President Alvi directs bank to refund lost amount, apologize to victim

ISLAMABAD, July 12 (SABAH): President Dr Arif Alvi has rejected a representation filed by Bank Alfalah Ltd (BAFL) against the decision of Banking Mohtasib directing it to send an apology to a customer for enabling online transaction/payment system on his credit card without his consent and neglecting his timely complaint about a disputed transaction.

Dr Arif Alvi said that when Internet Banking Facility was provided by a bank to its customers, it was incumbent upon the bank to educate its customers about its pros and cons.  He also directed BAFL to refund the lost amount of Rs 66,850 along with the profit to the customer.

The President gave these remarks while deciding upon a case wherein Muhammad Yar (the complainant) had filed a complaint before the Banking Mohtasib stating that he had a Bank Alfalah Credit Card and a scam of Rs.66,850/- occurred on his Credit Card when his card was used at Noon-e-Commerce solution.

He informed the bank that he had not done this transaction and requested to stop this online transaction/payment. The bank had initially reversed this transaction amount but surprisingly after six months, the bank had deducted this amount from his Credit Card.

Feeling aggrieved, he escalated his complaint before the Banking Mohtasib which directed BAFL to refund the lost amount. The Bank, then, filed a representation with the President against the decision of the Mohtasib.

The President held a personal hearing of the case and rejected the representation of the bank. In his decision, he noted that the complainant was not conversant with Internet/Digital Banking and became aware of the transaction on receipt of a call from the bank’s real-time Monitoring Unit wherein he told the Bank’s representative that he did not perform the disputed transaction.

He added that the bank was duty-bound to take care of its customer’s interest by instantly reporting the unauthorized/fake transaction, instead, it waited for the lodgement of a formal complaint. He observed that when BAFL was advised to submit the SMS or e-mail through which OTP was delivered to the customer, BAFL failed to submit the required information even after continuous follow-up. “Non-submission of information/document of vital evidence reflects that either the Bank does not have the record or the OTP was not sent”, he said.

President Alvi further pointed out that BAFL was found non-compliant with various regulations/directions of the State Bank of Pakistan which made it incumbent upon the bank to fully inform the customer about the Electronic Funds Transfer facility in plain language, besides obtaining the customer’s consent before the start of such facility.

He concluded that since BAFL failed to controvert the claim of the complainant and the findings of the Banking Mohtasib, failed to discharge the burden and statutory liability cast upon it under the law and could not establish that the internet banking facility was activated with the consent of the complainant, therefore, the representation of the Bank was devoid of merit and deserved to be rejected.

Dr Arif Alvi hence, directed BAFL to send an apology to the customer and return him the lost amount along with the profit.