Vodafone Idea Asked To Pay Rs 8.5 Lakh In SIM Swap Fraud

Vodafone Idea has been ordered to compensate a bank fraud victim Rs 8.5 lakh for not following “reasonable security” practices in issuing a duplicate SIMcard, which led to the duping. The order was issued by the Maharastra government’s adjudicating officer (information technology). The complaint filed was in June 2015 by a Nashik-based company, Daffodils Furnishing, against IdeaCellular, RBL Bank and ICICI Bank. The principal secretary in the state government plays the role of adjudicating officer.

The case is yet another instance where a bank’s dependence on the registered mobile number for authentication has resulted in a fraud. While the company has argued that issuance of a duplicate SIM is a telecom dispute, the adjudicating authority has held it liable, stating that “a SIM card is an absolute key to a customer’s sensitive and personal information” and that the number can be used to access bank details.

According to the victim’s lawyer, Prashant Mali, who specialises in cyber law, telecom companies should be sensitive about phone numbers being linked to bank accounts. “Telecom companies should make their KYC process strong and if possible, should move to E-KYC,” S V R Srinivas, the adjudicating officer, said in the order. According to the complaint filed by Daffodils Furnishing, Rs 3.3 lakh and Rs 5 lakh were illegally debited from their account in two transactions and the money was transferred to a beneficiary in ICICI Bank. The order, however, notes that it is not established how the fraudsters managed to access the victim’s netbanking. While the banks have said that the complainant might have shared his password or responded to a phishing email, this has not been established. The order also suggested that banks add another layer of security in their communication to customers. Vodafone Idea was held liable because it was established that the application for a duplicate SIM was fraudulent. The name, photograph, date of birth and signature submitted by the fraudster did not match with that of the original. “… the employees of the respondent (Vodafone Idea) made no effort to detect forgery.”

According to security experts, linking mobile numbers to Aadhaar had reduced cases of SIM-swap fraud.

In August 2018, Vodafone India merged with Idea Cellular and was renamed Vodafone Idea.―Times of India