In July 2017, the Reserve Bank of India had issued a notification to protect the customers against unauthorized transactions in their 'bank accounts and credit cards'.
As per the said guidelines, the customers could limit their liability in cases of any unauthorized electronic banking transactions. Must Read : Victim Of Online Fraud? Notify Your Bank ASAP.
In recent times, mobile / electronic wallets such as Paytm, GooglePay, Amazon Pay, PhonePe etc. have become hugely popular.
Hence, RBI has now issued guidelines relating to the fraudulent transactions in such 'Prepaid Payment Instruments or PPIs'.
Salient features of these new guidelines — Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Payment Transactions in Prepaid Payment Instruments (PPIs) issued by Authorised Non-banks — are discussed below.
1. For the purposes of these guidelines, the payment transactions have been classified into two categories
a. Remote / Online payment transactions: Where the physical Prepaid Payment Instrument e.g. card or a mobile phone is not required at the point of transaction.
b. Face-to-face / Proximity payment transactions: Where the physical PPI needs to be presented at the Point of Sale.
2. It is mandatory for the PPI issuers to register the customers for SMS alerts (and if available also for email alerts).
3. All payment transactions should be communicated to the customers through SMS alerts (and email alerts if registered).
4. Such SMS / email alerts must include the contact number / email ID where the customers can report any unauthorized transactions in their mobile wallets.
5. PPI issuers have to provide 24x7 access to their customers through website / SMS / e-mail / toll-free helpline for notifying fraudulent transactions and / or loss or theft of the Prepaid Payment Instruments.
6. In addition, the PPI issuers should provide direct link on their mobile app / website to facilitate easy reporting of any unauthorized transactions.
7. Such a reporting system should (a) immediately send an acknowledgement to the customer along with the complaint number and (b) record the date and time of raising the complaint.
8. This entire process should be informed to all customers. They should also be advised to report unauthorized electronic payment transaction at the earliest so that the risk of loss to the Prepaid Payment Instrument issuer / customer is contained and minimized.
9. Customer's liability due to any unauthorized transaction would be as under:
a) PPI issuer's negligence: Whether the customer reports such transaction or not, the entire loss will be borne by the PPI issuer. Customer's liability in such cases would be Zero.
b) Third party breach where neither the PPI issuer nor the customer is at fault:
- Zero customer liability if the customer reports the unauthorized transaction within 3 days
- Transaction amount or Rs.10,000 whichever is lower if the customer reports the unauthorized transaction within 4 to 7 days
- As per the policy approved by PPI issuer's Board if the customer reports the unauthorized transaction beyond 7 days
(Note: Above mentioned number of days is excluding the date the customer receives the payment communication from the Prepaid Payment Instrument issuer.)
c) Customer's negligence: Entire loss till the time of reporting the unauthorized transaction will be borne by the customer. Any loss, after the said transaction is reported, will be borne by the PPI issuer.
10. PPI issuers, at their discretion, can waive off the customer's liability even if customer is the negligent party.
11. The amount involved in the unauthorized transaction should be credited to the customer's wallet within 10 days of the transaction being reported (with value-date as the date of said transaction).
12. It is the Prepaid Payment Instrument issuer who shall be responsible to prove the customer's liability in case of any fraudulent unauthorized electronic payment transaction.
13. PPI issuers have to resolve the compliant and establish the customer's liability within the period specified in the PPI issuer's Board-approved policy, but not later than 90 days from the date of receipt of customer's complaint.
14. If the complaint remains unresolved within the stipulated maximum 90 days, customer's liability will be limited to amounts mentioned in point 9 above, irrespective of whether the customer was negligent or not.
15. The Board of the PPI issuers have to set up a transparent and non-discriminatory policy with regards to fraudulent and unauthorized transactions along with the appropriate grievance handling / escalation procedures.
As per the said guidelines, the customers could limit their liability in cases of any unauthorized electronic banking transactions. Must Read : Victim Of Online Fraud? Notify Your Bank ASAP.
In recent times, mobile / electronic wallets such as Paytm, GooglePay, Amazon Pay, PhonePe etc. have become hugely popular.
Hence, RBI has now issued guidelines relating to the fraudulent transactions in such 'Prepaid Payment Instruments or PPIs'.
Salient features of these new guidelines — Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Payment Transactions in Prepaid Payment Instruments (PPIs) issued by Authorised Non-banks — are discussed below.
1. For the purposes of these guidelines, the payment transactions have been classified into two categories
a. Remote / Online payment transactions: Where the physical Prepaid Payment Instrument e.g. card or a mobile phone is not required at the point of transaction.
b. Face-to-face / Proximity payment transactions: Where the physical PPI needs to be presented at the Point of Sale.
2. It is mandatory for the PPI issuers to register the customers for SMS alerts (and if available also for email alerts).
3. All payment transactions should be communicated to the customers through SMS alerts (and email alerts if registered).
4. Such SMS / email alerts must include the contact number / email ID where the customers can report any unauthorized transactions in their mobile wallets.
5. PPI issuers have to provide 24x7 access to their customers through website / SMS / e-mail / toll-free helpline for notifying fraudulent transactions and / or loss or theft of the Prepaid Payment Instruments.
6. In addition, the PPI issuers should provide direct link on their mobile app / website to facilitate easy reporting of any unauthorized transactions.
7. Such a reporting system should (a) immediately send an acknowledgement to the customer along with the complaint number and (b) record the date and time of raising the complaint.
8. This entire process should be informed to all customers. They should also be advised to report unauthorized electronic payment transaction at the earliest so that the risk of loss to the Prepaid Payment Instrument issuer / customer is contained and minimized.
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9. Customer's liability due to any unauthorized transaction would be as under:
a) PPI issuer's negligence: Whether the customer reports such transaction or not, the entire loss will be borne by the PPI issuer. Customer's liability in such cases would be Zero.
b) Third party breach where neither the PPI issuer nor the customer is at fault:
- Zero customer liability if the customer reports the unauthorized transaction within 3 days
- Transaction amount or Rs.10,000 whichever is lower if the customer reports the unauthorized transaction within 4 to 7 days
- As per the policy approved by PPI issuer's Board if the customer reports the unauthorized transaction beyond 7 days
(Note: Above mentioned number of days is excluding the date the customer receives the payment communication from the Prepaid Payment Instrument issuer.)
c) Customer's negligence: Entire loss till the time of reporting the unauthorized transaction will be borne by the customer. Any loss, after the said transaction is reported, will be borne by the PPI issuer.
10. PPI issuers, at their discretion, can waive off the customer's liability even if customer is the negligent party.
11. The amount involved in the unauthorized transaction should be credited to the customer's wallet within 10 days of the transaction being reported (with value-date as the date of said transaction).
12. It is the Prepaid Payment Instrument issuer who shall be responsible to prove the customer's liability in case of any fraudulent unauthorized electronic payment transaction.
13. PPI issuers have to resolve the compliant and establish the customer's liability within the period specified in the PPI issuer's Board-approved policy, but not later than 90 days from the date of receipt of customer's complaint.
14. If the complaint remains unresolved within the stipulated maximum 90 days, customer's liability will be limited to amounts mentioned in point 9 above, irrespective of whether the customer was negligent or not.
15. The Board of the PPI issuers have to set up a transparent and non-discriminatory policy with regards to fraudulent and unauthorized transactions along with the appropriate grievance handling / escalation procedures.
