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Maharashtra: Telecom Firm, Bank Ordered To Give Rs 18 Lakh Payout

Vodafone and Bank of India have been ordered to pay Rs 15 lakh and Rs 3.5 lakh, respectively, to a Nagpur businessman for lapses that caused him to lose Rs 18.5 lakh to fraudsters. The order was passed by Maharashtra’s information technology department and upheld by the Delhi-headquartered Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

On August 22, 2015 businessman Sandeep Singhal’s wife found that though his cellphone was switched off for a while, a transaction of Rs 18.5 lakh had fraudulently occurred in that duration through net banking. Singhal immediately approached the bank, which froze his account. Four days later, there was an attempt to debit Rs 11.5 lakh from his account, but the bank reverted the entry and closed the account.

A police investigation showed that Singhal’s cellphone was hacked from an IP address traced to Nigeria (the address could have originated there or could have been mirrored by hackers to reflect Nigeria as the country of origin).

Singhal sought a refund of the lost amount, stating that the immediate reason for the incident appeared to be the issue of a duplicate SIM card by Vofadone to someone else without conducting a proper KYC verification of the customer.

Singhal also stated that even the bank didn’t conduct procedures properly while money was being debited from his account.

He sought that Vodafone compensate him for the loss. The bank too blamed Vodafone, saying Singhal fell victim to fraud “because of Vodafone’s negligence” in issuing a duplicate SIM card without verifying the applicant’s details.

In its written submission, Vodafone stated that the application for SIM card replacement was processed as per existing provisions. It stated that the duplicate SIM card was issued in good faith and was a measure for quick redress of consumer grievance.

The company also stated it was not aware of the hacking episode and so would not be in a position to respond with respect to that.

In his order, principal secretary (information technology) SVR Srinivas said, “The loss was caused to Singhal due to the issue of a duplicate SIM card without following KYC norms. The signature of Singhal and that of the imposter should have been properly tallied. This does not seem to have been done by Vodafone. Because of the SIM, money was transferred to the imposter. So far as the bank is concerned, it seems to have followed norms, but there seems to have been a delay in freezing the account. This delay led to financial loss. In addition, the fact that the IP address was based in Nigeria went unnoticed by Bank of India.”

As an adjudicating officer under the Information Technology Act, Srinivas is entrusted with quasi-judicial powers for hearing cyber appeals.―Times of India

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