ATM Fraud Case: SBI Fails to Provide CCTV Proof, Consumer Commission Upholds Rs 1.30 Lakh Compensation

A Delhi consumer commission has upheld an order directing State Bank of India (SBI) to pay Rs 1.30 lakh to a customer after four unauthorised ATM withdrawals and two fund transfers were made from his account in 2018. The bank was also asked to pay compensation for mental agony and litigation costs.

How the money was withdrawn

The customer had held an SBI account since 2002, where his salary as a government school lab assistant was credited.

On October 10, 2018, he withdrew Rs 5,000, leaving Rs 1,12,472 in his account. Another Rs 17,540 was credited the next day, taking the balance to Rs 1,30,012.

But on October 22, when he tried to withdraw cash, the transaction failed due to insufficient balance. After updating his passbook, he discovered that Rs 20,000 had been withdrawn four times from his account on October 12, totalling Rs 80,000.

The passbook also showed two transfers of Rs 40,000 and Rs 10,000 to an account belonging to a person named Sonu.

Customer complained to bank and police

The customer immediately approached SBI on October 22 and submitted a written complaint seeking recovery of the money. He also filed an FIR at Mayur Vihar Phase-I police station.

After receiving no satisfactory response, he again wrote to the bank on March 6, 2019. He eventually approached the consumer commission.

The District Consumer Commission found fault with SBI for failing to preserve and produce CCTV footage of the disputed ATM transactions. It also noted that the bank had not explained the two transfers.

Why SBI's appeal was rejected

The Delhi State Consumer Disputes Redressal Commission, in its August 10 order, observed that the customer had reported the disputed transactions without delay and had specifically asked SBI to verify them and provide CCTV footage.

However, the bank neither secured nor produced the footage before the district commission or the state commission.

The commission also pointed out that SBI had access to electronic transaction logs, ATM journals, switch records and authentication details. These records could have helped establish whether the transactions were genuinely authorised, but the bank failed to produce them.

The customer had also stated that his debit card was never lost or given to anyone else. The commission said SBI should therefore have examined whether the transactions could have resulted from card cloning, skimming, ATM compromise or another technical issue.

Bank failed to explain Rs 50,000 transfers

The commission also considered the two transfers of Rs 40,000 and Rs 10,000.

The customer denied visiting the bank branch or authorising these transactions. The commission said SBI should have produced debit slips, transfer vouchers or other documents to establish that the transfers were authorised.

Since the bank failed to provide these records, the commission agreed that there was a deficiency in service.

It also noted that SBI had received written complaints from the customer in October 2018 and March 2019 but failed to conduct a meaningful investigation or give a satisfactory response.

SBI to pay Rs 1.30 lakh with interest

The state commission upheld the District Commission's August 21, 2023 order.

SBI has been directed to pay:

• Rs 1.30 lakh towards the disputed amount
• 6% annual interest from October 12, 2018
• Rs 5,000 for mental agony
• Rs 5,000 towards litigation costs

The ruling highlights the importance of banks preserving transaction records and investigating disputed ATM and fund-transfer transactions when customers promptly report unauthorised activity.