In a recent comparative study of the digital payments ecosystem of 25 countries, India ranked at the top. This study included developed nations like the UK and Japan. Over the past few years, an array of technological initiatives and rapid digitization in the Indian financial system has welcomed significant developments in the digital payments ecosystem. As a collateral effect, however, there’s also been an increase in instances of debit and credit card fraud.
- In India, the number of card-related frauds stands at 140,471 in between FY 17 and FY20.
- The amount related to the frauds in question is Rs.589.14 crore.
Card frauds are becoming an increasingly common phenomenon with time as cybercriminals continue to devise better and more sophisticated ways to deceive individuals. Credit card fraud primarily results in unauthorized transactions and identity theft. Since both are grave consequences, it’s essential to learn how to minimize the after-effects of such an eventuality.
How to report credit card frauds?
As a first step, you need to inform the credit card issuer of the fraud and block your card and/or account by contacting their customer care. Ensure that you take these steps at the earliest. Your card issuer will assume the liability of the loss if you report within 7 working days. In case you take any longer than that, the liability is subject to the financial institution’s Board-approved policy, according to the RBI.
Also, raise a formal, written complaint with the financial institution regarding such credit card fraud. You need to produce the following documents when raising a complaint:
- Account statements of the past six months
- Your ID proof and address proof
- Copy/copies of SMS update(s) relating to unauthorized transactions
Alongside your card issuer, you also need to file a complaint with the police. Visit your nearest police station and produce the documents mentioned above along with a written application to lodge an FIR.
What are the different credit card fraud types?
While it’s essential to learn how to report card frauds, it’s also equally important to be aware of the different ways such an eventuality can occur. It is a crucial preventive measure in an ever-evolving global and local fraud landscape. These are:
- Loss of card
Card theft or loss, along with the entire wallet, is a relatively common occurrence when travelling. An incident like that can expose you to debit and credit card fraud. Then, there’s also the risk of misuse of essential documents, like your PAN card. Such risks can, however, be covered with a suitable insurance plan in place
Bajaj Finserv provides Pocket Insurance and Subscriptions like Wallet Care to minimize the inconvenience arising from a situation like that. Under it, you can block multiple cards with one call, receive compensation in the case of fraud, emergency assistance if you are travelling, as well as PAN card replacement.
In phishing, a cybercriminal posing as a reliable entity dupes an individual into providing sensitive personal and financial information. Phishing is carried out via electronic means of communications, most prominently emails.
Phishing is a highly sophisticated cybercrime. A phishing attack thus involves a mail from a fraudster, disguised as a trustable source, asking you to perform some urgent action with a malicious link attached.
- India witnessed a 37% increase in cyber-attacks in the 1st quarter of 2020.
One of the credit card fraud examples using phishing will be if you receive an email from someone pretending to be your card issuer. An email like that would be crafted professionally to give off a legitimate impression.
It might contain an urgent message asking you to update your credit card account, failing which your account will expire, with a link that will redirect you to a bogus website. When you change the details on this site, the fraudster will gain access to your card information and can use it for fraudulent purposes and also identity theft.
However, the email address and the malicious link in phishing emails, while looking legitimate, are minutely erroneous. Therefore, if you check these factors properly, you might be able to avoid falling prey to it.
Nevertheless, since it might result in consequences like identity theft, you may consider putting in place an identity assure policy to minimize your financial losses in case such an eventuality comes to pass. You shall also inform your card issuer at the earliest when that happens.
Skimming involves the theft of credit card details when you use it to make a transaction via POS terminals or ATMs. Fraudsters use devices called skimmers to copy the card details via the magnetic strip during card swipes. They later clone the information on blank cards and use them for unauthorized transactions, both online and offline.
- 228.44 crore – Amount related to card frauds in FY20.
As a measure for credit card fraud prevention, you should thus check for protruding or loose card-readers and keypads when visiting ATMs. These are signs of tampering and indicate the installation of a skimmer.
You can also avail an ATM safeguard policy, an additional safety net to receive coverage for unfortunate incidents in a facility like that.
Nevertheless, vigilance is critical in preventing credit card frauds. You can activate SMS updates, keep a regular tab on your card statements, and avoid sharing sensitive information over calls or the internet to avoid credit card frauds.