Written by George Mathew | Mumbai | Published: December 18, 2019 3:05:59 am According to RBI guidelines, a customer will have zero liability in respect of a fraudulent transaction if there is contributory fraud or negligence on the part of the bank, irrespective of whether or not the transaction is reported by the customer. (File)

The number of complaints relating to ATM and debit cards filed with the Reserve Bank of Indias Ombudsman rose 18.65 per cent to 36,539 during the year ended March 2019 from 24,672 complaints in the previous year. Complaints relating to use of stolen and cloned cards more than doubled to 4,961 (2.53 per cent of the total complaints) in 2018-19 from 2,117 a year ago, data released by the RBI has showed.

However, the RBI did not reveal the amount lost by customers. The actual number of cases relating to ATM, debit cards, stolen and cloned cards will be many times more as only some cases reach the RBIs Ombudsman, said a banking source. Several customers had reportedly complained that money has been fraudulently withdrawn from their accounts even though they possessed their debit cards. In May 2015, the RBI had asked banks to gradually phase out magnetic stripe cards and move to EMV chip cards and set December 31, 2018, as the deadline to tackle the menace of card cloning. However, as some banks have issued EMV cards with magnetic stripes, skimming is still possible, said an official.

According to RBI guidelines, a customer will have zero liability in respect of a fraudulent transaction if there is contributory fraud or negligence on the part of the bank, irrespective of whether or not the transaction is reported by the customer. In case of a third party breach also, where the deficiency lies neither with the bank nor with the customer and the customer informs the bank within 3 working days of receiving communication from the bank regarding the unauthorised transaction, the customer will not be liable. Similarly, customer liability has been capped at Rs 25,000 if a person reports unauthorised transactions within seven working days. However, a bank is free to determine customer liability if such a transaction is reported after seven working days.

Of the total number of ATM and debit cards complaints, a major sub-category was account debited but cash not dispensed by ATMs which accounted for almost 53 per cent of the ATM related complaints, the RBI report on the Ombudsmans scheme said.

While non-observance of fair practices code continued to remain the major ground of complaints during the year, its percentage came down from 22.10 per cent in the previous year to 19.17 per cent in the current year. ATM and debit card issues had increased from 15.08 per cent in last year to 18.65 per cent this year, the report said. According to the RBI, the complaints on the ground relating to digital transactions (mobile, internet, ATM and credit cards) rose by 18,801 to 64,607 complaints and accounted for 32.98 per cent of total complaints, a 6.48 per cent increase in share of complaints over the previous year. This, however, did not include the digital related complaints falling under other grounds under the scheme. The rise in complaints reflects rising popularity of digital modes of transactions, the report said.

Overall, the complaints received at Ombudsmans offices rose by 32,311 taking the total to 1,95,901 in 2018-19 over the previous year (1,63,590), recording a year on year (Y-o-Y) increase of 19.75 per cent. Of these, 72.19 per cent were received electronically through the online portal and by emails as against 63.61 per cent in the previous year. Complaints received on grounds relating to pension, levy of charges without notice, credit card related issues and remittance have declined this year vis-a- vis the previous year. The number of complaints pertaining to mis-selling have gone up from 579 complaints in 2017-18 to 1,115 complaints this year, an increase of 92.57 per cent.

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Stolen, cloned card complaints more than double in FY19: RBI Ombudsman - The Indian Express