A consumer commission in Kerala has ordered a Rs 70,000 payout over a disputed ATM transaction. The incident took place in 2014 — with Rs 10,000 debited from the customer’s account even though the machine did not dispense cash. The bank had claimed the transaction was successful and rejected the claim.
According to an Indian Express report, the Thrissur District Consumer Commission found that ATM electronic records did not show the disputed transaction. President CT Babu and members Sreeja S and Ram Mohan R heard the complaint before delivering its order last week. They also found that the bank had failed to properly resolve the issue.
“Instead of resolving the grievance on the basis of proper verification and supporting records, the 1st opposite party (bank) rejected the claim without producing convincing evidence regarding the successful dispensation of cash,” the order noted..
The Commission added that the conduct of the bank had caused “considerable mental agony, inconvenience, financial hardship, and loss to the complainant” while ordering compensation.
ATM fails to dispense cash
The incident took place on March 1, 2015 as the Kerala man tried to withdraw Rs 10,000 from an ATM operated by another bank. The transaction was initiated, but the machine failed to dispense the cash. However the man found that Rs 10,000 had been debited from his bank account.
A legal notice was issued in March the next year to resolve the matter. But the bank had failed to address the grievance — prompting the customer to approach the Consumer Commission and seek a refund. He also sought compensation for the hardship caused to him, alleging a deficiency in service and negligence by the bank.
Meanwhile the bank in question claimed that the transaction had gone through. It submitted account records contending that Rs 10,000 had indeed been withdrawn through the ATM transaction in question. It added that the matter had been investigated after the initial complaint was raised, and the transaction was found to be successful.
Commission orders Rs 70,000 payout
The Commission had upheld the customer’s side — noting that the bank was responsible for grievance redressal after the amount had been debited. It added that the bank in question was responsible for solving a possible technical issue with the ATM operated by another bank. The commission reiterated that a customer could not be expected to independently prove technical problems in the inter-bank ATM system.
“The complainant, being an account holder and consumer of the 1st opposite party bank, was legitimately entitled to fair, transparent, and efficient banking service,” Indian Express quoted the order as saying.
The Commission found that the bank had failed to properly investigate and reconcile the disputed ATM transaction and could not prove that the man had actually received the money.
It also said that the seriousness of the deficiency and the prolonged failure in resolving the matter justified an amount higher than the Rs 10,000 sought by the man. As such, it directed the bank to repay the original amount as well as Rs 50,000 to compensate the financial loss and inconvenience caused and another Rs 10,000 towards litigation costs. The bank was asked to comply within one month.
Significance of the verdict
The Kerala consumer court ruling can act as a reference point for consumers facing similar issues. It highlights that when a customer’s account is debited in a failed ATM transaction, the bank holding the account cannot simply reject the complaint by pointing to a technical dispute with another bank.
A full investigation is necessary to investigate the transaction, resolve the issue with the other bank and ensure that the customer’s money is protected. The onus for these steps also remains with the bank.
For consumer-related grievances, individuals can contact the consumer helpline in their respective states and Union territories (Kerala: 1800-425-1550) or call the National Consumer Helpline at 1915 for assistance.