ATM Fraud – List of Customers Liability

Check out the list of liabilites for customers if their ATM cards defrauded. RBI has advised banks to improve and upgrade their ATM security software against recent frauds like skimming and phishing. RBI has pointed out that banks have not taken steps to secure ATMs running on old software despite being warned about these in April, 2017. 

Read – Banks to Upgrade ATMs With New Security Software By 30th June 2019

Banks have still not made their ATMs full secure and skimming-proof thereby exposing customer to the risk of fraud.

Being a customer, you must know , what you can do if your card gets skimmed and you lose money.

Zero liability of a customer 

1. If the fraud happens due to the bank’s negligence  for example, if there is a glitch at the backend/software of the bank where customer details are compromised or if bank staff disclose these details to third parties, then you will not be liable to pay.
2. The RBI’s guidelines states that if a ‘third-party’ breach happens when neither the bank nor the customer is at fault, and the customer informs the bank within three working days, the customer is not liable to pay. 
3.  If a third-party breach can happen at an ATM through skimming, card trapping, Pharming etc.  by using public Wi-Fi, malware in ATMs or bank servers, at merchant outlets where you swipe your credit or debit card, or even on your own computer, the customer is not liable to pay.

Read – Tutorial – How To Report Bank’s Fraud Cases to CBI ?

if you report it to the bank before seven working days (and after three days) from receiving the debit message, the RBI notification says that the per transaction liability of the customer will be limited to the transaction value or an amount set by the central bank, whichever is lower. And if you take more than seven days, “the customer liability shall be determined as per the bank’s Board approved policy,” says the RBI notification. 

What Customer needs to do ?

1. Take the SMS alerts services of the bank
2. Report the banks about fraud within stipulated time frame i.e. before seven working days and after three days from receiving the debit message
3. Transaction liability of the customer will be limited to the transaction value or an amount set by RBI, whichever is lower.
4. If complaint is filled after more than seven days, “the customer liability shall be determined as per the bank’s Board approved policy. This will differe in different banks.

How long will bank take for the reversal of amount ? 

1. As per the guidelines, Banks have to credit or reverse the unauthorised electronic transaction to the customer’s account within 10 working days from the date of notification by the customer.
2.  Bank must ensure that there should not be any interest loss if the fraud is reported within time frame. 
3. In case of credit card fraud, the customer should not have to additional burden of interest. 
4. Credit card fraud must be resolved by the bank within 90 days from the date of receipt of the complaint.