CREDIT CARD FRAUDS

 

Credit card fraud is a comprehensive term used for frauds committed using a payment card, such as a credit card or a debit card. Fraudsters use card owner's credentials to buy goods or services, to open loans or credit card accounts or to secure cash advances— without the knowledge or consent of the cardholder. These scams usually lead preys to empty bank accounts, unpaid long term debts & low credit scores; impacting their ability to obtain new credit for a time.

Credit cards are infamous for the ample benefits they offer, such as instant payments, ease of use, easy loans, rewards, bonuses & many more. It saw a huge spike in usage after digitalization, especially due to demonetization in 2016 & so did the frauds. India ranked among the top 5 countries about credit card fraud, with more than one-third of the people saying they had been scammed, according to the 2018 Global Consumer Fraud Report.

How does Credit Card Fraud work?

  Credit cards usually have a magnetic strip on them; containing the crucial credentials of the owner, making it easier for criminals to steal the data. Here is a list of some of the most prevalent ways, it occurs :

 > Lost Or Stolen Cards

Criminals can obtain credit cards by either finding lost cards or stealing them from someone’s possession. They might not be able to use it in offline stores as it requires a PIN, but can use the details to make online purchases.

> Card-not-present fraud

This is one of the most popular types of fraud, as it does not requires the criminal to have a physical credit card. Instead, basic details such as the account holder's name, the credit card number, and the expiration date is enough to vacate the bank account.

> Credit Card Cloning

It is a form of identity theft, where stolen data from actual cards is used to generate fake credit cards. Scammers use a device called "skimmer", which on card swiping, permanently stores a person's data, which can be easily retrieved later, using a few software. ATMs, restaurants, gas stations, etc., are usually the target places for such activities.

In 2018, a waiter in a Mumbai restaurant managed to steal the credit card details of over 1,000 unsuspecting customers for 2 years.

> Phishing

In this, scammers pretend to be bank officials & persuade you to some websites or apps that look authentic or ask for OTPs; to serve you deals. They get access to all your details once you enter them & then use them for their benefits.

During the lockdown last year, a lawyer in Delhi, lost Rs 1 lakh to a scammer, in the name of redeeming credit card points, via a spoof message link.

> Application Fraud

  Scammers sometimes apply for a new card instead of stealing the existing one. They do this via using victim's personal information, such as their full name, date of birth, address and Social Security Number. They may even steal supporting documentation to substantiate their application.

How To Prevent Yourself?

● Always memorize your CVV and scratch it off the card to avoid misuse, in case it is stolen or misplaced.

● Register your mobile number with the bank and subscribe for alerts for your transactions.

● Review monthly credit card statements in detail to identify any unauthorized transactions.

● Don't let your card out of sight. The waiter in Mumbai managed to steal data because ignorant customers would hand over their cards, only to be secretly swiped and skimmed.

● Always proceed with online transactions on a secure network. The website should be with https:/ rather than just http:/. The ‘s’ here stands for secure. (Can enter our previous link on this topic )

● If possible, opt for secured-chip EMV cards.

What to do in case scammed?

    TAKE IMMEDIATE ACTION!!

● Register a police complaint.

● Block your card using your banking app or by calling your bank’s helpline number.

● Remove the stolen/lost card from any online shopping account where it might be saved & log out of the site.

● Make sure to get yourself covered under ‘zero-liability for fraudulent transactions.

● Contact your lender and ask them to update your credit report to avoid any damage to your credit score due to fraud.

Conclusion

 Credit cards are no doubt, are a powerful payment system & banking securities are evolving every day to provide better safety. It becomes our responsibility as satark consumers to become more vigilant of our belongings and surrounding. Keep an eagle eye on your statements, upgrade your knowledge & be cautious to manage your finances better. Though these scams are tactically executed, it is difficult to trace them but with some preventive measures & immediate actions, we can avoid major grief at the hands of fraudsters.

#stat smart #stay satark

                                 By - Pooja Malkani