ICICI Bank: A woman was defrauded of lakhs of rupees through a fake parcel scam. She subsequently filed a lawsuit against the bank. Find out who reimburses the money lost in the fraud.

If money is lost in online fraud, will the bank compensate?

Online Fraud Case: If a customer becomes a victim of online fraud, is the customer solely responsible for any losses? It's generally believed that if a person personally sends money to the fraudster or shares their OTP, the bank is not responsible. However, a recent ruling by the Nagpur District Consumer Court has questioned this notion.

The court has ordered ICICI Bank to return over ₹5.18 lakh to a woman. It also ordered the bank to pay 9% annual interest, ₹25,000 as compensation for mental distress, and ₹10,000 as litigation costs.

Fraud in the name of FedEx

The incident dates back to January 8, 2023. A man called a woman living in Gurugram and identified himself as a FedEx employee. He claimed to have received a parcel sent abroad in her name, containing two passports, five ATM cards, 300 grams of marijuana, and a laptop.

When the woman refused to send the parcel, she was threatened that her identity had been misused and that police action could be taken against her. Out of fear, she sent a total of 693,437.50 through four separate transactions to the ICICI Bank account provided by the fraudsters.

What did the bank do?

Upon discovering the fraud, the woman contacted the bank and filed a complaint on the cybercrime portal. She also filed a police complaint. The bank initially deposited some of the money back into her account, but later removed it. The bank stated that all transactions were validated with an OTP.

The woman then complained to a banking officer. She was instructed to refund approximately 25% of the amount. However, she approached the consumer court for the remaining ₹518,437.

Why did the court hold the bank responsible?

ICICI Bank argued that the customer himself had initiated the transactions using the OTP. However, the court rejected the bank's argument. The court stated that the bank should monitor suspicious transactions occurring in a customer's account that are not normal.

According to the court, the bank failed to monitor suspicious transactions and take timely action after becoming aware of the fraud. Based on this, the bank was held responsible for deficiency in service and negligence.

The court ordered ICICI Bank to pay ₹518,437, 9% annual interest, ₹25,000 in compensation, and ₹10,000 in litigation costs. The bank must comply with the order within 45 days.