The Indian consumer economy is moving towards a cashless state at a fast pace. Credit and debit cards have become 2 of the primary modes of transaction. Reports from independent market study groups suggest that almost Rs. 144.2 million was transacted from various POS stations in 2018 via credit cards alone.
However, despite the massive increase in usage, cardholders across the nation are exposed to the threat of different types of credit card frauds. Studies show that there have been approximately 35,000 credit card frauds between January 2015 and December 2018, costing financial institutions more than Rs. 14,165 Lakh.
Globalized communications, better internet penetration, and major advancements in technology have ironically helped impostors with new methods to gain access to personal user information. Credit card owners should be well aware of the techniques used to commit the crime so that they can understand and prevent credit card fraud. Let’s take a look at some of the different types of credit card scam and techniques to prevent them.
Identity theft is one of the most common types of card fraud. It primarily happens over the internet when individuals use their credit cards to purchase goods from e-commerce sites.
Identity theft can happen for various reasons. Scammers usually target details like credit card number, account number, bank details (login ID and password), etc. The best way to avoid this type of credit card fraud is to avoid purchases anything from lesser-known websites, using public networks to transmit sensitive information, and saving the card & bank details on the web.
Most feature-rich credit cards offer some form of protection against identity theft incidents. Instant cancellation and card blocking features offered by card companies protect customers from further fraudulent transactions.
Phishing is an elaborate scamming process where a criminal plays the role of a representative from a financial institution to lure a victim into disclosing his/her bank and card details. Phishing usually happens over emails; impostors send emails disguised as official mails from the provider so that a cardholder discloses his/her information. The same can also happen over voice class where they will pretend official representation.
One can easily prevent credit card frauds like phishing. Simply not sharing any sensitive bank or card information over phone or email will prevent impostors from accessing any funds. One should also avoid opening any suspicious email, links, or pop-ups.
Cramming is a relatively new credit card scamming technique where small unauthorized transactions are made from one’s credit card over a long period. This type of credit card fraud is relatively difficult to detect as the small transactions usually get overlooked.
A cardholder should regularly check their credit card statements to check for unauthorized transactions (regardless of the amount) on their credit account or not. In case of any discrepancy, customers can contact their credit card company for cancellation.
Skimming is a well-known process where the details of a credit card are copied with a physical device at a POS terminal. Skimming can happen at both static terminals and portable POS units.
The best prevention against skimming is proper awareness. One should not allow anyone to take their credit card away during a transaction, or swipe twice for one session.
Fortunately, most financial institutions offer various forms of anti-fraud protections and customer safety features with their credit cards. Understanding these common types of credit card fraud is of utmost importance for any cardholder. It will keep their finances and identifications secure and risk-free.
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