1. Legal Points Supporting Your Client’s Case:
(a) Liability of the Bank in Fraudulent Transactions:
Reserve Bank of India (RBI) Guidelines: As per RBI’s circular on “Customer Protection – Limited Liability of a Customer in Unauthorized Electronic Banking Transactions,” the bank must bear the loss if the fraudulent transactions are reported within 3 days of occurrence.
Your client reported the fraudulent transactions immediately to customer care and lodged a cybercrime complaint. This establishes his due diligence and shifts the liability to the bank.
(b) Negligence by the Bank:
The bank failed to prevent unauthorized transactions even after receiving the report. Moreover, their inability to provide evidence of the customer’s authorization for the transactions is a significant lapse.
The bank’s insistence on recovering the fraudulent amounts along with interest constitutes harassment and unfair trade practices.
(c) Breach of Consumer Protection Laws:
Under the Consumer Protection Act, 2019, this situation constitutes “deficiency in service” by the bank. Your client, as a consumer, can claim relief for mental agony, harassment, and financial loss.
(d) Unfair Debt Recovery Practices:
Harassment by recovery agents is prohibited under the Debt Recovery Guidelines issued by the RBI. Your client can claim that the recovery methods employed by the bank were in violation of these guidelines.
- Remedies Available to the Client:
(a) Filing a Complaint in Consumer Forum:
Your client can file a complaint against the bank for deficiency in service and unfair trade practices. Reliefs he can seek include:
Directing the bank to waive the fraudulent transaction amount, interest, and penalty.
Compensation for mental agony, harassment, and legal expenses.
Issuance of a letter stating the closure of the matter to avoid future credit implications.
(b) Civil Suit for Injunction and Damages:
Your client can approach a civil court to:
Restrain the bank from recovering the disputed amount.
Claim damages for negligence and harassment caused by recovery agents.
(c) Complaint to the Banking Ombudsman:
Under the RBI Banking Ombudsman Scheme, your client can file a complaint online if the bank does not resolve the issue satisfactorily within 30 days of his written complaint.
(d) Police Complaint for Harassment:
If recovery agents continue to harass your client, he can lodge a police complaint under relevant provisions of the Indian Penal Code, including Section 503 (criminal intimidation).
(e) Appeal to Cyber Crime Cell:
Your client can challenge the closure of the complaint as “untraceable” by submitting a written representation or re-lodging the complaint with additional evidence.
- How the Court Can Help:
A court can direct the bank to:
Stop recovery actions and waive the fraudulent amount, interest, and charges.
Refund any amounts already recovered.
Ensure compliance with RBI guidelines to safeguard customers from such incidents.
- Advice to the Client:
Preserve all communication (emails, SMS, call logs with customer care, cybercrime complaint details).
Document harassment incidents with evidence like call recordings or visits by recovery agents.
Approach the appropriate forum based on the desired relief.
By leveraging the above remedies, your client has a strong chance of obtaining relief and protecting his rights.