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Digital Payments and Risks

Consumer confidence is a key determinant for ensuring growth of digital payment industry. Frauds are bound to dent consumer confidence which includes Phishing Frauds. Fraudsters dupe customers through SMS/emails/phone calls to provide sensitive information such as PINS/passwords that may lead to misappropriation of funds from wallets.
The Indian Express reported on September 2018 that hackers posing as bank officials received OTP numbers from customers and added it to their own e-wallet details of the customer's profile to route the refunds of bank customers.
In another instance a mobile repairer sent money from a payment app. installed on the phone given to him for repairing (without the SIM), the vendor duped the customer of INR 91,000.  (India Today dated 05/November, 2018).
Business Standards reports it was by presenting fake documents of bank customers accused had obtained duplicate SIM cards of mobile phones and transferred money to different wallets and then withdrawn from ATM. (Business Standard dated the 05/November,2018).

How to lodge a complaint if you have been a victim of fraudulent transaction?

Fraudulent transaction in your bank account? You can limit your loss by notifying your bank immediately. For more details, give a missed call on 14440.

IVRS on Customer Liability in Unauthorised Electronic Banking Transactions

  • If someone has fraudulently withdrawn money from your bank account, inform your bank immediately.
  • Take the acknowledgement from your bank.
  • The bank has to resolve your complaint within 90 days from the date of receipt.
  • If the transaction has happened because of your negligence, that is, because of your sharing your password, PIN, OTP, etc., you will have to bear the loss till you report it to your bank.
  • If the fraudulent transactions continue even after you have informed the bank, your bank will have to reimburse the amount.
  • If you delay the reporting, your loss will increase and it will be decided based on the RBI guidelines and the policy approved by your bank's board.

Source: RBI

One of the popular modes of electronic payments is Prepaid Payment Instruments (PPI)/ payment wallet. There are risks for the financial systems,   particularly the vulnerable consumers such as the low income group that are often beneficiaries of financial schemes. Customer of mobile wallet is Not Liable if proved that Transaction is unauthorised
If an unauthorized transaction takes place from the customer's mobile wallet due to negligence of PPI issued, then in that case the Customer had NO Liability. As popularly understood the liability is ZERO. (ET Online dated the 07/Jan/2019).
RBI had issued consumer protection rules for mobile wallets. The RBI also issued guidelines limiting Consumer's liability in case of unauthorised transactions that have taken place from their mobile wallets. As per guidelines the PPI issuer will be required to provide a contact number and/or email id in transaction alert SMS through which consumer can request the unauthorised transaction or notify objections. This is as per the guidelines issued by RBI circular dated the January 4, 2019 to PPI issuers such as Paytm, Amazon Pay, Phone Pe. It confirms that in case of unauthorised transactions the customer of the card will not be liable.
On the other hand where a transaction has occurred due to negligence by the customer then the customer shall have to bear the loss until he or she reports the unauthorised transaction to the PPI issuer. As in debit/credit cards if the loss occurs even after reporting the unauthorized transaction then the loss shall be borne by the PPI issuer. The burden of proving customer liability in case of unauthorized transaction lies with the PPI issuer.
It is important to refer to Dr.Prem Anand, Secretary ,Cyber Society India the basic concepts of commerce , e-commerce and problems associated with e-commerce including consumer's risks , merchant's risks and cyber hijacking amongst other issues.
The internet, Dr.Anand said, can be insecure for online transaction throwing light on e-payments and cloud storage. Dr. Prem Anand endured the significant advancement made towards ensuring cyber security such as Secured Socket Layer (SSL), Mondex (Mondex is a smart card plastic currency micropayments (a very small payment made online), net bills.
The types of cyber frauds including social engineering malware is specifically designed to disrupt, damage or gain, authorize access to a computer system.
For us to benefit from the digital economy and make use of the reach that the internet provides there are many aspects which need to be ironed out. Many issues may traditionally fall under the ambit of the State Governments. States have been given constitutional mandated rights to administering certain areas. It is important to acknowledge that e- commerce (when it takes place within the country) falls under the category of inter-state trade and commerce. Thus, it has been allocated to the Centre under Schedule VII of the Constitution. It is hence the responsibility of the Centre to ensure its growth and make rules therefore.

Divya Patwal


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