It usually starts with a phone call. Someone polite, who knows your father's name and the last four digits of his card, says there is a "problem" with his account. He is told to share a number "just to verify". Within minutes, money he saved over thirty years is gone. By the time your mother notices the messages, the bank's helpline has put her on hold for the third time. The family feels foolish, scared, and completely lost about what to do next.
If this has happened to an elderly parent or grandparent, please take a breath. You are not the first family this has happened to, and the law gives you not one but two separate doors to knock on. You can chase the money back, and you can have the fraud treated as a crime. This article explains both, in plain language, and how to use them together.
Why a Banking Scam Is Actually Two Problems, Not One
When an elderly person loses money to a banking scam, two wrongs have usually happened at the same time, and most families only see one of them.
The first wrong is the fraudster's crime — a stranger lied, deceived your parent, and tricked them into parting with money or sharing details. That is a criminal act and the police machinery is meant to deal with it.
The second wrong is often the bank's failure — if the bank did not alert the account holder, did not act on a complaint quickly, allowed an obviously suspicious transaction, or its own staff or system failed, that can be a "deficiency in service" by the bank. That is a consumer matter.
These are decided in two different places, by two different sets of rules, and one does not block the other. The criminal case punishes the cheat. The consumer case asks the bank to compensate. A family that only files a police complaint and forgets the bank, or only complains to the bank and lets the fraudster walk, has used only half the law available to them.
When Can You Hold the Bank Responsible?
The Consumer Protection Act, 2019 treats banking and financial services as a "service". If that service falls short, it is called a deficiency in service, and a consumer can complain. The key question is not "was there a fraud" but "did the bank do its job properly".
Consumer commissions in India have repeatedly held banks responsible in scam-related situations. Where money was siphoned off by bank officials, the bank was held liable for the fraudulent act of its own staff — deficiency in service was proved. In a net banking fraud case, the bank was held liable and the Supreme Court directed it to compensate the account holder for the amount misappropriated, as detected. Where a bank failed to send an SMS alert of a withdrawal and a pensioner suffered loss, the bank was held deficient and compensation was upheld. In another matter, an amount was debited but not disbursed at an ATM, and the bank's argument that the customer did not call the helpline immediately was rejected, because those helplines themselves were not reachable.
There is also an important point about cheating cases. In a matter where a cheque book was unauthorisedly issued and lakhs were withdrawn by forging cheques, the bank argued that because fraud and forgery were alleged, the consumer forum had no power to hear it. The National Commission rejected that. It held that the jurisdiction of consumer forums is not ousted merely because fraud, forgery or criminal acts are also alleged — if the complaint is essentially about the bank's deficiency in service, the consumer forum can decide it.
So the bank cannot escape simply by saying "this is a police matter". If its conduct fell below the standard expected, the consumer route stays open.
What If My Parent Shared the OTP or Password?
This is the question that makes most families give up before they start. The honest answer is: it makes the case harder, but it does not always end it.
Consumer commissions look at the conduct of both sides. The legal idea is called contributory negligence — where the loss is partly the customer's own fault and partly the bank's. In a case where an employee cheated the account holder using his cheques, the commission found contributory negligence on the customer's part because he handed cheques to someone he should not have. But it still found deficiency on the bank's part for not carefully comparing signatures, and compensation with litigation costs was awarded — the customer simply did not get interest on top.
On the other side, in a case where a person failed to keep his cheque book locked away and his own staff withdrew money, the commission found no deficiency by the bank at all. The lesson is that the outcome depends on the exact facts: what the bank did or failed to do, how fast the family complained, and whether the bank ignored clear warning signs. An elderly person being manipulated by a professional fraudster is not the same as carelessly leaving a cheque book lying around — and that difference can matter a great deal.
How the Law Treats the Fraudster: Cheating
The criminal side targets the person who actually lied to your parent. In the Indian Penal Code, this is the offence of cheating. The law says that whoever, by deceiving any person, dishonestly induces that person to deliver any property, or to do something they would not otherwise do, which causes them harm, is said to "cheat".
The Penal Code itself gives examples that look exactly like modern scams. One illustration describes a person who falsely pretends to be in government service and dishonestly gets goods on credit he never means to pay for. Another describes someone who deceives a person into a false belief and dishonestly induces them to part with money. A scam caller pretending to be "from the bank" or "from the electricity department" to extract account details is the same wrong dressed in a phone instead of a face.
The serious form — cheating and dishonestly inducing delivery of property — carries imprisonment that may extend to seven years, along with a fine. Courts have made clear that the dishonest intention must exist at the very beginning, at the moment of the deception. A scam caller plans the lie before dialling, so that ingredient is usually present from the first ring.
