credit card fraud protection

April 29, 2011

Tips to Avoid Credit Card Fraud

Filed under: Credit Card Fraud Protection — Tags: , , , , — @ 7:30 am

Tips to Avoid Credit Card Fraud

So many people across the globe are affected each year by credit card fraud and identity theft. It has become a priority for governments to enforce laws to help prevent consumers from having to suffer this awful experience. Although these laws are in place, it does not completely prevent credit card fraud from taking its toll on a person’s credit rating and bank account. It is more important than ever to keep yourself safe from fraud by guaranteeing personal information is secure.

The easiest way for a thief to steal your credit card information is to steal the credit card itself. This form of credit card theft is the easiest to trace and the easiest to catch early on. It’s always important to keep your card on you at all times and check regularly that it is still in your possession. Never leave your purse or billfold alone and if you are the victim of a mugging, report the theft immediately to police. Most credit card companies will reimburse you for any unknown transactions but the sooner you report it as missing the easier it will be to avoid disputes over which transactions were made without your knowledge.

Credit card statements are also a great way for thieves to get a hold of your information. It’s best to avoid paper credit card statements all together and opt for online statements that give you more up to date information and privacy. If you must use paper statements be careful about how you store and dispose of them. Make sure that you always keep important papers in a safe place and shred any documents that contain your credit card statement before you throw them away.

While this may seem like a hassle, it could save you a lot of trouble down the line, so play it safe. You never know who might be going through your garbage.

Never give out your credit card information over the phone unless you are making the call to a reputable source that you know and trust.

Even though most of this may seem like common sense, scammers know how to be manipulative and can often get the majority of uninformed people to fall in their trap. If you have a concern about a company that has contacted you, it’s always a good idea to write down the name and number of the organization and check it out with your local consumer protection office or Better Business Bureau. If a scammer is contacting people in your area, you can protect others and help put a stop to their actions by notifying the proper authorities. In all honesty it’s never a good idea to give out credit card information over the phone. There is always the chance that the wrong person could over hear you and write down your information but sometimes it will be necessary just make sure you are careful about it.

It’s now in these times that you are at the worst risk of becoming a victim of credit card information theft when you use your card on the internet. There are so many different ways that a thief can gain access to your information so it is of the highest priority to be extremely careful when using the internet for transactions. For starters, NEVER give out your information directly to anyone that you are uncertain about. Most individuals or small internet companies accept payment through trusted third parties such as paypal or neteller who protect your information and keep others from gaining access to it. If these sorts of payment methods are not an option then it’s better to just avoid making a purchase with them entirely unless they are a very well known and reputable site such as Amazon. Even when making a purchase with a major site be sure to check the URL and do not use links given to you via email. Never give out your information to someone who requests it via email even if they say they say they are from your bank because banks would not ask for such information.

When making a purchase over the net make sure you always use your own personal computer to make transactions. There are several programs that can show a potential thief which keys you have used and these criminals are known as keyloggers. So if one of these programs has infected your computer it could gain access to all of your personal information without much effort. Some spyware works in much the same way so when using your computer be sure to run anti-virus and anti-spyware checks regularly to locate any security problems.

Finally, check your statements regularly for any unknown transactions.

Sometimes thieves will get a hold of your information and wait months before they make a move and other times they will just take a little bit at a time in hopes that you won’t notice. There is a reason that credit card companies provide you with a statement so make sure that you check yours every single time you receive one.

Credit cards are extremely convenient and provide a valuable service, so don’t let all of these tips make you nervous. In many ways credit cards are still safer than cash because if your card is stolen you can still get the majority of your money back. Play it safe and report any problems early and you’ll be able to enjoy all the benefits credit cards have to offer, without the headaches.

April 28, 2011

Credit Card Fraud and Relevant Legal Provisions in India

Filed under: Credit Card Fraud — Tags: , , , , , , — @ 2:20 am

Credit Card Fraud and Relevant Legal Provisions in India

Today plastic is the convenient, easy and fashionable alternative to wads of paper. With one swipe, credit cards have changed the way we live. Unfortunately, along with the convenience has come related crime. Thus, the primary objective of this article is analysing this problem in a global as well as Indian perspective. An attempt has also been made to enlist the various legal provisions available as remedies if a person suffers from such fraud.

