Saturday, October 15, 2022

Credit Card Fraud: How It Happens and How to Protect Yourself

 Credit Card Fraud

The pandemic has led to increased crime risk all around the world and 'credit card frauds' constitute one of the most prevalent methods for swindling money.

Common methods for credit card fraud:

  • Lost or stolen cards: Often, fraudsters obtain credit cards by theft or by obtaining a lost card. In such instances, the fraudster tries to use such credit card information for online transaction or other purchases if they can get away without having to use a security PIN.
  • Counterfeit, doctored or faked cards: Fraudsters use devices such a ‘skimmers’ to illegally obtain credit card information. These devices are able to capture the credit card information from the magnetic strip attached to the card when the cards are swiped unknowingly on such device. The fraudsters can then replicate such information to create fake cards and use the same.
  • Phone scams: This type of credit card fraud is getting more and more common, wherein a fraudster contacts the card owner and obtains sensitive personal information such as their date of birth, passwords, card details. Often such calls are made posing as the technical team for the bank, and the caller puts up a convincing charade making the card owner divulge sensitive information.
  • Phishing scam: Fraudsters sometimes try this route of email phishing, wherein they send spam emails to obtain personal details of other parties, such as their date of birth, full names, address details etc. Through this method, the fraudster tries to steal as much supporting data and documents as possible to execute their act.
  • Application Details: In this method, the fraudster applies for a new credit card after obtaining all your personal information, including the details of your id documents and forges your signature to obtain a new card in your name.

What are the preventive measures that you can practice to protect yourself?

  • If you happen to be a victim of credit card fraud, it is important that you notify your bank immediately! The same step is to be initiated if you have lost your credit card. Once the bank is notified, they would be able to immediately block the card thus, preventing any further transactions on the same. This step is also very crucial from a legal standpoint, as it allows you to claim legal protection from additional responsibilities on the charges on the card, which were not made by you once you have reported the loss or theft.
  • Store your PIN, online transactions passwords securely and follow the digital security protocol of not repeating the same password for different platforms. Regularly changing your security passwords and adding additional security features such as a ‘security question’ should be considered.
  • Set up a transaction alert on your phone so that you are immediately notified of every transaction allowing you to continually monitor and track the payment transactions.
  • Cultivate the habit of checking your monthly bank statement on a regular basis, so that it is possible for you to notify the bank if you see any unfamiliar transactions. Banks usually allow a dispute to be registered within a specific time frame, and therefore, it is crucial to report any discrepancies in the monthly statements as per the terms and conditions of your bank.

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