Banks should aware customers about online frauds: Ombudsman

ISLAMABAD: The Banking Mohtasib (Ombudsman) of Pakistan has recommended that at the time of activation of online services Banks/ Microfinance Banks relevant staff shall educate customers about various types of online banking frauds as well as the corresponding preventive measures.

In its annual report for year 2019, the banking Mohtasib observed that during investigation of complaints, we occasionally come across systemic deficiencies and control weaknesses within banks.

Such weaknesses are brought to the attention of banks’ senior management.

For issues of a serious nature, a report is submitted to State Bank of Pakistan (SBP) for such action as it may consider appropriate.

Some of these issues which have been brought to the attention of SBP for appropriate regulatory intervention are as under:

— At the time of activation of online services Banks/ MFBs relevant staff shall educate customers about various types of online banking frauds as well as the corresponding preventive measures. Banks /MFBs shall be solely responsible for ensuring customer authentication for activation of any ADC and any loss of customer funds due to false activation of any ADCs shall be compensated by the respective Banks/MFB.

— It was observed that the third party product specifically the Bancassurance sale by banks creates problems and larger number of complaints are received from the bank customers / account holders. Before selling the Bancassuarnce policy, Bank should provide all the relevant information to the customers in writing or verbally explain to them the broad features of the policy. Further, sufficient time should also be given for understanding the details of policy before its execution so as to avoid complications / disputes arise thereafter.

— Inspite of the instructions issued by the SBP, through circulars, to ensure that adequate CCTV surveillance coverage and continuous monitoring of all activity around the ATM vestibule and also to ensure that the visual record of ATM transactions is maintained for at least a period of one year, it is found that both the inbuilt cameras and CCTV were not fixed at the correct angles and in many cases the CCTV footages were not produced or had been conveniently erased, despite timely intimation and the pendency of the dispute. In such a case, the same ought to have been preserved till the dispute was resolved.

— Reducing of Notice period of Complaint from customers from 45 days to 15 days as it appears to be a long period which deprives of the Complainant from early resolution of their complaint.

— Bank officials who attend the hearings are generally not of a senior level to agree on an amicable settlement or resolution during hearing. Further, at times, they are found to be even not well versed with the cases.

— Response from banks is generally not encouraging as they either furnish response with inordinate delay or send incomplete information. Further, the process of approvals in banks frustrates the concept of early relief to the Complainant even in cases where banks agree for settlement/ resolution of the grievance.

— Non-compliance of guidelines issued by the Regulatory Authority from time to time.

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