Mumbai: A consumer commission ruled that a nationalised bank’s failure to enforce basic security protocols for a senior citizen’s ATM card constituted deficiency in service, leading to the unauthorised depletion of her life savings. Nirmala Malhotra, a 65-year-old Oshiwara homemaker with limited literacy, approached the Maharashtra State Consumer Disputes Redressal Commission after discovering that over Rs 12 lakh had been siphoned from her account through ATM withdrawals and luxury purchases and liquor she never authorised.The commission ordered Bank of India to pay Rs 5 lakh compensation for mental agony and hardship, along with Rs 25,000 in litigation costs. “In cases involving elderly customers with limited literacy, the standard of care expected from the service provider is naturally higher, and strict compliance with safeguards becomes all the more material,” the commission said in a recent order.It further said a bank cannot escape accountability for deficiency in service in failing to ensure a minimum mandatory safeguard—obtaining the account holder’s signature on the ATM card signature band in the presence of officials—despite recording a certification that the same was done.The commission said the signature’s purpose is to affix the identity of the account holder upon the card and to act as a minimum security step to prevent misuse. “If a customer refuses or is unable to sign, the bank is expected either to withhold issuance or to adopt alternative safeguards… If the bank officials had actually taken the complainant’s signature on the card band at that time, the card misuse could have been prevented and she would not have suffered such a huge loss,” it said. The commission held while the bank was not solely responsible for the criminal chain of events, it could not escape accountability for its administrative omissions. The complainant moved the commission in 2015. Malhotra submitted she had studied only until the fourth grade and had minimal literacy. She said she opened a savings account in May 2010. She alleged while the bank’s ‘Welcome Kit’ records and printed acknowledgments suggested she had received an ATM card and signed its signature band in the presence of officials, the bank never actually obtained her signature on the card. In Feb 2011, she discovered her balance of Rs 12 lakh had been exhausted through unauthorised ATM withdrawals and purchases, including gold, electronics, and liquor.A police complaint was lodged, leading to criminal proceedings against one Harishchandra Behere and two bankers.While certain illegally purchased articles were recovered, Malhotra alleged the bank’s failure to exercise a higher degree of caution, given her age and literacy, constituted a foundational breach of trust and security. The bank contended the loss was the result of a third-party criminal act by Behere. It pleaded once an ATM card/PIN is compromised, it cannot be held responsible in the absence of proof of breach of duty attributable to it. “The bank’s omission at the issuance stage substantially increased the vulnerability of the account and facilitated misuse,” the commission said.
