‘Precaution is better than cure’ is a saying that holds strong relevance when it comes to financial transactions. While most financial institutions take utmost care in ensuring the safety of their clients, there are a few precautions that you should be taking too.
A credit card is a boon for many, affording them the financial flexibility to buy or pay on credit, and repay the due amount at a later date as per the credit card’s billing cycle. However, along with this convenience, credit cards also hold a certain degree of risk; they work on a debt system and their misuse can cause havoc in one’s finances, and in turn life.
Credit card fraud is a term used to define theft or fraud that is committed using a credit card in a fraudulent manner. In this, one obtains unauthorized access to the funds in someone else’s account. Such scammers may use someone else’s card or card details to make unauthorized purchases.
For that very reason, it is prudent to be aware about the most common credit card frauds, to steer clear of any risk, apart from knowing about the safety features of your credit card.
The peril of credit card fraud has many different forms, the most common ones of which are: –
One of the oldest ways, this one is probably the most common way of losing your card. The good thing is, as soon as you lose your card, you can simply get it blocked and replaced. Plus, the layers of security (like the OTP) in place also help protect you in this situation. However, it is still a good idea to report the loss of your card as soon as possible.
A more sophisticated way of stealing information, skimming involves the perpetrator either clicking pictures of the card or tracing out the details of it. Some might even use a ‘skimmer’, a device that skims all your details on a magnetic tape. This device can be attached to card machines.
Phishing is something that you can easily avoid if you are careful. Scammers call up people and trick them into revealing their card details, including the CVV and PIN. NOTE: No financial institution will ever ask for your CVV, PIN, or OTP, so anyone doing so is obviously trying to defraud you.
Carding is another common way of stealing your credit card information. In this, a hacker illegally accesses a store’s payment processing server from where he gets the credit of the customers. This information is sold to a third party (Carder) who buys gift cards to make high end purchases with those details. However, the additional layer of security like asking for ATM pins or OTPs on registered mobile numbers can keep you safe, as long as you don’t share these details with anyone.
There have been multiple cases of credit card frauds. However, there is not much need to worry, for the security of financial institutions has been upped a lot in recent times. You are never held liable for spurious transactions, and with a little precaution, you can avoid frauds completely:
Sign up for SMS and email alerts and keep abreast with your card activity. Always make sure that your issuer has your latest details.
If something looks off in your credit card statement, immediately report it. Don’t use that card for a while, and if need be, you could get it blocked and request for a replacement.
No bank or financial institution will ask for your details, so be extremely wary of people who do. Also, never write down your PIN or CVV details, always memorize them.
Always transact via OTPs when you shop online.
In 2008, a student duo of Anup Patel and Anthony Thomas installed undetectable cameras at gas stations in UK and managed to make around 20,000 duplicate cards, stealing a total of $3.2 million. In 2009, hackers injected an SQL attack on 7-eleven’s card processing unit and compromised the data of 140 million credit cards. In 2013, hackers used a new form of malware to steal the details of 70 million cards from Target convenience store.
Though the likeliness of such frauds has reduced significantly, it is up to you to stay alert and proactive to protect yourself from credit card frauds. And remember, it is of critical importance to contact your issuer and report in case of loss or theft of credit card, so make sure you do that on priority in such instances.
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