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Credit Card Fraud: Tips to Protect Yourself From Credit Card Scams
29 June 2022
Credit card fraud aims at stealing your credit card details and using it to make purchases put on your account. As the name suggests, credit card fraud is an illegal act which can be executed by someone stealing your card, hacking your accounts, calling about fake lottery wins, stealing email accounts, and even peeping over your shoulder to see your passwords and CVV.
What Is a Credit Card Fraud?
A credit card fraud can be understood as identity theft, where a fraudster steals your credit card credentials to execute financial transactions from your card without your knowledge. This can be done by physically stealing your card, skimming your card details, or simply by knowing your credit card number and other information.
What are the Types of Credit Card Frauds?
There are various credit card fraud types, and they can be broadly classified as follows:
Identity Theft: This is one of the most common types of credit card fraud wherein a person uses your personal information like your name, account or card number, date of birth, etc., to apply for a new credit card in your name. Once the application is approved, the fraudster can use your credit card to make unauthorized purchases.
Account Takeover: In this type of fraud, a fraudster gains access to your credit card account and uses it to make unauthorized transactions. This can be done by stealing your credit card details or guessing your password.
Fake Credit Card or Application Fraud: In this type of fraud, a fraudster creates a fake credit card using your personal information to make unauthorized purchases.
Card skimming or PoS Fraud: Card skimming is a type of credit card fraud wherein a fraudster attaches a device to an ATM or a gas station pump to copy your credit card details. The fraudster can then use your credit card details to make unauthorized purchases.
Keystroke Logging: Keystroke logging is a type of credit card fraud wherein a fraudster installs malicious software on your computer to track the keystrokes you make. The fraudster can then use your credit card details to make unauthorized purchases.
Phishing: Phishing is a type of credit card fraud wherein a fraudster sends you an email or a text message that looks like it’s from your bank or credit card company. The message will ask you to click on a link or download an attachment. Once you do so, your personal information like credit card number, CVV, etc. will be stolen.
The Reserve Bank of India (RBI) has revised the guidelines for credit card fraud, defining where the buck lies. Protecting the customer’s interests, the RBI has made credit card fraud rules stricter for credit card companies. Per the guidelines, if a customer reports a credit card fraud within 3 days of receiving the statement, the credit card company will be liable to refund the entire amount.
In case the customer reports the fraud after 3 days but within 60 days of receiving the statement, then the liability will be capped at Rs. 25,000.
However, if the customer does not report the fraud within 60 days of receiving the statement, they will be liable for all the transactions.
How to Detect a Credit Card Fraud?
Some of the common ways for credit card fraud detection in India:
Unauthorized or suspicious transactions: If you see any unauthorized or suspicious transactions on your credit card statement, then it’s likely that your credit card has been compromised.
Missing statements: If you stop receiving your credit card statements and you haven’t particularly asked to unsubscribe you, there is a possibility someone has stolen your credit card and is using your card to make unauthorized purchases without your knowledge.
Receiving calls, text messages or emails from unknown numbers: If you receive calls or messages from unknown numbers asking for your credit card details, then it’s likely that you’re being targeted by a fraudster.
Discrepancies in your credit report: If you see any discrepancies in your credit report (new credit card applications, credit card loans, etc), then it could be a sign that someone has stolen your identity and is using your personal information to apply for new credit cards.
Higher than usual credit card bills: If you see a higher than usual credit card bill, your credit card may have been used to make unauthorized purchases.
How to Report a Credit Card Fraud?
If you suspect your credit card has been compromised, you should immediately report the fraud to your bank or credit card company. You can directly call the customer care toll-free number and report the scam to the concerned authorities in the bank. Alternatively, you can log into your bank’s net banking portal and report the fraud. You will also have the option to hotlist or block your card if you wish to.
You should also file a credit card fraud complaint at the local police station and obtain a copy of the FIR. This will be helpful in case you need to submit it to your bank or credit card company for further investigation.
In addition, you should also file a complaint with the RBI’s Office of the Fraud Inspector General (OFIG) if you suspect you’ve been a victim of credit card fraud.
How Can You Protect Yourself From a Credit Card Fraud?
Here are some tips that can help you protect yourself from credit card fraud:
Never share your credit card details with anyone.
Always keep your credit card in a safe and secure place.
Never write your credit card PIN on the back of your credit card or anywhere else.
Never save your credit card details on your computer or mobile phone.
Always check your credit card statements carefully and immediately report any suspicious transactions to your bank.
If you suspect your credit card has been lost or stolen, you should immediately report the suspicion to your bank or credit card company.
You should also keep track of your credit score and credit report regularly to check for any suspicious activity.
What’s the Difference Between a Credit Card Fraud and an Identity Theft?
Credit card fraud is when someone uses your credit card to make unauthorized purchases. It will only affect your finances since the fraudster gets their hands on your credit card(s) and its related details.
On the other hand, identity theft can be understood as someone stealing your personal information like your name, date of birth, social security number, etc. and using it to apply for new credit cards or loans in your name. A person can steal your personal information, pretend to be you, and use your credentials for financial gain.
There are a few things that can trigger a credit card fraud alert and indicate unauthorized purchases, such as:
Suspicious or unusual activity on your credit card
Unexpected charges on your credit card
Your credit card is lost or stolen
You receive a letter from your bank or credit card company about suspicious activity
You receive a call from your bank or credit card company about suspicious activity
If you think that you’ve been a victim of credit card fraud, then you should immediately contact your bank or credit card company. You should also file a credit card fraud complaint and a complaint with the RBI’s Office of the Fraud Inspector General.
FAQs on Credit Card Fraud
Q1. What are credit card fraud types?
Ans:The different types of credit card frauds are identity theft, account takeover, keystroke logging, PoS fraud, application fraud, and phishing.
Q2. Does the customer have any liability in case of credit card fraud?
Ans:The customer does not have any liability in case of credit card fraud if the incident is reported within 3 days of receiving the credit card statement. If it is reported within 60 days of receiving the statement, the customer’s liability will be capped at Rs 25,000.
Q3. How can I report credit card fraud?
Ans:You can report credit card fraud by calling your bank’s customer care number, logging into the bank’s app, or the netbanking portal.
Q4. Is credit card fraud and identity theft the same thing?
Ans:No, credit card theft involves someone stealing your credit card details to make unauthorized transactions. Identity theft involves someone assuming your identity to execute financial frauds.
Q5. What is PoS fraud?
Ans:This is a type of credit card fraud wherein a fraudster attaches a device to an ATM or a gas station pump to copy your credit card details and make unauthorized transactions.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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