In these matters one cannot go by the fine text in the rules and regulations that one is made to sign while taking an ATM card from the bank. The reasons for this are as follows. The first is that the ATM premises is to be interpreted as bank premises and considering the ATM machine is a bank machine through which the fraud occurred, the bank is completely liable. Secondly, the media reports on the incident indicate that two devices were possibly installed to siphon off the information. One, the skimming device that read off the data on the magnetic stripe on the back of the card and the other was the camera that recorded the PIN of the users when they used their card at the ATM for legitimate purposes.
Is the Bank not liable for having failed to stop the installation of these unauthorized devices by scamsters in the ATM premises of the bank? Further is the Bank not liable for regular monitoring of their premises and sanitize them against installation of these foreign devices that contribute to a fraud being perpetrated on their customers?
Thirdly, there should have been some additional method to identify that the ATM card used for the skimming was a valid bank card for which there needs to be some method to establish this fact other than just the data on the magnetic stripe. This additional identifying method can just shut down use of the card in the event of such unauthorised access as has happened now. The earlier points related to prevention of unauthorised use of the ATM cards.
Fourthly we come to the aspect of catching the perpetrators responsible for this fraud and there again both the banks involved have been found woefully lacking in having security guards and having functional CCTV cameras at the ATM premises. Both are mandatory according to regulations and clearly the Banks involved have failed in their duty to protect the interests of their customers. This is tantamount to dereliction of duty and hence the concerned Banks are liable to compensate the ATM cardholders for any loss incurred.
We need to pursue this process and follow it to its logical conclusion since the Banks are legally as well as morally responsible to make their processes of customer interaction for withdrawing money through ATM’s robust and foolproof. Apart from this the Banks can look at providing insurance cover against such losses to its customers so that people can freely and without hesitation use the facilities provided by the Bank which over time will become more complex as technology develops.
