAT
(1) Cheats insert chip under blank keys located at the bottom of key pad; they use adhesives to keep keys suppressed
(2) One of the cheat waits inside the ATM room for victim
(3) As the user swipes the ATM card and feeds his PIN, the screen goes blank
(4) The cheat inside creates commotion and asks user to hurry
(5) When user leaves, cheats take out chip and complete the transaction
(6) If the ATM demands PIN again, cheats feed it , as one of them has already seen the user key it in.
LEGAL ANGLE OF CHEATING THE BANK CLIENT: The Disputes Settlement Trust has summarized the responsibilities and remedies for such frauds as follows:-
(1) The Bank provided the machine for this operation. Therefore it is prime responsibility of the Bank to ensure that no one is able to do such activity. The manufacturer of the machine is responsible to provide the machines which are not vulnerable to any such attempts. It is the responsibility of the Bank to ensure warranty of machine, safety and security of machine provided to the customers of the Bank. The Bank is responsible to cover their risk with any insurance company against pilferage, tempering of machine, tempering of security of the machine.
(2) The Bank is responsible to ensure that any person other than the customer is not present in the ATM room or any other person is not able to see the customer keying in the password. Bank can insure by keeping trained Security Guards. Bank may increase the number of Guards or a Supervisor to ensure a bunch of ATM machines. e.g. if 3 or 4 ATM machines are provided at one place additional security person trained in such matters may be deployed. The Bank has deployed or not deployed such person, it is totally the responsibility of the Bank.
(3) It is the responsibility of the Bank to ensure more number of ATM machines, where the customers do not get into commotion due to long waiting line to withdraw cash from the ATM machines and therefore all are in a hurry to get to the ATM. If a supervisor is deployed and made responsible the commotion as well as another person seeing a customer keying in PIN can not occur if 2nd person is not allowed until the person inside, do not come out from the ATM room.
THE POSITION OF BANK – IN LAW
The Bank is Services Provider to its customer under the Consumer Protection Act
THE POSITION OF CUSTOMER – IN LAW
The Customer is a Consumer of the services provided by Bank under the Consumer Protection Act
THE POSITION OF TRANSACTION
The customer goes to the ATM to withdraw Cash in good faith thinking safety & security by Bank. The fraud occurs while transacting. The customer, in good faith has performed his part by inserting the ATM card in the machine and keying in the PIN. The Bank has not performed his part of handing over the money to its customer. As far as the customer is concerned, the Bank in connivance with the machine or some one operating, repairing, supervising the machine (Bank) has not given him the money.
RESPONSIBILITY TO PAY & COMPENSATE
The responsibility is of the Bank and remedies to repair the defects of ATM due to frauds is also of the Banks. The Bank is responsible to provide the money & also compensate for any other grievance, indirect loss of reputation of the customer as his faith in the Bank has been shaken.
REMEDIES FOR THE CUSTOMER
The customer in such a case should immediately contact the Bank customer service and inform them and take note of the complaint number, note the time & date and name of the customer service representative of the Bank.
Thereafter, it is prerogative of the customer to file a FIR/Police Complaint by himself or through an Advocate with the local police under whose jurisdiction the fraud has taken place.
Any person aggrieved by such fraud is provided FREE ADVICE by us, if you write below this page.