Credit Card Fraud

Raman Singhvi, Jaipur has Saving account at Punjab National Bank, Vaishali Nagar, Jaipur and has a credit card. On 18.07.2011 he made last transaction through his credit card .On 29.07.2011 in the afternoon he received SMS from the bank that some transactions were made through his credit card for Rs. 12,570/- on www.yatra.com, and Rs. 9,368/- on www.ebay.com. He was surprised to see this message as he did not make any transaction through the above websites. He immediately asked Punjab National Bank’s customer care centre to block his credit card.

What is a card fraud?

Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of payment in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Credit card fraud is also an add-on to identity theft.

Card account information is stored in a number of formats. Account numbers are often embossed or imprinted on the card, and a magnetic stripe on the back contains the data in machine readable format. Fields can vary, but the most common include:

How criminals steal your identity?
  • Name of card holder
  • Expiration date
  • Account number
  • Verification/CVV code
What types of Credit Card Fraud are there?
  • Mail/Internet order fraud

The mail and the Internet are major routes for fraud against merchants who sell and ship products, as well Internet merchants who provide online services. In this, fraudster presents stolen card information by indirect means, whether by mail, telephone or over the Internet to merchant site and orders the delivery of goods of lower value to avoid suspicion

  • Account takeover
  • There are two types of fraud within the identity theft category, application fraud and account takeover.
  • Application fraud occurs when criminals use stolen or fake documents to open an account in someone else's name. Criminals may try to steal documents such as utility bills and bank statements to build up useful personal information. Alternatively, they may create counterfeit documents.
  • Account takeover involves a criminal trying to take over another person's account, first by gathering information about the intended victim, then contacting their bank or credit issuer- masquerading as the genuine cardholder-asking for mail to be redirected to a new address. The criminal then reports the card lost and asks for a replacement to be sent. The replacement card is then used fraudulently.
  • Some merchants added a new practice to protect consumers and self reputation, where they ask the buyer to send a copy of the physical card and statement to ensure the legitimate usage of a card.
  • Skimming
  • Skimming is the theft of credit card information used in an otherwise legitimate transaction. It is typically an "inside job" by a dishonest employee of a legitimate merchant, and can be as simple as photocopying of receipts. Common scenarios for skimming are restaurants or bars where the skimmer has possession of the victim's credit card out of their immediate view. The skimmer will typically use a small keypad to unobtrusively transcribe the 3 or 4 digit Card Security Code which is not present on the magnetic strip.
  • Instances of skimming have been reported where the perpetrator has put a device over the card slot of a public cash machine (automated teller machine), which reads the magnetic strip as the user unknowingly passes their card through it. These devices are often used in conjunction with a pinhole camera to read the user's PIN at the same time.
  • Carding

Carding is a term used for a process to verify the validity of stolen card data. The thief presents the card information on a website that has real-time transaction processing. If the card is processed successfully, the thief knows that the card is still good. The specific item purchased is immaterial, and the thief does not need to purchase an actual product; a Web site subscription or charitable donation would be sufficient. The purchase is usually for a small monetary amount, both to avoid using the card's credit limit, and also to avoid attracting the bank's attention.


Safety tips to avoid Credit Card Fraud
  • Credit Card
  • There is a critical 3-digit number on the back of the card called CVV (card verification value). Always erase and memorise it.
  • Better hang around when your card is being swiped.
  • A card's magnetic strip has the basic details of the cardholder. But the card also comes with a blank space for you to sign in. You must sign on the card to avoid unauthorized use.
  • Always sign up for SMS/EMAIL alerts for all transactions.
  • Always check your monthly bank statements for any suspicious transactions
  • Disable your credit card account if you are not using it.
  • Shred the financial documents with care
  • Do not store your personal and credit card information on the computer
  • Do not write the PIN number down.
  • During the online transactions, check if the web address starts with HTTPS, which ensures the encryption of all important data.
  • Never delay to report a lost credit card as the consequences can be highly disastrous.
  • Close the account that you suspect is being hit by the fraud.
  • Thoroughly check the authenticity of the firm, the website, or any other transactional society where your money would be flowing through.
  • Never give away your personal information over the phone unless you are sure of the person the other end.
  • Take a pause before venturing into any kind of online transaction and decide upon the authenticity of the transaction.


Safety tips to avoid Debit or ATM Card fraud
  • When you type your PIN number at an ATM, make sure that you sufficiently obscure the keypad from being viewed by an onlooker
  • NEVER let the shopkeeper take your debit card out of your sight. There is no need for him/her to do so, unless he/she intends to do something unlawful.
  • Secure your debit card physically by storing it at a safe place.
  • NEVER write your PIN number at a place where it can be seen by someone who you do not intend to show it to.
  • ALWAYS destroy the receipts from merchants that you no longer require, especially when you have paid for using your debit card.
  • If you do not receive your debit card or PIN number from the bank within a reasonable amount of time after requesting one, check with the bank when it was sent and when you should expect to receive it. It may have been picked up by someone else in transit.
  • When at an ATM, make sure that no external devices are attached to the ATM machine and no wires are hanging around.
  • Check your account statements carefully for transactions that you may not have made.


Using ATM machine
  • Safeguard your credit cards and ATM cards at all times.
  • If you notice something suspicious about the card slot on an ATM (like an attached device), do not use it and report it to the responsible authorities.
  • Never disclose your ATM card and credit card PIN numbers to strangers.
  • Beware of your surroundings while withdrawing money at ATM centers. Do not crumple and throw away the transaction slips or debt card memos: read them, make a mental note of the details and then, either tear them or shred them to trash.
  • Periodically check your account balances on Internet or by requesting your bank or credit card company to send you statements to ensure that no transactions are happening behind your back.
  • While entering any personal identification numbers, use your discretion to shield the keypad so that your hand movements are not very visible and you enter your passwords secretly.
  • Be careful while withdrawing money from ATM Machine the attacker can shoulder surf to see your PIN.
  • Incase any one behind you while withdrawing money just tell the ATM Security guard to ask him to wait out.
  • Draw the cash only in well lit areas and secured ATMs.