Nagpur woman loses Rs 6.93 lakh in online scam, files complaint against bank, wins back money with 9% interest and additional Rs 35000

After losing nearly Rs 7 lakh in a FedEx parcel scam, a Nagpur-based woman didn’t just sit and mourn her loss, instead, she decided to lodge a complaint against her bank. The legal fight which went on for around 3 years resulted in a victory for the online scam victim.

Not only did the woman got the amount back as compensation, but she will also get 9% interest on the same along with an additional Rs 35,000 as compensation for physical and mental agony, and costs of the complaint.

The District Consumer Disputes Redressal Commission in Nagpur declared that the bank "has committed deficiency in service, negligence, and has adopted unfair trade practices within the meaning of the Consumer Protection Act, 2019."

Nagpur woman loses Rs 6.93 lakh in digital fraud: Here’s what happened and what she did next

On January 8, 2023, at about 11:00 am, the woman (currently living in Gurugram) got a phone call from a person claiming to be from FedEx Customer Service. The caller informed her that an international parcel had been booked in her name and that the parcel contained 2 passports, 5 ATM cards, 300 grams of weed, and a laptop.

When she denied having booked any such parcel, she was told to speak with Mumbai Police and was threatened that her identity had been misused.

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She claimed in her complaint that “by creating fear and intimidation, she was induced to transfer amounts of Rs 95,499, Rs 3,07,939.50, Rs 1,90,000, and Rs 99,999, aggregating to Rs 6,93,437.50, into an ICICI Bank account, towards alleged investigation and processing charges. Notably, the lady also has a bank account with ICICI Bank.

Realising that she had been subjected to fraud, the woman immediately contacted ICICI Bank’s customer care service and registered a complaint. At that time, she was advised to report the matter to the National Cyber Crime Portal.

Why did the woman seek compensation from ICICI Bank?

As asked, she reported the matter on cybercrime.gov.in. Two days later, she also lodged a complaint at the nearest police station at Gurugram. The woman was given a temporary credit (shadow credit), and an entry in that regard was made on January 9, 2023.

Around 2 months later, ICICI Bank informed the woman that she had confirmed the transactions through OTP authentication and that the transactions had been carried out through her registered mobile number. Since debit alerts relating to the transactions had been sent to her registered number, the shadow credit was reversed.

Seeking relief, she approached the Banking Ombudsman, which directed an amount of Rs 1,75,000 (approx 25% of the disputed amount) be credited to her account. The woman stated that the burden of the remaining 75% of the loss was wrongfully cast upon her, adding she suffered loss because ICICI Bank failed to take necessary preventive steps.

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Contending that ICICI Bank “failed to exercise due care and acted negligently”, the woman said she is entitled to compensation and recovery of the amount lost from her account under RBI’s Zero Liability Circular. She further added that ICICI Bank has committed deficiency in service.

What was ICICI Bank’s response to the claims?

The lender denied the allegation that it had failed to exercise due care. It stated that the amount was transferred strictly in accordance with the instructions given by the woman and the transactions authorised by her.

ICICI Bank said that the woman is attempting to shift the consequences of her own mistake upon the bank. "The complainant herself transferred an amount of Rs 6,93,437 to a stranger without making any proper enquiry, and therefore no negligence can be attributed to us," according to ICICI Bank.

It further contended that, in the present era of digital banking, the complainant ought to have exercised due caution before transferring the money. Bank stated that the woman misinterpreted the RBI Zero Liability Circular and is wrongly claiming compensation for a loss arising out of her own negligence.

ET Wealth Online reached out to ICICI Bank for a response regarding this case. However, the bank is yet to respond.

Why consumer commission directed ICICI Bank to compensate the woman?

In its findings, the consumer commission found that the woman maintained her bank account with ICICI Bank and was availing banking services from it. “Consequently, the relationship between the complainant and the Opposite Party is that of a service provider and a consumer of services.”

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The commission examined the observations recorded by the Banking Ombudsman, which reveal that the beneficiary account holder was a retailer engaged in the business of manufacturing plastic products, whose annual income was between Rs 1 lakh and Rs 5 lakh, and annual sales turnover was up to Rs 40 lakh.

It was found that there were no transactions in the beneficiary's account during December 2022, February 2023, and up to March 14, 2023. However, during January 2023, multiple credit and debit transactions amounting to Rs 2.84 crore took place in the said beneficiary's account.

Pointing this out, the consumer commission said “this indicates that inconsistent and unusual transactions had taken place in the said account. Despite this, no immediate action was taken either by the Bank or by the beneficiary bank.” It is the responsibility of the bank to monitor such accounts and take appropriate action, it added,

What did the commission rule?

According to the Nagpur consumer commission, the amount debited from the woman’s account had been transferred to the said beneficiary account (also with ICICI Bank). “The responsibility of placing that account under surveillance squarely rested upon the Opposite Party (ICICI Bank).”

It outlined that a principal reason for the woman being defrauded was that her account was maintained with ICICI Bank, and the account into which the unauthorised or fraudulent person directed her to transfer the money also belonged to another branch of ICICI Bank.

“Under such circumstances, the transaction would ordinarily appear to be genuine and inspire confidence in any reasonable person.”

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An amount of Rs 6,93,437.50 was fraudulently withdrawn from the victim’s bank account. Out of the said amount, 25% was credited back to the complainant's account following the Banking Ombudsman’s direction. The woman also sought the remaining Rs 5,18,437 be given to her, which the commission said is “well-founded and justified”.

How much did the digital fraud victim actually win?

Earlier, the Banking Ombudsman had directed ICICI Bank to credit Rs 1,75,000 to the woman’s account.

Now, the Nagpur consumer commission has ruled that the remaining 75% i.e. Rs 5,18,437 be refunded to the woman with 9% interest.

It has also directed ICICI Bank to pay Rs 25,000 towards compensation for physical and mental agony suffered by her

ICICI Bank has also been asked to pay a sum of Rs 10,000 towards the costs of the proceedings.