What to Do If You Suffer Financial Loss Because of Negligence
Negligence can lead to financial loss in a variety of ways, including data breaches, fraudulent transactions, system malfunctions, or misuse of personal information by a service provider. In most cases, legal negligence is defined as a lack of attention or care that brings harm to someone else. In India, digital and electronic transactions that cause financial losses can be remedied by civil and/or criminal law. Because of the complexities, many people seek advice from a cyber lawyer to determine and explain the legal remedies.
Identifying Negligence in Financial Loss
Establishing
negligence is a five-step process:
●
There was a duty of care.
●
There was a breach of that duty.
●
There was a breach resulting in damage.
●
There was a financial loss.
●
The financial loss occurred.
For example,
when a customer suffers a financial loss as a result of a bank, a website, or a
payment service provider that, in the customer’s opinion, has breached their
duty of care to maintain adequate security, such loss may be attributed to
negligence. Courts review the case and decide if the defendant sufficiently
implemented the necessary preventive measures, according to the provisions of
the law and the practices of the industry.
Immediate Steps After
Discovering the Loss
Victims must first record the details of the
loss. This includes saving:
●
Bank documents and transaction
records
●
Correspondence related to the
loss, such as emails or messages
●
Screenshots showing unauthorised
actions
●
Record system logs or alerts
These documents must be submitted to aid
recovery and to make strong legal claims. Complaints can be made with the
involved service provider, bank, or any other platform. Most disputes are a
result of delayed reporting, which affects the investigation and tracing of
lost funds.
Filing a Criminal Complaint
In cases where there are financial losses from
revenue fraud, hacking, or unauthorised access, there is the option to file a
criminal complaint with:
●
Your local police department
●
A cybercrime division
●
The National Cyber Crime Reporting
Portal
Filing First Information Reports (FIR) is
possible under the Information Technology Act of 2000 and the Indian Penal
Code, 1860, as it pertains to:
●
IT Act 43, 66,
●
Section 420 (cheating),
●
Section 406 (criminal breach of
trust)
Cyber law experts say
the criminal law's focus is to ensure defendants are punished and to minimise
the same behaviour from occurring in the future.
Civil Remedies for
Compensation
In addition to criminal prosecution, there are
civil remedies available to recover any losses suffered financially by the
victims, which include:
●
Filing a civil suit to recover
damages
●
Filing a compensation claim for
the act of negligence
●
Filing complaints in consumer
forums for the deficiency in service
In situations where a service provider has not
shown a reasonable standard of care, the courts are likely to award
compensation for actual damages suffered and, in some instances, for emotional
distress.
Legal practices connected to cyber law consulting
typically involve ascertaining whether any contractual obligations and legal
duties, if any, have been breached.
Remedies Available in The
Information Technology Act
Section 43A of the IT Act provides a certain
mechanism to claim damages. A corporate [1] [2] body,
because of its own negligence and failure to protect sensitive personal data,
causes wrongful loss to any person and is liable to pay damages. The officers
for adjudication under the Act will deal with such loss complaints.
In the IT Act, negligence regarding the
protection of data is liable to prompt both civil liability and a defence to
the law, as noted in some of the cybercrime lawyer
forums.
The Responsibility of Banks
and Intermediaries
When it comes to banks, payment processors,
and other digital service providers, the applicable laws require adherence to a
reasonable level of online security. The RBI’s instructions and the data
security laws specify the following:
●
Customer authentication
●
Fraud detection and response
●
Transaction monitoring
If a financial institution is negligent, it
can be sued for damages by its clients. If a user complained about the
financial institution, the courts may consider the user’s behaviour. This is
often referred to as contributory negligence.
The Role of Digital Evidence
and Expertise
Digital evidence can be a vital element in a
negligence-related complaint. Evidence of how the organisation lost control of
its processes, the breaching party or parties, and the level of control in
place to mitigate the breach is critical in determining the factors in a breach
of security case. People often search for “cyber advocate near me”
to understand how they will use this kind of evidence from a digital forensics
report in a court case.
International Transactional
Issues
Digital transactions often involve the use of
foreign technology and service providers outside the country. Indian courts
will likely use bilateral agreements and other arrangements to analyse and
enforce the claims. Even in transactions involving other countries, the
aggrieved party is entitled to litigate within the Indian courts if the loss
was suffered in the territory of India.
Parting Thoughts
The negligence-related financial loss is not a
mere technical problem. Indian law covers negligence through three avenues:
criminal law, civil law, and ICT Act claims. Digital negligence is being
recognised by courts as a serious consumer and data protection issue. Legal
avenues available help people to respond properly and constructively to
negligence resulting in loss.
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