Credit Card Fraud: Everything You Need to Know

Imagine waking up to find your bank account empty and your financial future in trouble. This situation is a reality for countless victims of credit card fraud. 

 

Fraudsters use deceptive tactics to exploit your credit card information, including the CVV. They make unauthorised purchases or steal your identity. These scammers operate silently, potentially draining your funds without your knowledge.

 

The best defence is vigilance and preventive measures. Educate yourself on credit card fraud detection and prevention strategies. This way, you can use your credit cards confidently without constant fear of fraud.

In this type of fraud, your credit card is used to carry out unauthorised transactions, enabling access to your personal information and credit. Credit card frauds in India occur through several methods, including the following:

• Stolen or lost credit cards being misused for fraudulent activities

• Credit card skimming, which may occur at ATMs

• Phishing where fraudsters attempt to access your information through phone calls and fraudulent SMS that intend to deceive you

• Fraudulent emails aimed at stealing your information

• Digitally capturing your credit card details at checkout counters

To receive real-time updates about any frauds using your credit cards, you can opt for fraud alerts. A fraud alert notifies you whenever your card is used online, offline or at an ATM to make a transaction.

 

If you notice any suspicious activity that you did not authorise, report a credit card fraud complaint to the bank immediately. Once the credit card company receives the complaint, they will block your credit card to prevent further misuse. 

 

Banks and NBFCs have different methods for enabling fraud alerts. You can sign up for fraud alerts via toll-free numbers, SMS, mobile apps, or net banking services. 

Credit card fraud in the mobile and wireless computing era can take many forms. Each type poses a different kind of threat to cardholders and financial institutions. Some of them are listed below.

• Counterfeit Card Fraud

Fake credit cards are created by copying information from a stolen or compromised ATM card. This often involves skimming devices or compromised point-of-sale terminals.

• Skimming

Skimming devices are used on card readers. They capture magnetic stripe data from credit cards. This data is then used to create counterfeit cards.

• Lost or Stolen Card Fraud

When a credit card is lost or stolen, unauthorised individuals may use it. This can lead to fraudulent transactions. This continues until the cardholder reports the loss and the card is deactivated.

• Card Not Present (CNP) Fraud

Unauthorised online or phone transactions are made without a physical card. In this case, the information may have been obtained through illegal means.  

• Phishing and Social Engineering

Deceptive emails, messages, or phone calls aim to trick individuals. They try to get credit card information or other sensitive details.

• Identity Theft

Personal information is stolen to impersonate the cardholder. Impersonators then apply for a credit card or make transactions in their name.

• Mail Theft and Fraud

Criminals get access to credit card statements or new cards sent by mail. This enables them to make unauthorised transactions. 

To reduce the risk of credit card fraud, you can sign up for fraud alerts and set up credit transaction limits. Some of these preventive methods are listed below in brief:

• Use Contactless Cards

Using chip-based cards offer better security than magnetic strip cards. This is because by features like tap-and-pay, you do not need to swipe or insert your card into a machine.

• Monitor Transactions Regularly

Regularly monitor your credit card transactions through statements. This will help you identify any unfamiliar transactions and report them promptly.

• Ensure Secure Online Usage

When using your credit card online, ensure the website is secure and has an SSL certificate. Avoid clicking on links that may redirect you to fraudulent payment pages.

• Keep Your PIN and Credentials Safe

Change your credit card PIN frequently. Do not share your card details via calls, SMS, or email. Keep your net banking or mobile banking credentials secure.

• Manage Subscription Payments Carefully

For subscription renewals or autopay transactions, avoid saving your card details. Using different cards for subscriptions can also reduce chances of fraud.

• Set Lower Payment Limits

Set a lower payment limit on your credit card. In case of fraud, the majority of your credit will remain secure, and you will incur a smaller loss. 

To lodge a credit card fraud complaint, gather all relevant information and report it promptly. You can file a complaint with your bank, the cybercrime cell, or the police. Follow these steps:

1. Report the fraud to your credit card issuer via customer care, mobile app, or net banking to block your card

2. Gather proofs like transaction screenshots, ID, and address proof for documentation.

3. File a complaint with the cybercrime cell online at https://cybercrime.gov.in/ or call 1930

4. If a cybercrime cell is unavailable, lodge an FIR at the nearest police station with all required documents