ISLAMABAD
\nWhile directing United Bank Ltd (UBL) to refund defrauded amount along with profit to a fraud victim, President Dr Arif Alvi has asked banks to remove the inherent flaws in their systems to prevent online fraud and fraudulent transactions, and educate their customers about the pros and cons of online funds transfer facility before activating digital banking.
\nHe urged banks to comply with the relevant rules and regulations of the State Bank of Pakistan (SBP) regarding online funds transfer facility, customer consent and authentication of transactions.
\nThe President also asked the Banking Mohtasib Pakistan (BMP) to approach SBP and other banks that on the rejection of a complaint of a bank customer about a disputed transaction, the customer should be informed in a simple letter that they could approach the institution of BMP for relief.
\nThe President gave these remarks while deciding upon a representation filed by UBL against the decision of BMP directing it to refund Rs 79,500 to Mr Abudl Rauf (the complainant), whose account was fraudulently debited through the Inter-Bank Funds Transfer (IBFT) facility.
\nThe complainant had received a call from a phone number similar to the bank\u2019s helpline, and the caller introduced himself as the bank\u2019s representative and asked for his banking details\/credentials, which he provided. Later, his account was debited with a total amount of Rs 79,500 through IBFT even though he had never activated the Internet Banking Facility.
\nHe approached the bank to retrieve his lost amount but to no avail. Feeling aggrieved, he raised the matter with BMP, which passed the orders in his favour. The bank, then, filed a representation with the President against BMP\u2019s decision.
\nBefore deciding upon the representation, the President held a hearing of the case, at Aiwan-e-Sadr, in which the complainant and UBL\u2019s representative appeared. UBL\u2019s representative contended that 16 transactions of multiple small amounts were conducted from the complainant\u2019s bank account.
\nHe further said that the complainant should have kept his personal credentials secure and the bank could not be held responsible for the disputed transactions as the customer himself shared his banking information with the caller.
\nThe President pointed out that the Bank was confusing two different steps with each other as the first step was obtaining the customer\u2019s consent for availing IBFT facility and the second step was the customer\u2019s authentication before conducting the banking transaction.
\nHe said that the bank had opened this channel without the customer\u2019s consent, without informing him about the pros and cons of the facility, even though he was not familiar with digital banking. He added that without the default opening of the IBFT facility, the fraud would not have been possible.
\nIn his decision, the President held that the Bank did not comply with SBP\u2019s directives which made it clear that customer consent had to be obtained, and non-compliance on UBL\u2019s part amounted to maladministration.
\nHe, therefore, rejected the bank\u2019s representation and further asked UBL to improve its system and provide information to customers at the time of opening the bank accounts. He directed UBL to refund Rs 79,500 to the customer along with the profit within 30 days.<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD While directing United Bank Ltd (UBL) to refund defrauded amount along with profit to a fraud victim, President Dr Arif Alvi has asked banks to remove the inherent flaws in their systems to prevent online fraud and fraudulent transactions, and educate their customers about the pros and cons of online funds transfer facility before […]<\/p>\n","protected":false},"author":2,"featured_media":346864,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-347246","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n