Saturday, 6 April 2013

How To Deal With a Failed (Cash Not Received) ATM Transaction in India

More often than not, a failed ATM transaction in India results in total loss of the money involved in the transaction. Ideally, the amount of a failed ATM transaction is supposed to be credited back into the account of the complainant by the issuing bank (the bank that issued the ATM card to the customer) within seven days from the date of the complaint. Any delay beyond 7 days results in the levy of penalty on the issuing bank at the rate of Rs. 100 per day of delay beyond 7 days of complaint provided the customer has filed the complaint within 30 days of the date of failed ATM transaction. In real life, leave alone the penalty, the customer does not even get back the money lost in the failed transaction. In such a scenario, it is of utmost importance for the customers themselves to take certain steps to safeguard their interest. Here's an indicative list of steps involved in dealing with a Failed ATM Transaction in India:

1. Make A Note of Transaction Details

The customer needs to make written notes of the following particulars:

(i) Name of the Issuing Bank and Branch
(ii) Name of the Acquiring Bank and Branch Name or ATM Location (Bank whose ATM was used for the transaction)
(iii) Date and time of the transaction
(iv) Amount of attempted withdrawal
(v) Preserve transaction slip. Also take a photocopy of the transaction slip. This is important because ATM transaction slips are thermal prints that begin to fade after a few days. Here I would also like to suggest that while making an ATM withdrawal, if the ATM screen tells you that transaction slip cannot be printed because of whatever reason and asks you if you wish to continue with the withdrawal, it is best to abort the transaction and go to another ATM. Transaction slip is important record that will help you in dealing with a failed ATM transaction.

2. Lodge complaints in Writing

Victim of a failed ATM transaction should lodge written complaints immediately giving particulars of the transaction and asking for details/documents (detailed below) from the banks at the following places:

(i) Acquiring Bank Branch (The branch that controls the ATM that was used)

Acquiring bank is different from the issuing bank when, for example, your account is with SBI and you used the ATM of Punjab National Bank, SBI will be the issuing bank and PNB will be the acquiring bank. Submit the complaint and take acknowledgement on your copy of the complaint. It is very likely that acquiring bank officials will tell you to go to the issuing bank for lodging your complaint or may tell you that you should wait for a few days for the amount of failed transaction to be automatically credited back into your account. DON'T LISTEN TO THEM. Go to the branch manager if necessary. If despite all your efforts, acquiring bank officials refuse to accept your complaint, note down the names and designations of the officials your spoke to and send your complaint by Registered Post to the acquiring bank branch and a copy to their head office mentioning the names of officials who refused to accept your complaint. Carefully preserve a copy of the complaint and post office receipt.

(ii) Issuing Bank Branch

Follow the same complete process as suggested above in case of Acquiring Bank. It is a habit among issuing bank officials to tell victims of failed ATM transactions that there is no need to file a complaint and the amount of failed transaction gets automatically credited to the account within seven days. They may also tell you to make your complaint on telephone to their helpline. If you are told like that, you should know that an ignorant and unconcerned bank official is trying to misguide you. There is nothing wrong with making a telephonic complaint to their helpline and obtaining a complaint number but filing a written complaint immediately is an absolute must to protect your legal rights. Insist on filing a complaint immediately and if needed, send the complaint by registered post as suggested above.

3. Don't Delay

Be very clear about why filing the complaint immediately is important. The bank will preserve crucial evidence like ATM camera video recording / CCTV footage for a maximum of three months from the date of transaction. In most cases of failed ATM transactions, it becomes necessary to lodge a complaint with Banking Ombudsman who will accept your complaint only one month after you filed a written complaint with your bank. As such, delaying your complaint to your bank will delay your complaint before Banking Ombudsman eventually leaving very little time before the expiry of three months.

4. Details / Documents to be asked for in the complaint

While lodging complaint of a failed ATM transaction, the customer should ask for the following details from the bank:

(i) Copy of your account statement showing the disputed transaction
(ii) Copy of EJ/JP Log (Electronic Journal / Journal Print) of your transaction. This is a record that is generated by an ATM of all transactions including balance enquiries for all failed or successful transactions.
(iii) EOD Report (End of Day Reconciliation Report) and Cash Verification Report of the ATM for the date of transaction
(iv) ATM camera and CCTV camera recordings for your transaction on a CD/DVD
(v) Switch Report of your transaction

5. Use Right To Information Act

In case your bank does not provide the documents asked for by you and the bank happens to be a public sector bank, do not hesitate in using Right to Information Act to get the documents and recordings.

6. What Next

There are two possibilities: (1) The bank will refund the amount of disputed transaction within 7-10 days or (2) The bank will claim the transaction to be successful and refuse to give a refund. In the later case, insist and obtain the documents/recordings your asked for along with your complaint. Approach Banking Ombudsman first and later if required, a Consumer Forum. Do not go to a Consumer Forum without first complaining to Banking Ombudsman. The reason is explained in these pages: Lodging Complaint of Failed ATM Transaction To Banking Ombudsman and What to do if Banking Ombudsman Rejects an ATM Complaint

Also see: Arbitration and Appeals for Bank ATM Complaints  

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All information given in this blog is obtained from sources in the public domain, RTI applications, discussions with bankers, bank customers in India and also with some employees of Reserve Bank of India having knowledge of the working of various Offices of Banking Ombudsman in India. All information in this blog is presented on a best effort basis and is not claimed to be complete information on any of the subjects covered in this blog. Use of any information given in this blog is purely voluntary on the part of the readers. Author of this blog does not assume any responsibility for any action of the readers related to any matter discussed in this blog or any consequences thereof. Readers of this blog are advised to consult a legal practitioner before taking any action related to any matter discussed in this blog.