Fraudulent Online Transactions: Liability Of Banks!!

On 21st December, 2020 in National consumer Disputes Redressal Commission (NCDRC), the Hon'ble Presiding Member, Mr. C Viswanath dismissed the Revision Petition¹ filed under Section 21 (b) of the Consumer Protection Act, 1986 by HDFC Bank and held that the bank will be liable to pay to its customers in case of unauthorized transactions. Thus, the banks must compensate to its account holders in case of fraudulent transactions in the absence of any evidence to substantiate its stand that the fault was on the part of the account holder and in today's digital age, the possibility that the credit card was hacked or forged cannot be ruled out.

Brief facts of the case

The respondent purchased a pre-paid Forex Plus Debit from the petitioner bank in 2007 and the fraud took place in 2008. The respondent's father got a call from the Credit Card Division of petitioner for confirming the transaction attempted by the respondent's card. After verifying the same from