Picture this. You get a call from an unsolicited number claiming it’s your bank’s executive. The caller apprises you of a contest that you’ve won and requests your financial details to transfer your prize money. This convinces you. So much so that you don’t hesitate to share your debit/credit card details, your CVV number and PIN number. Within minutes, you get a string of SMSs regarding financial transactions from your account that you surely didn’t initiate! Welcome to the world of financial frauds where such debit/credit card frauds are an everyday affair. Here are the different types of debit and credit card frauds, and how you can prevent such payment card frauds.

What are Payment Card Frauds?

Payment card frauds are banking crimes that involve the misuse and tampering of credit, debit and ATM card information. Debit or credit card frauds take place when one illicitly accesses your financial details and/or conducts unauthorized transactions. This is possible when the perpetrator gains confidential details such as payment card number, CVV number or even the PIN.

Fraudsters use various techniques to gain the victim’s trust and extract confidential details to dupe his/her hard-earned money. The following sections shall illustrate the different types of payment card frauds that one must be aware of.

Types of Payment Card Frauds

An RTI query report shows that nearly 21,860 debit/ATM card frauds and over 35,551 credit cards were reported in India from 2015 – 2017. The financial capital of our nation, Mumbai, reported a rise of 42% in payment card frauds.

Prevention is better than cure. It is essential that one is wary of the various types of debit and credit card frauds rampant these days. This shall enable them to identify any such instance and take prompt steps to avoid being a victim.

1. Card Skimming & Cloning

This is one of the latest techniques that fraudsters are using to trap victims in debit and credit card frauds. In this, perpetrators attach a skimming device in the card reading slot of an ATM. On swiping a card, this discreet device reads the information from the magnetic strip of the card. Perpetrators then use this information to generate a cloned card that is an exact duplicate of the victim’s card. They then use this card to withdraw money or engage in unauthorized transactions.

2. Shoulder Surfing

Have the experience of an overtly friendly bystander inside the ATM vestibule trying to offer you an unsolicited help? Beware! Shoulder surfing is a common technique to extract the PIN code and entrap a person in payment card frauds. It usually occurs in unmanned ATM vestibules where the perpetrator tries to peer over the user’s shoulder or distracts him/her after entering the PIN. Such banking crimes are also common at the Point of Sales (PoS) counters at shops, restaurants, and other merchant outlets.

3. Phishing/Vishing

As explained in the introductory paragraph, fraudsters are now resorting to voice calls and emails to gain the victim’s trust. The common tricks include expiring credit card points, victory in a contest/lottery and sudden de-activation of online banking services. Fraudsters usually call as a bank executive to persuade victims into sharing their card and CVV number along with the PIN. Sometimes, victims may also receive a phishing email containing a link which upon clicking leads to a fraudulent website that extracts their financial information.

4. Loss of Card or PIN

Let’s accept it, we’ve all resorted to noting down our payment card PIN numbers on paper or in our mobiles at some point or the other. This sure saves us from embarrassing moments while standing at a PoS counter or inside an ATM vestibule. However, this habit can end in grave consequences if you lose your phone or anything containing your financial details. For that matter, even when you lose your card, you must block your card immediately. This avoids its misuse by perpetrators.

5. Keystroke Logging

In simplest terms, keystroke logging is the action of secretly recording the keystrokes on a keyboard. It could be the keypad of an ATM or that of the laptop or mobile phone. Fraudsters use special software and hardware to execute this. This enables them to obtain the payment card PIN and thus accomplish net banking or debit and credit card frauds.

How to Prevent Payment Card Frauds?

You can avoid being a victim of the different types of payment card frauds by adopting the following preventive and precautionary measures. Make sure that you not only follow these but also share them with your kith and kin.

Tips to Stay Safe When Using an ATM

1. Check the ATM Machine

Before using an ATM, make sure that you’ve checked it thoroughly. Yes, it does sound creepy but it will protect you from the obnoxious techniques of card skimming.

2. DO NOT Entertain Unsolicited Help

Whenever possible, avoid visiting ATM vestibules that do not have a security guard. We recommend that you use your own bank’s ATMs or those attached to a bank branch. Deny any unsolicited help and make sure that you are alone in the vestibule when engaging in a transaction.

