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How to Respond to Online Bank Fraud

Fraud & Identity Featured Article

How to Respond to Online Bank Fraud

July 17, 2017
By Paula Bernier Executive Editor, TMC

Headlines report about the latest online hacks on an almost daily basis. Meanwhile, bad actors regularly try to tap into our financial assets via ATM, mobile and Internet banking, and point of sale intrusions.

To provide customers with assistance on how to react when they notice unauthorized transactions on their financial statements, the Reserve Bank of India has issued some guidelines.

It informs customers that if an unauthorized party has breached their account at no fault of the account holder or the bank, customers are required to notify their bank within three working days of receiving details about that unauthorized transaction. If they do this, the Reserve Bank of India advises, then customers will be free of liability for any loss related to that unauthorized transaction.

Customers also have zero liability related to unrecognized transactions that are due to something the bank did or did not do, according to a Deccan Chronicle piece about The Reserve Bank of India guidelines. In this case, there are no bank notification guidelines or requirements.

In other cases of fraud, whatever the cause or whomever is at fault, if customers report it within four to seven working days they will limit their potential liability, according to the report. In that case, the Reserve Bank of India says, the maximum liability would be within the 5,000 to 25,000 rupee range.

(When bank credits are appropriate, the Reserve Bank of India says that the banks should credit customer accounts for unauthorized electronic transactions within working days of the date they are notified of such situations).

If customers do not report unauthorized transactions within seven working days, however, they will want to refer to their bank’s board-approved policy on what will happen next.

And, of course, if a customer experiences a loss to his or her account due to personal negligence – like sharing accounting details with other parties – they are liable for their loss. The bank holds the burden of proving customer liability in such cases, according to the report.

Edited by Alicia Young

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