Courts have also held that just because a transaction looks commercial or involves money does not mean cheating "escapes" from it. As one judgment put it, many cheatings are committed in the course of money transactions. So a fraudster cannot defend himself by saying "it was just a financial deal gone wrong".
When a Bank's Own Staff Is the Cheat
Sometimes the danger is not an outside caller but someone inside the branch. The law has a separate, stricter idea for this: criminal breach of trust. This applies when a person who has been entrusted with property, or with control over it, dishonestly uses it in violation of the law or of their duty.
Courts have applied this directly to banks. The expression "direction of law" has been held to include banking norms, practices and a bank's own internal departmental instructions. Bank officials who allowed credits in violation of departmental instructions, and dishonestly used money belonging to the bank to benefit a customer, were held guilty. Failure by bank officials to follow Reserve Bank of India instructions and a departmental manual was treated as a violation of a direction of law amounting to criminal breach of trust.
This matters for your family because if a relationship manager, agent or branch employee was involved in misleading your elderly parent, the wrongdoing is not just "cheating" by a stranger — it can be a breach of trust by someone the bank put in a position of confidence. Courts have also held that companies and corporate bodies themselves can be prosecuted for offences like cheating; they do not get immunity simply for being a corporation. If you suspect insider involvement, say so clearly in your complaint.
Is This a Police Matter or a Court Matter? It Can Be Both
Families are often told "this is only a civil dispute, the police won't help". That is not the full picture. Courts have repeatedly said that the same set of facts can be both a civil wrong and a criminal offence.
The law does draw a line: where a dispute is purely civil — an honest business deal that simply went bad — courts will not allow a person to be harassed with a criminal case. But where the facts also contain the ingredients of cheating, such as a lie and a dishonest intention from the start, the criminal case is allowed to proceed even though a civil or consumer remedy also exists. As the courts have said, civil and commercial disputes "in certain circumstances may also contain ingredients of criminal offences and such disputes have to be entertained notwithstanding they are also civil disputes".
For your family this means the two tracks genuinely run side by side. The consumer commission deciding whether the bank must pay compensation does not stop the police from investigating the fraudster, and vice versa. If you are also dealing with the criminal side and an FIR is involved, it helps to understand how cheating and fraud complaints are handled by the police before you walk into the station.
What Should I Actually Do Now?
Speed matters more than anything else in a banking scam. Here is a practical order of steps for the family.
- Freeze the damage first. Immediately call the bank's official number, ask them to block the card and account, and note down the time, the employee's name, and a complaint or reference number. Do this even while the elderly person is still shaken.
- Report it on the cyber fraud helpline. Lodge a complaint about the financial fraud without delay — the sooner the transaction trail is reported, the better the chance of stopping the money in transit.
- Put the bank complaint in writing. Send a written complaint to the branch and to the bank's grievance officer. State exactly what happened, what the bank did or failed to do, and demand a refund. Keep proof of delivery. This written record becomes the backbone of any consumer case.
- File a police complaint for cheating. Give a clear, factual written complaint to the police describing the deception, the dishonest inducement, and the loss. If you suspect bank staff were involved, say so — that can bring in breach of trust, not just cheating.
- Escalate to the Banking Ombudsman. If the bank does not resolve the complaint within the time it promises, take it to the Ombudsman. This step also strengthens your later consumer case.
- Prepare the consumer complaint. If the bank still refuses to compensate, a complaint can be filed before the appropriate consumer commission alleging deficiency in service. Senior citizens are a recognised vulnerable group, and consumer forums can also award compensation for mental agony.
- Gather and preserve every document. SMS alerts, call records, bank statements, the written complaints, the police complaint copy, screenshots — everything. Cases are won on records, not memory.
- Get legal advice early, not late. Because two remedies are running together, a lawyer can make sure the consumer complaint and the criminal complaint support each other instead of contradicting each other.
Using Both Remedies Without Tripping Over Yourself
The strength of running a consumer case and a criminal case together is also its danger: the two must tell a consistent story. If the police complaint says one thing about how the money left the account and the consumer complaint says something different, the bank's lawyers will use that gap against you.
This is the point where steady, organised help makes a real difference. At Pinaka Legal, we often see families who acted quickly but in a panic — a phone call here, a half-finished complaint there — and the pieces don't line up. A lawyer can take the same facts and shape them into one clear narrative: a deficiency-in-service complaint that holds the bank to account, and a criminal complaint that puts the fraud where it belongs, both pointing in the same direction.
If insider involvement, a forged document, or a refused refund is part of your story, the overlap with criminal cheating and fraud law becomes important, and it is worth getting that mapped out properly from the start.
