By Our Correspondent
ISLAMABAD: President Dr. Arif Alvi has directed United Bank Ltd (UBL) to refund the amount of Rs 79,500, along with profit, to a victim of online fraud. The President emphasized the need for banks to address inherent flaws in their systems to prevent fraudulent transactions and to educate customers about the risks and benefits of digital banking before enabling the facility.
The incident involved a customer, Mr. Abdul Rauf, who was defrauded through the Inter-Bank Funds Transfer (IBFT) facility after falling victim to a phone scam. He received a call from a person posing as a bank representative who acquired his banking details/credentials, leading to the fraudulent debiting of his account through multiple small transactions.
During the hearing at Aiwan-e-Sadr, the President noted that the bank confused customer consent for availing the IBFT facility with customer authentication before conducting transactions. He pointed out that the bank opened the facility without the customer’s consent and without providing sufficient information about the service, especially considering the customer’s unfamiliarity with digital banking.
President Alvi held the bank responsible for maladministration due to its failure to comply with the State Bank of Pakistan’s (SBP) directives, which require obtaining customer consent for such facilities. As a result, he rejected UBL’s representation against the decision of the Banking Mohtasib Pakistan (BMP) and ordered the bank to refund Rs 79,500 to the customer within 30 days.
In conclusion, the President urged UBL and other banks to enhance their systems, prioritize customer education, and strictly adhere to SBP’s regulations to safeguard customers against online fraud and ensure a secure digital banking experience.
