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President Alvi directs UBL to refund Rs 564,469 to three victims of bank fraud


President Dr. Arif Alvi has directed two private banks to refund an amount of Rs 564,469 to three victims of bank fraud who were swindled out of their money by fraudsters through online funds transfers and fraudulent ATM transactions.

President Dr. Arif Alvi gave these directions while deciding on three separate representations filed by Allied Bank Ltd (ABL), United Bank Ltd (UBL) and a citizen against three different decisions of the Banking Mohtasib (BM).

As per details, Muhammad Saleem Zafar, Hidayatullah, and Ghulam Muhammad (the complainants) were maintaining separate accounts with ABL in Lahore, UBL in District Karak, and ABL in Peshawar respectively. Mr Zafar received a call from a number similar to ABL’s helpline and the caller introduced himself as the Bank’s representative. Muhammad Saleem Zafar shared his banking information with the caller, after which, a sum total of Rs 348,500 was deducted from his account. Similarly, Hidayatullah lost Rs 170,969 to some unknown person using UBL Digital App even though he had neither requested for Electronic Funds Transfer (EFT) Facility nor had he ever used it.

Ghulam Muhammad lost Rs 45,000 when his card was captured by an ATM machine and he later found out that some fraudsters got hold of his card through deception, conducted ATM transactions, and withdrew funds from his account unauthorizedly. The complainants approached the banks for relief but without any result. Feeling aggrieved, they separately approached the Banking Mohtasib (BM) which in the cases of Mr Zafar and Mr Hidayatullah directed to refund the lost amounts to them whereas in the case of Ghulam Muhammad, BM directed to close the complaint. The cases were later referred to the President through separate representations, who directed the banks to pay the defrauded amount to all three victims of bank fraud.

President Dr. Arif Alvi in his decisions observed that in the cases of Mr Zafar and Mr Hidayatullah, the respective banks had opened EFT Facility by default without the consent and knowledge of the customers, which was in violation of the State Bank of Pakistan’s rules/regulations and the Payment System and Electronic Fund Transfer (EFT) Act, 2007. He noted that the complainants had not requested for the opening of such channels and the banks could not produce any evidence with regard to the full disclosure of terms of fund transfer in a clear manner as stipulated in the EFT Act 2007. He upheld the decisions of the BM that since malpractice and maladministration on the part of banks had been established, therefore, the banks were liable to make good the loss of Rs 348,500 and Rs 170,969 to the customers.

In the case of Ghulam Muhammad, the President observed that it was proven unambiguously that the card was captured and later on some swindlers got hold of his card through their sleight of hands/deception from the ATM. He said that it was the primary responsibility of the bank to protect the interests of the depositors optimally and recently representations of similar nature filed by banks were rejected, therefore, justice demanded consistency in cases of similar nature. The President, therefore, rejected the decision of the Banking Mohtasib to close the case and directed ABL to pay Rs 45,000 to the victim of fraud.

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