Your Family Is Not Powerless Here
The feeling after a banking scam is helplessness — that the money is gone and nobody will listen. The law says otherwise. The fraudster who lied to your parent has committed a recognised crime that can carry years of imprisonment. The bank, if it failed in its duty, can be made to answer before a consumer commission and made to compensate. And the fact that your parent may have been tricked into sharing an OTP does not automatically close the door — it just means the facts have to be presented carefully.
Move fast, write everything down, and use both doors the law has given you. An elderly person being targeted because they are trusting is exactly the kind of wrong the system is built to take seriously.
Written by the Pinaka Legal Editorial Team. For queries about a banking scam against a senior citizen in your family, call +91 8595704798 or email info@pinakalegal.com.
Frequently Asked Questions
My elderly father lost money in a banking scam. Can we get it back from the bank?
It depends on what the bank did. If the bank failed in its duty — for example, it did not send an alert, ignored a prompt complaint, allowed an obviously suspicious transaction, or its own staff were involved — that can be a deficiency in service, and a consumer commission can order the bank to compensate. Consumer forums have held banks liable in net banking fraud and in cases where money was siphoned off by bank officials. If the loss was caused purely by the fraudster with no failure by the bank, recovery from the bank becomes much harder.
Can I file a consumer case and a police FIR at the same time?
Yes. They are separate remedies in separate places. The criminal complaint targets the fraudster for the offence of cheating; the consumer complaint asks the bank to compensate for deficiency in service. Courts have held that the same facts can be both a civil wrong and a criminal offence, and one proceeding does not block the other. Running both together is often the strongest approach, as long as the two complaints tell a consistent story.
The bank says it is only a police matter and refuses to help. Is that correct?
Not necessarily. The National Commission has held that the jurisdiction of consumer forums is not ousted merely because fraud, forgery or criminal acts are also alleged. If your complaint is essentially about the bank's deficiency in service, the consumer forum can still decide it. So the bank cannot automatically escape a consumer complaint by labelling everything a 'police matter'.
My mother shared the OTP herself. Does that destroy our case against the bank?
It makes it harder but not always hopeless. Consumer commissions look at the conduct of both sides under the idea of contributory negligence. In some cases the bank was still found deficient and made to pay compensation, with the customer only losing the interest. In other cases, where the customer was clearly careless, the bank was found not deficient. The outcome turns on the exact facts, including how the bank behaved and how fast the family complained.
What crime has the scam caller actually committed?
Most commonly, cheating. The law says whoever, by deceiving a person, dishonestly induces them to deliver property or to do something harmful they would not otherwise do, commits cheating. The serious form — cheating and dishonestly inducing delivery of property — carries imprisonment that may extend to seven years along with a fine. The Penal Code's own examples include people who pretend to be someone they are not to dishonestly extract money or goods.
What if a bank employee or agent was involved in the fraud?
Then it may be more than ordinary cheating — it can be criminal breach of trust. This applies when someone entrusted with property or control over it dishonestly misuses it in violation of the law or their duty. Courts have held that a bank's own internal instructions and RBI directions count as a 'direction of law', and bank officials who violated them while dishonestly using bank money were held guilty. If you suspect insider involvement, state it clearly in your complaint.
How fast do we need to act after a banking scam?
As fast as humanly possible. The first calls — blocking the card and account, reporting on the cyber fraud helpline — should happen within minutes or hours, because that gives the best chance of stopping money still in transit. The written complaint to the bank and the police complaint should follow quickly. Consumer commissions also notice whether the customer complained promptly, so early action helps the later case too.
Can a senior citizen get extra compensation for the stress and harassment?
Consumer commissions can award compensation not just for the money lost but also for mental agony and harassment caused by a bank's deficiency in service, and they have done so in banking cases. Senior citizens are recognised as a vulnerable group. The exact amount depends on the facts, the conduct of the bank, and the loss suffered, so no fixed figure can be promised.
Is going to the Banking Ombudsman necessary before a consumer complaint?
It is a sensible escalation step and it strengthens your record, but the consumer route is independent. If the bank does not resolve your written complaint within the time it promises, taking it to the Ombudsman creates a clear paper trail of the bank's failure. If that still does not get the money back, a consumer complaint alleging deficiency in service can be filed before the appropriate commission.
We are confused about which complaint to file first. What should we do?
Practically, freeze the damage first — block the account and report the financial fraud immediately. Then put a written complaint to the bank and a police complaint for cheating on record. Because the consumer and criminal tracks run together and must stay consistent, it is wise to get legal advice early so the two complaints support each other rather than contradict each other.
For more articles on Indian law, visit the Pinaka Legal Blog.