Supreme Court Orders SBI to Refund Cyber Fraud Victim’s Rs 94,000
In a significant ruling, the Supreme Court of India has mandated the State Bank of India (SBI) to refund Rs 94,000 to a victim of cyber fraud from Assam, spotlighting the critical obligation of financial institutions to protect their clients from fraudulent schemes.
The fraud unfolded when the victim attempted to return a Louis Philippe blazer priced at Rs 4,000. A scammer, impersonating a customer service representative, manipulated the victim into downloading a malicious application, siphoning off Rs 94,204 from his SBI savings account. This transfer was executed through multiple UPI transactions, raising alarms about the security of online banking platforms.
Crucially, the fraud was rooted in a 2021 data breach of the Louis Philippe website that exposed sensitive customer information, including the victim’s contact details. As a result, the victim found himself with an unwanted blazer and an emptied bank account.
After timely reporting the unauthorized transactions, the victim faced resistance from SBI, which invoked liability concerns over the use of Google Pay, a third-party application. Determined to seek justice, he pursued legal action through the Gauhati High Court, which swiftly held SBI accountable for failing to act promptly even after being notified of the fraud.
SBI’s appeal to the Supreme Court to overturn the High Court’s decision was ultimately dismissed, with the apex court reiterating the bank’s duty to protect customers. The ruling emphasized that financial institutions must leverage their technical capabilities to prevent fraud and ensure customer safety.
This landmark verdict not only reinforces banks’ responsibilities regarding cyber fraud but also serves as a cautionary tale for customers to remain vigilant when sharing sensitive information online. The case stands as a precedent for future disputes, asserting that victims should not bear the brunt of cybercrime.
