Friday, March 20, 2009


Every now and then we come across cases of fraud involving credit card in print and electronic media. Most of these incidents are shocking, but, these can be easily prevented by the bonafide user if he takes due care of his card and its usage. To prevent ourselves from falling prey to these credit card fraudsters out there in the market , we need to know how do they operate and what exactly are the dangers involved.
As a user we need to careful right from the time we apply for the card till the time it is cancelled and safely disposed to prevent any abuse. So, lets see the possible frauds at every stage, right from application to termination/cancellation, and also understand what can you do about it.
1. Manipulation while filling the app form by the agent – Most of the people applying for credit cards just sign on the blank/partly filled app form and rely on the agent to fill in other details. While this may seem convenient to you, by doing so you will be exposing yourself to the grave danger of manipulation by the agent on your behalf. There have been quite a few instances where the sales agent has filled in either his address or his accomplishes address as the mailing address for the delivery of the card. Since there is no address proof required for credit card application, it virtually becomes very difficult for credit card companies to smell any foul here. The agent will also pose as customer during physical verification by the company and the card gets issued in your name but is delivered to the agents place. He receives the card and can simply go on swiping it on your behalf. The company will hold you responsible for the payment.
What can you do to prevent it – Fill the app form completely yourself. If you are genuinely interested in getting credit card for yourself, I am sure you can spare 5 minutes to fill app form as well. Remember applying for credit card is akin to applying for unsecured loan and hence deserves at least that much time from you.
2. Use the photocopy of front and backside of your credit card to misuse it on internet- There are lot companies which offer credit card users another credit card basis their old card from other companies. For that the generally ask the applicants to submit photocopy of the front side of the credit card. But, lot of agents take the photocopy of both front and bank side of the credit card as supporting documents. The front side of the card contains details like card number, name of the card holder and date of expiry of card etc while the back side contains highly sensitive CVV number (3 digit number). If one has access to all these details of any cardholder, the same may be used to transact on the internet on someone else’s behalf. And yes, you will have to pay the bill for it.
What can you do to prevent it – Never give the photocopy of back side of the credit card to anyone under any circumstance. The credit card companies themselves don’t need it.
3. Multiple applications on your behalf – Another very common fraud plaguing the credit card industry is the rampant use of applicants documents for multiple applications to various credit card companies on the applicants behalf. For example, you may have applied to credit card from Bank A and would have given the documents to the agent, but, that agent might take duplicate copies of your document and apply to Bank B Bank c and Bank D as well. This is possible because the documents required at almost all banks are same which is basic ID proof and income proof. The agent will in addition to this forge your signatures on other app forms and get them issued which may be used by others on your behalf.
What can you do to prevent it – Most of the credit card companies are aware of this and hence they do what is called “Back check verification from the customer:. Here they call the customer and check all his details as are entered in the app form. So , when they call you , check if they are calling from the same bank you applied , else tell them you didn’t apply. That should end the matter there as the company will not process your application. Also encourage them to check your postal address etc and validate it.
Sometimes the card is misused before the delivery of the card to you. The courier company delivers the card to the users and at times the card is removed from the packet and is used before its delivered to the user. Also sometimes , the magnetic strip from the card might be copied before the card is delivered to you. If someone has a copy of your magnetic strip on the card its as good as him having your card and can go around swiping it at your cost.
What can you do to prevent it – Always check the delivery packet for any signs of tampering. If so, refuse to accept it and let the credit card company know about it.
1. Hackers might hack your card details during net transactions –
There are lot of hackers out there to hack your card details as you enter them on sites while transacting on net. Like I mentioned earlier, once they have your details they can go on transacting on your behalf.
What can you do to prevent it – First and foremost, use your credit card only when you really need it like ticket bookings etc and not for routine purchases like CD, movie rentals etc. This will reduce the chances of hacking. Also use only secure sites which have strong security features. Look for a lock sign at the right hand bottom of the site. All relatively safe and secure sites have this sign. And lastly, use 2 card policy for transacting on net.
2. Magnetic strip might be copied at petrol pump/restaurants etc – There have instances where the magnetic strip on the back of the card containing all details were copied in a duplicate strip by waiters/attendants etc at restaurants and petrol pumps etc when the credit card was given to them for swiping. Copying the magnetic strip is very easy since it only requires them to swipe your card once to their copier and then they can merrily misuse your card.
What can you do to prevent it – Never leave your card with someone . Always be present when the card is being swiped and stay alert for any such activity in restaurants /petrol pumps etc.
3. Theft of card – Sometimes the card may be misused after it gets physically stolen from you. The person who stole might use it for shopping purposes and thus can set you back dearly.
What can you do to prevent it – As soon as you know about the theft , call the call centre and get it cancelled immediately. This will limit the damages. Also if the card is swiped at some shopping stores etc, you may use the CCTV footage of the shop to nab the culprit.
Most of the people using cards have no clue about the procedure of closing or surrendering the card. This opens up opportunities for agents to take advantage of the situation. I know of an instance where the agent went back to his customer(he had got him the card, hence earned trust of the customer) and collected the card from his for canceling it on his behalf. The customer had himself called the agent telling him he wanted to surrender the card. Then the agent went around shopping for his finest jeans and watches and mobiles and what not on that card. And guess who got the bill…the customer.
What can you do to prevent it – Whenever you intend to surrender the card, call the call centre and check the process. Generally the card companies advise the user to cut the card into 4 and then courier it to them along with a letter saying that they want to surrender the card. This removes the chances of misusing the card by anyone.

Hope that these tips will help you keep those fraudsters at bay.

Stay wise n Stay wealthy…

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