 Credit card fraud involves withdrawal of funds and obtaining of goods and services by using an unauthorized account. Otherwise inaccessible personal information stored on computers is stolen in order to use a card. Due to the virtual explosion of credit card business throughout the world, security has become critical in the entire process. There were about 60 million credit card holders in the sixties and according to an estimate, the number has gone up to more than a trillion now.

In India, credit card companies make a provision in their contract with the client that they, the company, would not be liable for the fraudulent transaction unless the client loses his/her card and reports the loss immediately. Sometimes the banks and credit card companies try to save their skin by inserting a clause in the relevant contract. This is purported to absolve the company in case a fraud occurs on the stolen card and the client fails to notify the loss in time. This unilateral provision however has not stood the test of legal scrutiny. The courts have placed the burden of loss on the issuers.

In India, the Mail Order Telephone Order (MOTO) type account for the bulk of credit card frauds. This occurs when the card is not actually presented, but the details are given on the application form to buy goods or services or when the transaction is done on the telephone.

Fraud through fake cards is not as rampant in India as in the USA. Techniques have been developed whereby the number and other information on the magnetic strip is erased and a new number is embossed. When the card does not work on the swiping machine, the merchant manually processes the details of the card to complete the sale. This procedure is called skimming of the cards.

In the USA, identity theft is also quite prevalent and is supposed to be one of the fastest growing offences in America. The fraudsters adopt another person’s identity to gain access to their monetary sources. In the case of online transactions, ‘site cloning’ is resorted to where the site clone created is made to look like the original site in order to obtain the credit card details of unsuspecting customers. Similarly, false merchant sites are also created where cheap goods lure customers into giving their card details.

Scared by the ever increasing cases of credit card fraud, the affected companies and banks have taken various steps to minimize it. Manual reviews of the transactions on the card are undertaken, but this requires a high level of human intervention and increases costs. In the USA, Address Verification System (AVS) has been developed for use in the ‘card not present’ scenario. The system is designed to check whether the address given by the buyer matches with the one on record.

Visa has devised a Payer Authentication System based on PIN similar to the system used on ATM cards. This is a channel between the bank and the customer used to authorize online transactions. With the increase in cross border ecommerce the issuers in India will have to update their arsenal to combat the forgers on the same lines as their Western counterparts. The Information Technology Act and Rules, passed in 2000, provide penalties for the tampering of computer source documents and hacking of computer systems. No specific mention has, however, been made of Credit cards or financial transactions. The RBI has formed the Credit Information Bureau of India (CIBIL) in collaboration with Dun and Bradstreet who will maintain the records of all individuals who want to avail of finance from banks and credit card companies in India.

The Indian Penal Code contains provisions to check economic crimes such as Bank Fraud, Insurance fraud, Credit card fraud, stock market manipulation, etc. The local police deal with the IPC crimes falling under the broad categories of ‘Cheating’ (Section 415-424), ‘Counterfeiting’ (Coins & Stamps Section 230-263A and Currency Section 489A-489E) and ‘Criminal Breach of Trust’ (Section 405-409).

 


Online Credit Card Offence & Indian Law:

 

So far as Indian legal position is concerned, any offence pertaining to online payment through credit cads will come within the purview of Information Technology Act, 2000 read with relevant provisions of Indian Penal Code, 1860. Section 378 of the Code defines the term “theft” as follows:

 

“Whoever intends to take dishonestly, any property, out of the possession of any person without the consent of that person moves the property in order to such taking, is said to commit theft.”

 

In order to commit theft following elements are required to be satisfied:

(a) The intention must be dishonest.

(b) Such property must be movable in nature.

(c) Such property must be taken out of the possession of its owner.

(d) Such property must be taken without the consent of the owner.

(e) Such property must be removed from its original place to another.

