labels: investment - general
Beware, card users !news
Jay Shree
25 January 2006
As plastic gains popularity, users need to guard against fraud.

Are you one among those who flip your credit card to make a purchase? If so, do you always check the amount of purchase before you sign the card charge slip or keep a watchful eye to ensure that your card is swiped in front of you only for your own purchase?

Other wise, you may be shocked to discover your monthly credit card bill showing purchases not made by you. And, predictably you would have to dispute the faulty transactions with your card issuing bank, wrangling with wrong billing, proof of purchase, statement of accounts… a tedious process.

With no one in the whole chain - the merchant outlet, card issuing bank and the card owner - clear about the perpetrator of the crime, it makes all the more difficult to trace the culprit.

The Reserve Bank of India too has a very nominal role here and it advises the card issuing bank to ensure that wrong bills are not raised. When a customer protests over a wrong bill, the RBI directs the card issuing bank to provide explanations, and if necessary, provide documentary evidence to the cardholder within 60 days and redress the customer's grievance amicably.

With e-commerce gaining popularity among Indians, the chances of electronic frauds are high facilitated by the lack of biometric cross-verifications and digital signatures, which enable tech savvy criminals to coin new frauds.

The most common fraud world-wide involves using lost or stolen card - a whopping 48 per cent; frauds pertaining to identity thefts comes next at 15 per cent.

Common credit card fraud
Method Percentage
Lost or Stolen Card
48 %
Identity Theft
15 %
Skimming (or cloning)
14 $
Counterfeit cards
12 $
Mail Intercept Fraud
6 %
5 %

In India, sensing the increasing trend of frauds in the banking industry, the RBI recently called for data pertaining to the number and nature of frauds from individual banks. However, a cursory look at the number of complaints received by individual banks reveal that card related complaints occupy a significant percentage. It must be added here, that the number of complaints received include other types of problems as well - like wrong billing and excess demands, etc.

Bank Total complaints Card related complaints
Number Percentage
Citi Bank
State Bank

The modus operandi is simple - as you hand over your card, the fraudster notes your name and the three digit secret pin number printed on the reverse of the card. Together with the details already available through the merchant copy of the charge slip, it is a simple matter for net savvy criminals to use the credit card information for making online purchases and payments. Online purchases and payments can be made by submitting these details since there is no way, as on date, to affix your signature to online transactions.

Avoid handing over your card to sales boys and even if you do, keep a watchful eye on the charge process till your card is returned. Alternatively, walk over to the cash counter and ensure proper billing and immediate return of your card. For those who would like to be extra cautious, it is advisable to wipe out the secret pin from the card (after memorising it for your own use), or patch up the secret number on the reverse of the card with an opaque cover.

So the next time you fill up your tank, ensure that you do not loose valuable information..

also see : Credit cards: Pauperised by plastic?

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Beware, card users !