A stolen credit card number is unlikely to be a financial loss to you, but it can be a major hassle, that is why it’s worth preventing fraud in the first place.
All though most of the banks have a zero liability policy feature on credit cards, it is advisable to inquire about this feature while taking a card.
Keep in mind that reporting of loss of credit card has to be done immediately to seek cover under this zero liability policy. Further, in case of a dispute on the lost or stolen credit card, the onus lies on the cardholder to prove it is not their fault. The bank or credit card issuer will have to refund or reverse the disputed transaction if the card holder is able to prove her innocence but it may take time.
If you notice any suspicious transaction on your lost card, immediately report it to the bank. Further, the disputed amount on your credit card can also adversely impact your credit score, as the bank will report the amount on credit card as overdue.
So as the proverb goes “Prevention is better than cure”, lets see how we can prevent credit card fraud.
For card holders, the problem lies in noticing and reporting a stolen credit card number, then waiting for issuance of a new card and modifying card number in autopay accounts linked to the stolen card number. And for many, there’s also an emotional component attached to a loss of credit card. It’s a feeling that one’s privacy has been breached as someone has his personal credit card.While it won’t be possible to avoid all credit card frauds, you can limit your vulnerability and avoid hassles.
Tips to prevent credit card fraud
1. BEWARE OF ‘PHISHING’
What is Phishing: It is a scam to trick consumers into disclosing their personal information, including credit card numbers. The scamster may use email, phone or text to elicit your credit card information. They sometimes try to gain trust by using popular logos and company names.
Fraud prevention: Be cautious of requests for personal information, regardless of the source. Independently verify the authenticity of those requesting your credit card number.
2. IDENTIFY ‘SKIMMING’
What it Skimming: It is when a person steals your card number during a normal transaction and uses it to make a replica of your card or conduct transactions online that don’t require a physical card. Skimming could happen when you give your credit card to a restaurant waiter, a call center operator, or at a fuel-refilling station. It can also happen through a skimming device secretly attached to a payment terminal, often at unattended ones such as those at ATMs.
Fraud prevention: EMV chip cards are helping to reduce fraud from device skimmers. But it’s advisable paying special attention to unattended payment terminals. If you notice something unusual in the card slot, alert an employee and do not use it.
3. USE DIFFERENT CARDS FOR AUTOPAY AND EVERYDAY SPENDING
Consider allocating one of your credit cards only for autopay accounts, such as phone bills, and website subscriptions and do not use that card for anything else. That way, this just-for-bills credit card is not at all being processed by restaurant waiters, or being swiped through fuel station pump readers. Use other credit card for everyday spending.
This way it won’t prevent fraud on your everyday spending card, but if one of the cards is compromised, at least you won’t have to bother about changing your autopay accounts and potentially incurring a late-payment fee or penal interest.
Generally, it is good to keep a record of where all your credit card number is stored.
4. PAY WITH YOUR PHONE
Smartphone-based digital payment services such as govt. of India initiated BHIM, Paytm, Mobikwik etc make paying at stores safer because they use scan and pay technology with every transaction. The merchant never gets hold of your credit card and thus reduces the chance of cloning.
5. OTHER SAFEGUARDS TO PREVENT CREDIT CARD FRAUD
- Never provide credit card information over sms, email or social media
- Don’t let other people use your credit card
- Don’t conduct credit card transactions on public Wi-Fi
- Strengthen online passwords to include random combinations of letters, numbers and special characters — different for each account, ideally
- Keep apps and anti-virus software up to date
- Trust your instinct. If a website seems shady, don’t use it. Check for SSL certification. The website should begin with https://
Discovering fraud and preventing more
Much of preventing fraud is limiting the damage after a credit card number is compromised.
- Act fast when your wallet is stolen. Your first task is to cancel those credit cards.
- Monitor your financial statements. Review credit card statements to figure suspicious transactions if any. Always subscribe for SMS notifications or use a mobile app of the credit card issuer to stay updated.
- Check your credit reports regularly. You’re entitled to one free credit report every year from each of the four credit bureaus in India. It is good to even subscribe to get a credit report at least quarterly from credit bureau to check for suspicious information, especially new credit card accounts you don’t recognise. Get your credit report for FREE now at Gullakh.com
Let’s look at the process to follow if you lose your credit card.
According to the master circular by the Reserve Bank of India (RBI), Frauds—classification and reporting, it is the banks’ responsibility to provide protection against and fight frauds. If you lose your credit card or it gets stolen, at first inform the bank and get it blocked to prevent unauthorized use.
You should file a report with the police and lodge a first information report (FIR) and get an acknowledgement of the complaint. The written application should contain your credit card number, and the date of loss. You can get the credit card number from the customer care number of your card issuing company. Copy of FIR may be required in case there is an unauthorised financial transaction online. If the fraud happens abroad, a copy of your passport with visa stamping would also be required to confirm that you had travelled to a foreign land. The bank will reissue a card in lieu of lost, stolen or damaged card.