ATM withdrawal: Need to clearly define terms of use

A court’s interpretation of a law or a rule or even terms and conditions of a contract, can well have far reaching implications for consumers. One such verdict of a district consumer disputes redressal commission, given in 2018, continues to haunt consumers even today.

I am referring to the order of the Fourth Additional District Consumer Commission in Bengaluru, saying that when a wife or a husband withdraws money from an ATM at the behest of the spouse, it constitutes ‘unauthorised’ use. Therefore, the bank enjoyed immunity from liability towards any deficiency in service connected with that particular ATM withdrawal.

Of course, one can put forward many arguments against this verdict. Besides, there is some comfort in the thought that neither the apex consumer court nor the final authority in the matter — the Supreme Court — has looked into the issue. However, given the consequences of such a verdict on millions of ATM users, it is absolutely essential to find an immediate out-of-court solution to the problem created by the consumer court verdict, keeping in mind the ground realities in the country.

Before I go further, let me give a brief account of this case for the benefit of those who may not be aware of it. The case is about a woman, recuperating after delivering a child, handing over her ATM card and PIN number to her husband, for withdrawal of ₹25,000 from her account. Unfortunately, the ATM did not dispense the money, but showed a debit in her account. The husband immediately called up the bank’s helpline and was assured that the money would be deposited into his wife’s account.

When this was not done, the couple lodged a complaint and was told that as per the terms and conditions governing the ATM card, the card was not transferable, the card holder was not entitled to hand it over to anyone nor disclose the PIN number. By asking her husband to draw the money, the consumer had violated these terms and conditions and therefore was not entitled to claim any relief.

The district consumer commission agreed with this view and held that the bank bore no liability for the unauthorised use of the card and having violated the terms and conditions, the consumer was not entitled to any relief (Mrs. Vandana Vs the General Manager, SBI local head office, Bengaluru — CC. No. 1786 of 2014, decided on May 29, 2018).

Now there are many unanswered questions here. For example, did the bank bring to the notice of the customer, the terms and conditions of usage and explain the meaning of the term ‘not transferable’? Did the bank tell the customer that asking the spouse to withdraw money constituted violation of the terms of usage? Does not asking your spouse to draw money from the ATM on your behalf constitute ‘deemed authorisation’ and therefore such withdrawal, authorised? If the cash was not dispensed by the ATM, how can the bank keep the money that legally belongs to the customer? Is it not illegal? Does it not constitute ‘unjust enrichment’? How can such conduct be upheld?

These are of course questions to be considered by the courts, but in the meanwhile, it is imperative that the banks immediately provide for such ‘authorised’ withdrawal. A large section of the population — the sick, visually challenged, physically constrained people and very senior citizens, depend on their spouse or a close relative to draw money on their behalf. While cheques are mostly used in these situations, there could be emergencies where someone has to rush to an ATM in the night to draw cash. Besides, with many banks closing down branches as unviable, a bank branch may be too far away. In fact, the very convenience of an ATM card would be defeated if one is unable to authorise even a spouse or a close friend or a close relative to draw cash on your behalf, particularly in emergencies.

One way out could be to provide for an ‘authorised user’. That is, the ATM card holder can be given an option of filling up a form, giving details of an authorised user and his or her photograph. It is a little different from an add-on credit card in that here the card remains with the card holder and whenever necessary, he or she can give the card and the PIN number to the authorised user to draw cash. The card holder can withdraw this authorisation-again through a proper format — whenever required and of course change the PIN. This way, the debit card holder enjoys the convenience of asking the authorized person to withdraw money on her or his behalf , while also taking responsibility for withdrawals or usage by the authorised user. Will the Reserve Bank kindly consider this?