President Provides Relief to Citizens in Bank Fraud Cases Worth Rs. 1.9 million

President Provides Relief to Citizens in Bank Fraud Cases Worth Rs. 1.9 million in 2022

President Dr. Arif Alvi has provided relief to two victims of bank fraud by ordering Bank Alfalah Ltd (BAL) to refund the defrauded amount of Rs. 1.9 million to the respective account holders.

The President also directed the bank to educate its customers about internet banking, digital financial services, and other security measures to protect account holders from banking fraud.

Muhammad Shahzad, a Bank Alfalah Ltd (BAL) account holder in Lahore, attempted to withdraw funds from an ATM, but the cash was not dispensed, although he had a sufficient balance in his account. Further investigation revealed that an amount of Rs. 1.479 million had been withdrawn from his account without authorization.

The bank was discovered to have activated the Electronic Funds Transfer (EFT) facility following a phone call from the customer’s registered phone number. The funds were then transferred from his account to other beneficiary accounts. Shahzad filed a complaint with the bank, but his issue was not resolved.

Similarly, Asma Attiq, a BAL Gujranwala account holder, was defrauded when she received a call from the bank’s helpline. She gave the caller her personal information, and an amount of Rs. 499,400 was withdrawn from her account without her knowledge.

She also requested a refund from the bank, but the bank did not return her money. Both complainants approached the Banking Mohtasib of Pakistan (BMP) separately to seek redress for their complaints, and the BMP ordered the bank to refund their lost money. In both cases, the bank challenged BMP’s decisions by filing separate representations with the President.

Hearings were held in both cases. The bank argued that because both customers had shared their personal banking information with unknown individuals, the bank was not liable for any money lost.

The President denied this request because the bank had activated the Electronic Funds Transfer (EFT) facility without the account holders’ consent/request. He emphasized that it was the primary responsibility of banks to protect their customers’ interests. The systems put in place to do so were not robust enough and needed to be revised and strengthened.

The bank was also found negligent and non-compliant with the rules and regulations of the State Bank of Pakistan (SBP) for failing to educate customers about the benefits and drawbacks of the EFT facility before activating the channel, according to the President.

He noted that the bank could not produce any document/evidence demonstrating that they had complied with the provisions of relevant SBP laws, rules, and regulations. The bank’s violation of rules and regulations established malpractice, according to the President, and the loss of money could have been avoided if the bank had not made the EFT facility operational without their consent.

‘The Bank was given ample opportunity to refute the complainants’ claims and the BMP’s findings, but no justification was provided to overturn the Mohtasib’s original decisions,’ the President stated.

He went on to say that because no flaws could be found in the Mohtasib’s original decisions, the bank’s representations were rejected.

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