FREEZE & FLEECE SCAM

Freeze & Fleece Scam: High Court asks Kerala police chief for report; pathiri seller's account reactivated

Kozhikode: The High Court of Kerala on Thursday directed the state police chief to file a report on the rampant and 'indiscriminate' freezing of accounts by banks in Kerala based on directions from cyber police in other states investigating online frauds.

Hearing a writ petition filed by six victims of account freeze by various banks, judge Viju Abraham asked how could people live if banks froze their accounts. "The judge asked what was happening. He asked how banks could freeze accounts when investigating agencies were not complying with Section 102 of the CrPC (Criminal Procedure Code)," said Ameen Hassan K, an advocate representing the six petitioners.

Section 102 of CrPC empowers investigating officers to seize property that may have been allegedly stolen or suspected to be part of any offence.

Banks can freeze accounts only if they receive notices filed under Section 102 of the CrPC by the investigating officers, he said. But in Kerala, banks are freezing accounts based on the mere filing of complaints on the National Cyber Crime Reporting Portal, run by the Ministry of Home Affairs, Hassan said. "There is no FIR in many cases," he said.

In some cases, banks have frozen accounts based on notices issued by investigating officers under section 91 of the CrPC, which requires respondents to only produce documents before the police, the advocate said.

One of the petitioners of the writ is Moideen P (50) of Pookkottur in Malappuram. Onmanorama reported his story here. Kerala Gramin Bank froze his account after he received Rs 3.5 lakh as a home loan from Kerala State Financial Enterprises (KSFE). The bank said a complaint was filed on the National Cyber Crime Reporting Portal over the money Moideen received from KSFE.

The other petitioners are Muhammed Shajahan U P (40) of Trikaripur in Kasaragod; Akhil Mansoor K (28) of Manjeri in Malappuram; Mohammed Sadique K (22) of Foursa Group of Engappuzha in Kozhikode; Mohammed Jaseer N T (29) of Kannur; and Ashfak Ahamad O P (33) of Melattoor in Malappuram.

They have asked the high court to direct banks not to freeze accounts without receiving specific instructions under section 102 of CrPC from agencies or officers investigating cyber crimes.

Account freeze victims can report on 1930
In a Facebook post on Thursday, Kerala police said they had not directed any banks to freeze accounts over transactions made through mobile payments apps (UPI).

When a complaint is registered on the National Cyber Crime Reporting Portal or at 1930, its call centre, Kerala police direct banks to freeze the disputed money, not the entire account, the department said on Facebook. Banks would be directed to freeze accounts that were frequently involved in frauds, it said.

Kerala Police said if bank customers had complaints of freezing of their accounts, they might report their grievances on the toll-free number 1930.

However, Kerala Cyber Crime nodal officer Shaji Sugunan had told Onmanorama that Kerala Police could do little to help bank customers if their accounts were frozen on the directions of cyber police from other states.

Freeze on pathiri seller's account lifted
Federal Bank, facing the flak over arbitrary freezing of accounts, lifted the freeze on the account of pathiri seller Ismail E six and a half months after it restricted the account over a Rs 300 transaction.

"I don't know why the bank unfroze my account now. But I had taken it to the High Court over the illegal debit freeze," he said.

For the past eight years, Ismail and his wife Rasheeda U have been running a small unit making and selling pathiri (a thin rice flour pancake) at Panoor in Alappuzha's Thrikkunnapuzha grama panchayat. Last October, a woman in their neighbourhood bought 150 pathiri for Rs 300 from them and transferred the money using a mobile payment app.

The money was credited to Ismail's account with Federal Bank's Ambalapuzha branch. And on October 6, the bank debit froze his account which had around Rs 4 lakh in it, saying that the Rs 300 he got was linked to online fraud.

The bank could have marked the Rs 300 as the disputed amount (or lien) instead of imposing a debit freeze on his account. The bank ignored his multiple pleas to unfreeze his account, forcing him to move the High Court of Kerala on February 23. "In the court, the bank's advocate told the court that I was not in the wrong. But the freeze on my account remained," Ismail said.

He said the freeze did not affect his business. "I just have to buy rice flour to run my business. But the construction of our house got delayed," he said.

The couple had begun construction of their house at Palanna, a 30-minute walk from his pathiri unit. Ismail had agreed to give Rs 4 lakh to the civil contractor on completion of the foundation work. "That's when the bank froze my account and I could not pay the contractor. He left the work there," Ismail said.

On April 18, the Ambalapuzha branch manager called him under some pretext and took him to Alappuzha to meet the bank's regional manager. "The branch manager took me to Alappuzha in his car. The regional manager asked me about my business and children," he said.

When he reached home, the branch manager called him and said the freeze on his account had been lifted. "I immediately transferred a small amount to my SBI account to check," he said. The transaction was successful. "I am happy the bank unfroze the account just in time for the Perunal," he said referring to the Muslim festival of Eid ul Fitr, falling on Friday.

Ismail's experience had galvanised other bank customers, whose accounts were frozen for no mistake of theirs, to form groups and go public with their grievance in Kerala.

Ismail said he still did not know why his account was frozen. "All I know is accounts of others who got money from the woman were also frozen," he said.

'We are taking up the cases with police'
Banks in Kerala have been freezing the accounts of their customers based on notes from cyber police from other states investigating online fraud. In many cases, banks freeze accounts based on complaints registered on the National Cyber Crime Reporting Portal. The complaints are then forwarded to the police stations of the complainants.

But in several cases, customers said the police were seeking bribes from them to unfreeze the accounts despite providing evidence of legal transactions.

Federal Bank now said they were taking up the cases with the respective police station to unfreeze the accounts. "We are doing it on a case-to-case basis, based on the request of specific customers and the recommendations of their branches," said Amith Kumar, deputy vice-president of the bank. Branches would run an inquiry to find the source of the money credited to their account.