Monday, 8 April 2013

What To Do If Banking Ombudsman Rejects A Complaint of A Failed (Cash Not Received) ATM Transaction (Part-1)

There can be several reasons why Banking Ombudsman may reject a complaint of a failed ATM transaction. The Most important reason is the LACK OF EVIDENCE. Banks submit documents such as EJ/JP Log and Switch Report to the BO both showing the transaction as successful. Their claims are supported by a cash reconciliation statement in which excess cash is reported as "NIL". Recording or preservation of ATM Camera / CCTV camera footage is not made mandatory by RBI so banks do not bother providing the same in most cases saying footage is not available for some technical reason or camera was not working on the day of withdrawal or the complaint is more than 3 months old hence footage cannot be retrieved. The question is - if there is no excess cash and as per system generated reports the transaction is successful, then is the complainant lodging a false complaint? This would also mean that all the complaints of failed ATM withdrawal which are closed by different offices of Banking Ombudsman under clause 13(a) (meaning No Deficiency in Banking Service) were false complaints! I don't believe that. And no victim of a failed ATM transaction will believe that either. Here's what one can do:

Get hold of the documents / video recordings

As earlier suggested by me in in my page How To Deal With A Failed ATM Transaction, you would have called for certain documents such as EJ/JP Log, Switch Report, End of Day Report and Cash Reconciliation/Verification Report, ATM camera / CCTV camera recordings (if available). If you haven't called for these, you can still do. Your bank may hesitate or even refuse to provide you these documents. If your bank or the acquiring bank (if a different bank's ATM was used) may be a public sector bank in which case you can use the Right To Information Act, 2005 to get the information / documents / recordings, etc. that you need. In case the concerned bank happens to be a private bank, Right to Information Act is not applicable them. In such a case, since the issuing bank or acquiring bank would have anyway given these documents / recordings etc. to the Banking Ombudsman which is a public institution, you should send an application under the Right to Information Act to the Banking Ombudsman and obtain these documents / recordings. All Banking Ombudsmen are designated as Central Public Information Officers for their respective jurisdictions by RBI. As such, applications under Right to Information Act should be sent directly to the Banking Ombudsman concerned. If you got the documents, examine everything minutely to find any details that can prove the transaction to be failed or even with a doubtful success.

Please be clear that a complaint closed by a Banking Ombudsman under clause 13(a) or 13(c) is not eligible for any appeal under the Banking Ombudsman Scheme. Rejected complaints of failed ATM transactions are closed under either of these two clauses only. But any material fact observed by you in the documents / recordings, etc. can be used to pursue your complaint before a Consumer Forum or to make a personal complaint before a higher authority in RBI against the Banking Ombudsman.

A Note About Video Recordings

Many times, banks fail to provide ATM camera / CCTV camera recordings even when the complaint has been lodged with the issuing bank, acquiring bank, and the Banking Ombudsman well before the expiry of three months from the date of transaction. Even this 3 month preservation period is not an RBI guideline but more of an industry practice established by ATM suppliers like NCR and DieBold. Video footage many times provides vital clues to deciding whether cash was actually dispensed to the customer or not. Suppose, the video recording clearly shows that the ATM did not dispense any cash but the bank has already claimed the transaction to be successful and even submitted a cash verification report showing excess cash as "NIL", there is a major problem for the bank. Either one of their own employees or an employee of their Cash Management Agency has pocketed excess cash found in the ATM and written a false cash reconciliation report. In such a case, the bank will claim that video footage is not available because of a technical reason or hard disk was full on the date of the transaction or some other non-sense. Effectively, when a bank disputes a genuine failed ATM transaction, they are calling their own customer a LIAR. Please note that failure to preserve ATM camera / CCTV camera recording when the complaint was made to a bank well within three months is a case of a Massive Deficiency In Customer Service. The Banking Ombudsman may not find any deficiency for the reasons best known to him, but a Consumer Forum may see the matter differently. Similarly, claims of technical fault, a full hard disk, etc. are silly excuses that may be accepted by a Banking Ombudsman but not by a Consumer Forum.  

Dealing with the "Profit Minded" banks

There are some newer private sector banks that have not even installed pin hole cameras in their ATMs.  There is an 8 year old bank in this category whose shares are listed on stock exchanges. RTI Act is not applicable to private sector banks, so getting info from them will be tricky. In case of a disputed transaction involving such a bank, one should demand video recording as a customer and if the bank refuses on some pretext, the real reason may be that no camera is installed.

If your complaint is genuine but wrongly claimed by your bank as a false complaint, and rejected by a Banking Ombudsman, you must fight for your rights. For your fight options, See Part-2: What To Do if Banking Ombudsman Rejects A Complaint of A Failed ATM Transaction (Part-2)

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.