President Alvi rejects Habib Bank’s appeal and orders to pay the victims
ISLAMABAD: The President of Pakistan, Dr. Arif Alvi has rejected the plea in six different cases filed by Habib Bank Limited (HBL) and ordered to pay the victims.
A statement issued on said the president had ordered HBL to compensate victims of online banking fraud because the justifications presented by the bank were not sufficient.
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Dr. Alvi ordered HBL to reimburse and compensate the 6 defrauded customers with their stolen money and observed that since the bank had failed to prove compliance with the relevant provisions of laws, rules and regulations, its representations were therefore devoid of any basis and deserved to be rejected.
The President dismissed HBL’s six representations totaling Rs. one million and observed that the victims were deprived of their hard-earned deposits when the bank unilaterally activated the Electronic Funds Transfer (EFT) service without the request / the consent of account holders and did not put in place the necessary safeguards against the online exploitation of account holders by fraudsters.
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In all six cases, the President found that the bank had failed in its obligation to inform account holders of the advantages and disadvantages of activating electronic funds transfer (EFT), as required by the mandatory guidelines of the State Bank of Pakistan (SBP).
If the bank had not opened the EFT service without customers’ consent, account holders could have avoided the financial loss, he added.
The president dismissed the bank’s claim that all transactions were 3D secure, being a secondary step, observing that the State Bank of Pakistan (SBP) required all banks to register their customers for banking services. via the Internet before offering them products and services based on the Internet and put in place all the security measures necessary to protect its customers from fraudsters.
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In his rulings, the President concluded that since the bank could produce no evidence that it had complied with the provisions of the relevant laws, rules and regulations, therefore, its representations were without merit and deserved to be rejected.
According to the details, the account holders were called by fraudsters who lured them into their trap by providing information regarding their names, CNICs, birth dates, credit card numbers and obtained from them the names of their mothers and used this information to deprive the account holders of their deposits by carrying out multiple e-commerce transactions, even though the bank’s customers were not using any mobile application and they were also in possession of their debit cards. ATM.
The victims approached their respective bank branches to freeze their accounts and request a refund, but they received no redress from the bank on the grounds that they themselves had shared their personal banking credentials. with unknown callers.
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Feeling aggrieved, the account holders contacted the Banking Mohtasib of Pakistan (BMP), after hearing arguments about bank malfeasance, maladministration, wrongdoing, fraudulent transactions, corrupt and dishonest practices by bank officials. Bank, he decided the cases in favor of the plaintiffs.
The Bank, however, chose to escalate the matter further and filed separate representations with the President which were dismissed and the Bank was told to comply with the Banking Ombudsman’s instructions.