3. Cover the ATM Keypad

Most ATM vestibules have signage to encourage users to practice this simple habit. Some fraudsters install hidden cameras near the machine to record the PIN number and misuse it later. Therefore, make sure that you cover the keypad while entering your PIN number to stay safe from hidden cameras. In the wake of increasing debit and credit card frauds involving skimming and card cloning, most ATMs these days have a hood to cover the keypad area.

Online Precautions to Avoid Debit & Credit Card Frauds

1. AVOID Clicking on Unknown Links

If you receive a mail from an unknown source urging you to click on a link, NEVER do so! Such links may lead to a malicious website that may not only covertly extract your financial details but also install malware into your computer or smartphone. Click only on links that you trust and which appear in emails from trusted sources.

2. Visit Safe Websites

Choose reputed and well-known sites for online shopping that have the Secure Sockets Layer (SSL) certification. You can identify such sites with the ‘lock’ symbol next to the URL box in the browser. Also, make sure that the websites you visit you the ‘https’ protocol instead of ‘http’, ‘s’stands for secure.

3. Install a Genuine Antivirus Protection

Time and again, cyber security experts emphasize the need to install and use genuine antivirus software. This protects your computer and smartphones from malicious software that may leak your confidential details to fraudsters. Additionally, you can install Identity Theft detection applications on your phone that erase data remotely if it’s lost or stolen.

4. Hide Your CVV

Make sure that your CVV is masked by asterisks whenever you enter it during an online transaction. This is especially crucial when engaging in financial transactions on a foreign website where CVV is the only verification factor. Consider using a virtual keyboard to avoid keystroke logging.

Tips to Stay Safe When Using a Public Wi-Fi

1. Avoid Engaging in Financial Transactions

To the extent possible, avoid engaging in financial transactions when connected to a public Wi-Fi or Hotspot. Unsecured Wi-Fi networks and public hotspots are the hub spot of identity thefts and other such banking crimes.

2. Log Out

Make sure that you log out from your online banking, email and social media accounts when using a public system or when connected to a public network. This will ensure the security of your confidential personal and financial details.

3. Change Passwords Frequently

Make sure that you use a unique password for all your online accounts and keep changing them at regular intervals.

Offline Precautionary Measures

1. NEVER disclose financial details

Never reveal your password, CVV or PIN code to anyone. And by anyone, we literally mean ANYONE! Be wary of emails or messages that seek your financial details as they could be traps for payment card frauds.

2. Be Aware of Your Financial Statements

Make sure that you review your debit and credit card statements at regular intervals. This will help you identify any unauthorized transaction immediately and alert the bank.

3. Stay Alert at PoS

When you provide your debit or credit card at a PoS or merchant outlet, make sure they swipe the card in front of you. Fraudsters often carry the card outside the victim’s vicinity and clone the card details. Likewise, when shopping using your card, choose retailers using chip-enabled card readers. This significantly helps in bringing down fraudulent activities.

What to Do in the Aftermath of a Payment Card Fraud?

Panic is something that one should completely avoid in the aftermath of debit/credit card frauds. Above all, make sure that you keep your bank’s customer care number handy at all times. Here are the steps that you should take if you are a victim of a payment card fraud.

Follow These Steps

1. On realizing the fraud, call your bank immediately and report the loss.

2. Request the bank to block the credit or debit card immediately.

3. Follow up the call with a formal letter or email. We also recommend that you file an FIR at the earliest.

4. Gather all relevant documents pertaining to the debit or credit card fraud such as bank statements, email/SMS, complaint number etc.

5. File a complaint with the nearest cybercrime cell. One of our previous blogs will give you the contact details of the cybercrime cells across India. Consult a cyber lawyer to guide you through the process in case you find it too taxing.

6. Approach the nodal officer if the bank does not respond to your follow up mail within a week.

7. Approach the internal banking ombudsman and the consumer court if still not satisfied with the bank’s response.

Incognito Forensic Foundation (IFF Lab) – Investigation of Frauds and Cybercrimes

Incognito Forensic Foundation (IFF Lab) is a private forensic laboratory in Bangalore with specialization in cyber and digital forensics. Its state-of-the-art lab houses the latest cyber and digital forensics tools and software. This, along with a team of forensics professionals from premier institutes of the nation has made IFF Lab a trailblazer in the digital forensics domain.