Now we have to examine whether online credit card theft satisfies the abovementioned requirements in order to book the offender to justice. This definition, if interpreted in strict sense, does not include the online theft of credit card information. But, if a merchant dishonestly obtains the blank purchase slip and forges the signature of the cardholder’s signatures on it and thereafter obtains the payment from bank, he can be booked under the offence of forgery.

 

Hacking has become an important tool in the hand of cyber criminals to take away the confidential information relating to credit cards and use it illegally for their personal advantage i.e. purchasing goods or online transaction of money etc.

 

To deal with this menace, our Parliament has been enacted the Information Technology in the year 2000. Following penal provisions of this statute are relevant to mention here.

 

Section 66- This section provides the following penalties for hacking with computer systems:

 

(1) Whoever with the intent to cause or knowing that he is likely to cause wrongful loss or damage to the public or any person destroys or deletes or alters any information residing in a computer resource or diminishes its value or utility or affects it injuriously by any means, commits hack.

(2) Whoever commits hacking shall be punished with imprisonment up to three years, or with fine which may extend up to two lakh rupees, or with both.

The offence under this Section is cognizable and non-bailable.

 

Section 43- Clauses (a), (b) and (g) of Section 43 state that if a person has unauthorized access or secures access to computer, computer system, computer network or downloads copies or extracts any data from such computer, computer system, computer network or even assists another person to facilitate access in the aforesaid manner respectively, he shall be liable to pay damages by way of compensation not exceeding one crore rupees to the person so affected.

It is quite apparent from the above that besides legal protection it is necessary to carefully examine the technological and contractual protection existing within the system because law is not an alternative to other security measures required to be taken by the cardholder while making online payment.

 

 

 

 

 

 

 

 


Conclusion


In India, credit card fraud is mostly limited to the physical space. Online con jobs make up just about 1% of the total numbers here, unlike 40% in the developed world.

But, as consumers graduate to the shop-easy internet and pay with their cards, instances of fraud are bound to rise. While we don’t have statistics, as access to the web increases, reported cases of card fraud are estimated to  rise at 20-30 % every year. In online transactions, contracts are one-sided and the customer is always held responsible in case of fraud.

Phishing, where a consumer gets a fictitious email from a fake site or blog seeking sensitive card information, is a commonly-used defrauding mechanism. To top it, people are careless in offering their card details.

Almost all the banks issuing credit cards issue various guidelines and suggestions to the customers from time to time in order to cut short the rate of credit card frauds and misuse to a minimum possible level.

Thus, we can conclude that with the help of the legal remedies available as cited earlier in the Article, penal action can be brought against the offenders who are held liable for credit card frauds and misuse.

 

 





 

 

 

More Credit Card Fraud Articles

April 26, 2011

Another Reason to Protect yourself Against Credit Card Fraud

Filed under: Credit Card Fraud Protection — Tags: , , , , , , , — @ 9:31 pm

Another Reason to Protect yourself Against Credit Card Fraud

We all worry about falling victim to credit card fraud, and this has become an even greater worry over recent years because of sophisticated new scams used by fraudsters as well as because of the rise in credit card fraud. With the global credit crisis still causing issues, and with the recession underway, credit card fraud is rocketing, and officials have said that it could be set to get much worse.

The rise in credit card fraud deals a double blow for victims, as not only do they find themselves on the receiving end of this type of activity, but they may even find that their banks are unwilling to assist them. This is because an increasing number of banks are now refusing to compensate victims of credit card fraud amidst concerns about the rising level of this sort of activity.

According to reports an increasing number of banks are now refusing to compensate victims of this type of fraud, and this has made it even more important for consumers to ensure that they protect themselves against this type of fraud.

Research shows that over the past twelve months around one in four of us have fallen victim to some type of card fraud, which equates to around twelve million people. This reflects just how this type of fraud is rising, and goes some way towards explaining why banks are becoming so reluctant to compensate victims.

Whilst chip and pin technology was supposed to help to cut down on card fraud in the UK many officials have said that all it has done it transferred responsibility for card fraud from the banks to customers and retailers. One industry official said: “The tactic of rejecting refunds to victims of card fraud is hard-wired into the policy of the banks. It is an ongoing scandal.”

