With more Indians embracing digital payment methods, the threat of online scams like credit card fraud is becoming more pervasive than ever before.
- In the financial year 2020, more than 50,000 cases of payment card fraud had been registered in India, the Government disclosed.
- More than Rs.228 crore was lost in these fraudulent transactions.
Cardholders, thus, need to be more cautious while swiping their cards at PoS machines or entering transaction details online. In such a scenario, the best one can do is to gather more information about card frauds and finding ways to reduce the financial risks they present.
Common credit card fraud methods
With the advancement of technology, fraudsters are also coming up with new tactics to bypass the security barrier and initiate credit card fraud.
Following are some of the most prevalent methods through which scammers extract information through any payment card, including a credit card.
Most of the cases of credit card fraud reported in India involve phishing scams. Generally, criminals send emails impersonating any reputed financial institution and instigate cardholders to share payment information like card details.
In most cases, card users receive an email informing them that there has been third-party intervention in their account, and their card details are required to block it. Therefore, if one receives such an email, he/she should first contact the respective financial institution and cross-check.
However, individuals can also opt for Wallet Care insurance cover provided by Bajaj Finserv under its Pocket Insurance & Subscriptions. This insurance plan comes with a 24/7 card blocking facility if the insured person falls prey to any such malicious activity.
The scammers also implement voice phishing scams, also known as Vishing. They contact the target over the phone, impersonating a financial institution, and trick the cardholder into sharing payment information.
To make it possible, they take the help of social engineering to access the target’s personal, financial details and trap them using internet telephone service (VoIP).
- Keystroke logging
You can fall prey to online fraud if hackers can manage to install any spyware software. Consequently, when you enter card details to make a credit card payment, they can retrieve the user ID, password, and other necessary information.
They can later use that information to extract more information and initiate unauthorised transactions using the card. To avoid financial repercussion, you can opt for pre-emptive measures like purchasing a Fraudulent Charges Cover. This insurance policy will allow you to claim the amount lost due to such credit card fraud.
Even when you are not making an online credit card payment, you can fall prey to fraudulent activities. The fraudsters generally carry a data skimming device that steals all the card details within seconds.
- As per a report by the Ministry of Electronics and Information Technology, between January and August 2020, more than 6 lakh cases of cybersecurity incidents were reported.
Scammers usually place this skimmer at ATM card slots or PoS devices. Thus when the targeted individual swipes his/her card, it skims all the details and stores them.
- Lost card
You can also become a victim of credit card fraud if your card is stolen or lost. Since a credit card works in “buy now, pay later” mode, anyone can use the card to make payments, especially if it is a contactless one. In that case, you have to pay the bills later.
Along with knowing about these credit card fraud tactics, individuals also need to follow some essential tips to keep themselves safe from such cyber threats.
Tips to avoid credit card fraud
With India recording almost 375 cybercrime daily, it is pre-emptive to adopt some measures to minimise the risk of such threats.
Some of the most effective ones are listed below.
- Do not share card details online
Individuals should limit sharing their credit card details online, over phone calls, or email to deal with phishing and vishing scams.
Along with that, try not to disclose card details to unknown callers or emails from unknown sources. You should also avoid using shared devices or public networks to make credit card bill payment.
- Change PIN frequently
Cardholders also need to change their PIN frequently to ensure card safety. It is also advisable to invest in antivirus and cybersecurity software that blocks third-party and removes malware.
Individuals can look into Identity Assure insurance policies that cover the expenses for legal procedures in case of identity theft due to this scam.
- Check card statements regularly
Cardholders should check their statements carefully before initiating credit card bill payment online.
It would allow them to detect any discrepancy at once and request a refund from the card issuer.
Thus, following these tips, you can remain safe from any credit card fraud. It is also advised to limit the use of multiple credit cards to minimise financial loss if such scams occur.