Sunday, June 7, 2015

Bank Cannot Disclose Customers Data

Bank liable for wrongful disclosure of customer data-Times of India 08 Jun 2015

MUMBAI: A banker is privy to confidential financial information. Hence, he must exercise caution to ensure it does not fall into wrong hands.

Case Study:

Rupa Mahajan Pahwa had a joint savings account with her husband Ajay at Punjab National Bank's Vasant Kunj branch in New Delhi. The account was to be operated by either or survivor. Later, the relationship between Rupa and Ajay soured and they filed for divorce in court.


During court proceedings, Ajay produced a duplicate passbook of her account, and was using it against her. Her inquiries revealed that the bank had handed over a duplicate passbook to a third party at the behest of her husband. An aggrieved Rupa filed a complaint against the bank before the Delhi District Forum. She claimed that her husband had deserted her and their infant daughter, leaving them without any financial support. She was seeking maintenance through the court proceedings. The production of the duplicate passbook in the court by her husband had resulted in revealing all her confidential financial details without her consent. Due to this, she faced humiliation in court, causing her further mental torture and harassment. Besides, it would also drastically affect the amount of maintenance and alimony. She sought a compensation of Rs 7 lakh from the bank.

The district forum observed that the bank had not produced any record to show the identity of the person to whom the passbook had been handed over. The forum concluded that the bank had attempted to manipulate evidence, for which it imposed a penalty of Rs 5,000, payable by the bank to the State Consumer Welfare Legal Aid. The forum also found that Rupa had been subjected to mental agony, harassment and emotional suffering due to the bank's capricious conduct. The bank was directed to pay Rupa a compensation of Rs 1 lakh for the suffering, Rs 30,000 for deficiency in service, and Rs 5,000 as litigation costs.

The bank approached the National Commission in revision. The bank's main contention was that Ajay was a joint account holder. The operating instructions were either or survivor. Ajay had written a letter requesting for a duplicate passbook to be handed over to the bearer of the letter. The bank claimed it could not be fastened with any liability since the duplicate passbook had been issued on the basis of a request .

Rupa, who appeared in person, faulted the bank's reasoning. She pointed out that a duplicate passbook could be issued only when the original is lost or stolen. This criteria was not fulfilled since Ajay's application merely said he was applying for a duplicate as the original was not available with him. Also, the authority to collect the passbook was not given in favour of any specific person, but merely to the bearer of the request letter. Rupa argued that the bank ought to have insisted on an authorization in favour of a specific person, and his signature attested by the account holder, to prevent the passbook from falling into wrong hands.

When confronted with this reasoning, the bank conceded that this was a lapse, but promptly tried to cover it up by arguing that Rs 100 had been debited from the account for issuance of the duplicate passbook, which had been handed over to Ajay's father. The commission observed that there was no authorization in favour of Ajay's father nor was his signature attested in the request letter. In its order of May 28, 2015 delivered by the Bench of Justice D K Jain and Vinay Kumar, the National Commission indicted the bank for trying making a deflective and unconvincing attempt to gloss over a significant lapse. It upheld the state commission's order.

Conclusion:

A bank is liable for failure to safeguard a customer's confidential data.


Consumer wins battle against bank, will receive compensation of 5,000

MARGAO: A consumer has got an order from a district forum against Axis bank to pay him compensation of 5,000 for rejecting his cheque of around 6,000 that was drawn to pay electricity bills.

D J de Souza had approached the district consumer disputes redressal forum, South Goa.

The complainant had issued a cheque in favour of chief electrical engineer for a sum of 6,960 towards the electricity bills. The cheque was drawn on Axis Bank dated June 4, 2014.

According to the complainant, he had to suffer loss due to rejection and had to pay 850 more to the electricity department.

According to the opposite party, the cheques were rejected/returned back to the complainant because of alteration/correction in the cheque.

Forum president, Jayant S Prabhu and members Savita G Kurtarkar and Cynthia Colaco observed, "On close scrutiny of the cheque dated June 4, 2014, we find that there is hardly any alteration carried out by the complainant while issuing the cheque drawn on the chief electrical engineer. According to us, material alteration means the alteration should be such which becomes difficult to read or to interpret the writing done on the instrument. According to us, if the collecting bank can very well read the writings done on the instrument, then there should not be any problem to the clearing bank i.e. the opposite party in clearing the cheque".

The forum held that as the opposite party refused to clear the cheque, the complainant obviously had to suffer and had to pay late payment charges to the electricity department. As such, according to us, there is deficiency in service on the part of the opposite party which eventually left the bill unpaid, the forum said.

The forum stated "The complainant has brought nothing on record to show that he had to pay a sum of 850 as late charges. As such, we are of the opinion that a sum of 5,000 would be adequate to compensate the complainant towards harassment and mental torture."

The complainant would also be entitled towards a sum of 5,000 towards cost of the complaint, the forum directed.

http://timesofindia.indiatimes.com/business/india-business/Bank-liable-for-wrongful-disclosure-of-customer-data/articleshow/47578843.cms

http://timesofindia.indiatimes.com/city/goa/Consumer-wins-battle-against-bank-will-receive-compensation-of-5000/articleshow/47578336.cms