SIM Swap Fraud Remedy via Consumer Courts

SIM Swap Fraud Remedy via Consumer Courts
By Prashant Mali

Case No. 1 : Positive order
BSNL Bengaluru and the Union Bank of India have been ordered to pay Rs 9.6 lakh to a businessman after fraudsters siphoned off money from his bank account in what was described as a sim swap fraud. The national telecom provider was pulled up for issuing a duplicate sim to fraudsters without adhering to Know Your Customer (KYC) norms and the bank for not alerting the customer on time. Nagarathpet resident Ramesh Kumar has been using a mobile phone with a BSNL sim card for many years and had linked it to his account at Union Bank of India’s BVK Iyengar Road branch. On September 22, 2015, Kumar checked his email to find that an unknown beneficiary had been added to his online bank account. By the time he could alert bank authorities about the breach, the fraudsters managed to transfer Rs 9,62,700 from his account. The sim card on his cellphone that was supposed to receive a one-time password (OTP) mysteriously remained de-activated all the while. The 52-year-old businessman lodged a complaint with his bank branch and the cybercrime wing of Bengaluru police only to realise he had fallen prey to a sim swap fraud.
With neither the Union Bank of India nor BSNL acting towards compensating his loss for months, Kumar approached the Bangalore urban 2nd additional district consumer disputes redressal forum on May 5, 2016 to reclaim his money. The consumer forum heard the case in which BSNL and Union Bank of India blamed each other for facilitating the fraud. BSNL claimed it is only a service provider and wasn’t aware that Kumar had linked his cellphone number to his bank account, and that it was the bank’s responsibility to notify him immediately when there was a fraudulent attempt. The bank argued that a BSNL customer centre executive in KG Road was at fault for issuing a duplicate sim card to a fraudster who pretended to be Kumar, deactivated his existing sim card and obtained a replacement. 

After 31 months of hearing, the court blasted BSNL and Union Bank of India for the loss their customer suffered. The judges pointed to the BSNL staffer’s carelessness in issuing a duplicate sim and deactivating Kumar’s original sim. They criticised Union Bank of India authorities for not immediately alerting the customer on the illegal addition of a beneficiary, which he came to know through an official email. In a verdict pronounced last month, 
the forum ordered BSNL Bengaluru telecom district and Union Bank of India, BVK Iyengar Road branch, to jointly refund Rs 9,62,700 to Kumar with interest and an additional Rs 10,000 towards his court expenses within 45 days. What is it Fraudsters, armed with confidential bank details of customers, deactivate sim cards linked to bank accounts by impersonating the victims and submitting fake documents with cellphone service providers and obtaining duplicate sims. The original sims on the victims’ phones get deactivated in the process. The active duplicate sims with the fraudsters receive OTPs and other bank communications, enabling illegal online transfers of large sums of money, while the victims remain clueless.

Prashant Mali
Lawyer, Bombay High Court
+919821763157 | cyberlawconsulting@gmail.com