However, Sandra Quinn from APACS responded: “It is completely wrong to say chip and PIN has transferred responsibility for card fraud from banks to customers. Some banks have tried to argue that if a PIN has been used then the claim will be rejected. That is balderdash.”

Recently HSBC announced that were implementing a new fraud prevention system, a system that would automatically check every single transaction that was made with a HSBC credit card to check if it was fraudulent or not.

The software would check for the likelihood of the transaction being fraud by comparing it against the normal patterns of use of the cardholder.

HSBC even said in the media regarding the launch of it’s new fraud detection system that chip and PIN had only really worked for 18 months, until the fraudsters found a way to bypass it.

New data sharing between credit card companies could also be used in the future help to reduce fraud.

If you are worried about fraud make sure you follow these simple 7 rules:

1. Always hide and cover your PIN number entry when paying at check outs or using cash machines.
2. Never write your PIN number down on a piece of paper or electronically on your mobile phone or computer.
3. Watch out for unusual activity at cash machines, including people hanging about, or unusual devices on or around the cash point (fraudsters often install cameras to watch people enter their PIN numbers).
4. If you shop online make sure your anti-virus software is running and up-to-date and your Internet connection is secure (for example password protecting any wireless network you have in your home).
5. Don’t give your credit or debit card or any personal details away in an e-mail or on instant messaging or social networking sites. Remember, banks will never ask for any personal details or passwords via email.
6. If you’re eating out, don’t let anyone walk away with your credit card, make sure they process the payment at the table and if they need to go to the till make sure you go with them. Don’t take your eyes off your card!
7. Check your statements! Either online or when you receive them in the post. Check every item and make sure you know you made it. If you see anything you don’t recognise tell your credit card issuer as soon as possible.

April 25, 2011

Q&A: A credit card with superior fraud protection?

Filed under: Credit Card Fraud Protection — Tags: , , , , — @ 4:19 pm


Question by Candy Ng: A credit card with superior fraud protection?
A couple of months ago, I saw a charge on my credit card statement from Disney that I never made a purchase to. The charge was about $ 3500 and I was equitable angry. I called my credit card company and they said they will investigate into this because I don’t have fraud protection or whatever but all my other credit cards in the past have always come with fraud protection so in case of any purchase you are protected. I told them to block out the company and then cancelled my card because I was scared. The credit card accompanied took awhile to take care of it, and it’s inactive pending till this day. I want to sign up for another credit card with great rewards, but well-nigh importantly has SUPERIOR fraud protection so in case anything like this happens, they will take care of it and reverse the transaction of whatever amount is charged. I mean I got scammed 3500 dollars and I need to make sure the credit card I have will be reliable and completely safe no matter what. So, does anyone know of any credit card company and type of card that I can sign up for. I will need around $ 5000 limit. I don’t want to go too high but not too low either. There are so many cards out there, and I demand aiding choosing. Also, NO annual or monthly fees! But nigh importantly, I need GREAT fraud protection and people who will help me in case of scams and stuff. Thanks!

Best answer:

Answer by Mike Hawk
I personally use the AMEX starwood honour card. They offer %100 consumer protection along with great rewards



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April 23, 2011

Q&A: What is the penalty for credit card fraud?

Filed under: Credit Card Fraud — Tags: , , , — @ 6:22 am


Question by THE ELK SLAYER: What is the penalty for credit card fraud?
State: Idaho Amount Spent: 4000.00My wife apparently got a credit card in her moms calling. Spending the above amount on paying off bills and other debts. I had no clue of this until yesterday only cause her mom found out. had hopes of nobody ever finding away. So, this has been turned over to the fraud dept. Her mom didn’t do it, the credit company did. Mom is not pressing charges, however she is upset. Can she stop the fraud investigation? What can my wife and I look forward to in all this?

Best answer:

Answer by Rick B
Why should she stop it? Even if she could? Your wife not only defrauded someone, she did it to someone who trusted her. That is levelling WORSE than doing it to a stranger.In any case, it is out of the mom’s hands.If this is her first offense, she will probable get a ticket, have to pay back the full amount, and will be on some form of probabtion. She might get some community service if she gets a good judge.



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