When did you last update your e-mail address and phone number with your credit card issuer? Many do not even bother. Now, imagine being billed for fraudulent purchases made from your card
What do you do? First, of course, you inform the card issuer
, who will probably ask you to fill a declaration form. Doing this quickly is important as, according to rules, if the issuer isn't informed within 30 days of you receiving the statement, it is assumed that you have accepted it as accurate. So, if you were out of station and didn't notice it on time, you would be legally bound to pay.
Of course, if you had updated your contacts with the card issuer and got an alert, which comes within minutes of the transaction, you could have called up the issuer immediately and saved yourself the loss.
"Important communication, these days, happens through mails and phones. So, it is crucial that the customer keeps his bank updated so that he can be reached any time for checking a transaction's authenticity," says Mahesh Rajaraman, head of fraud risk management, HDFC Bank.
In India, according to a provision in credit card contracts
, the card-issuing company isn't liable for any fraudulent transaction unless the customer files a report immediately. Once reported, the card holder is no longer liable. So, be alert and look out for the red flags. Card frauds range from purchases made on lost or stolen cards to phishing, identity theft and traps set up through unsecured Internet transactions.Skimming or cloning
is something to be cautious about, especially when travelling abroad. In this, data in your card's magnetic stripe is recorded when swiped at a machine. This information is then used to make duplicates. It can happen anywhere, at a petrol pump or a restaurant. So make sure the card is swiped in your presence.
"To minimise risk, banks also advice customers to replace cards after trips," says Sumit Bali, executive vice president, Kotak Mahindra Bank.
HANDLE WITH CARE
- Check your credit card statement details carefully and opt for SMS/e-mail alerts.
- Never defer calling your credit card company if you do not recognise a transaction.
- Always keep your contact details updated with your card-issuing company.
- Transact only through securewebsites which have https in their URL address.
- Keep a low-limit card for onlinetransactions and choose a chip-enabled card.
Do you use your card online? Beware of cyber swindles
. These involve unauthorised use of card details, such as the card number, the Card Verification Value (three-digit code printed on the back side of the card), to make purchases online.
"One should register for online transaction passwords such as Verified by Visa or MasterCard Secure Code and avoid using public computers. Also, make sure that the transaction happens through a secure website, which begins with https," says Sanjeev Jain, CEO, GE Capital Business Process Management Services, which handles the technology and processing needs of SBI Cards.
Fraudsters also try account takeovers and identity theft
. This happens in two ways. One, a cardholders information is stolen and used for transactions where the card's physical presence isn't required, such as online purchases. Two, by placing a request for a new card using the stolen information. Monitoring your credit card report is your best defence.
"Check for unusual transactions, especially small ones, as fraudsters make these to check the card's validity," says Satkam Divya, business head, Rupeetalk.com.
Last but not the least, do not fall prey to phishing mails
(that appear to be sent by an institution you deal with but are not), SMSes or calls.FRAUD CONTROL
Usually, banks have dedicated transaction monitoring units and fraud detection systems to analyse suspicious patterns. So, if two transactions are made from different countries with the same card within a short period, the system will highlight this. However, it helps if the customer is also cautious. For instance, opting for cards with signature lamination and a photograph, registering for transaction alerts and transacting only through secured websites are common precautions.
If you are a frequent user, it may make sense to go for an insurance cover to take care of liabilities from loss and misuse. Banks usually have tie-ups with insurers. General insurers also offer standalone credit card policies, which cover all cards held by a customer under one policy. One alert to the insurance company can block all your cards, limiting your loss.
FOR YOUR GRIEVANCES
The RBI has appointed an ombudsman for redressal of complaints which your bank has failed to respond to satisfactorily. A bank must respond within 30 days from the date you lodged the complaint. In case of wrongful billing, the card company should provide documentary evidence within 60 days. If unsatisfied, the cardholder can go to the ombudsman.