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What is CIBIL (Credit Bureau) and why is it so important today?

Most customers in India, who have Credit Cards and Personal Loans are unaware of the existence of CIBIL (Credit Information Bureau (India) L...

Thursday, July 9, 2009

How to use Verified by VISA and Master Secure Code to prevent Credit Card Fraud (Combating Credit Card Fraud: Part 4 of 4)

This is a good Technological innovation which VISA and Master Card have come up with to combat Internet Fraud. Some banks have enrolled for this service.

Whenever a customer of these banks does an Internet Transactions, the customer needs to input his Card Number, Expiry Date and CVV, and then in addition to that he needs to enter an additional parameter which is known only to the customer (and is not present on the Credit Card) such as Internet Banking Password (Citibank) or Date of Birth (HDFC / ICICI).

Hence somebody who has seen your card will not be able to do an Internet Transaction, unless he knows these details as well, so to a great extent the banks are successful in curbing Internet Fraud. It is advisable that you call up your Bank and get registered for this facility as soon as possible and use it in the future.

For any details or clarifications on Combating Credit Card Fraud, you can contact me on Ask.Pranav@Gmail.Com

What if I am a victim of Credit Card Fraud? (Combating Credit Card Fraud: Part 3 of 4)

God forbid, if you have identified suspicious transactions on your credit card, then you need to take the following immediate steps.

Step 1: Contact the Call Centre and get your Credit Card Blocked immediately
Step 2: Make a List of all the Transactions you have not done with the Amounts and the Description which appears on your Statement. Ask the executive if it was an Internet transaction (Card Not Present) or a Physical Swipe (Card Present)

If it was a physical swipe which means someone has got hold of your physical card, then assume your money is not coming back. You need to follow the next steps in addition you need to start praying to GOD.

Step 3: Ask the Call Centre Executive where in the website is the “Transaction Dispute Form” displayed. Download this for, fill with the necessary details pertaining to fraudulent transactions and amounts and send to the Banks PO Box. Also scan and mail to the Banks Customer Service ID. It is better to write a covering letter to the bank asking for a charge-slip retrieval if these are physical card swipes. Try to find some contact somebody in the bank who can help you fast track the investigation.

Ask the Call Centre when you can contact them next for an update and keep the details of your calls / mails.

Step 4: If the Transaction was an Internet Transactions which was done without the Card being physically swiped request for a Temprory Credit (which is given for a period of 45 days) and initiate a Chargeback process. This is a process where the Bank does an investigation with the vendor and reverts back to you with a decision within 45 days. For disputes on Internet Transactions there is a good chance of being ruled in the customers favour. Keep following up with the bank regularly. For physical swipes where the Card has been stolen, the customer is at the mercy of the fraud investigations done by the Bank.

Step 5: If you have received a Temprory Credit, you do not need to make a payment for those transactions. Else please make your minimum payment due to avoid being reported to CIBIL

Step 6: In case of p0hysical swipes, you will need to accept whatever the bank rules, in the case of Internet Transactions, you can write to the Nodal Officer of the Bank or the Banking Ombudsman and escalate the complaint further if you get a satisfactory resolution. There are certain Internet Chargeback Norms defined by VISA / Mastercard Norms, you can contact me on Ask.Pranav@Gmail.com and I can help you basis how the case is progressing.

Saturday, July 4, 2009

Prevention is better than Cure (Combating Credit Card Fraud: Part 2 of 4)

If you are a proud owner of a Credit Card, there is a certain responsibility on you to ensure that you use the Credit Card securely. I have mapped some precautionary steps which can be taken for the 4 scenarios mentioned above.

Scenario 1: Card Details Compromised at Petrol Pump or Restaurant or similar vendor outlet

As soon as you receive your Credit Card, scratch out the CVV number on the reverse of the Credit Card and commit it to memory or store it on your Mobile Phone. The objective is that nobody should get hold of the Card Number and the CVV number together. Scratch it out real nice so that it is no longer visible (use a swiss knife, rather than using a pen or Pencil as the CVV number cannot be easily scratched out)

Scenario 2: Lost your Card and did not realize it, someone else took the physical card and swiped it

Always be aware that, if you are an irresponsible user of Credit Cards, you can lose money upto the Credit Limit of your Credit Card. If my Card with a Credit Limit of Rs.300,000 gets lost, I risk losing upto Rs.300,000

So if your monthly Credit Card Bill is Rs.25,000, have a Credit Card with a limit of Rs.30,000, or have 2 Credit Cards each with a Credit Limit of Rs.30,000 and keep the other one at home in a lock and safe to be used if you require additional limits. A high Credit Limit is like a Damocles Sword hanging over your head

There is a card protection insurance which is offered by some banks / credit card issuing companies, where if your card is stolen and used, the insurance company pays for the losses. The premium is usually less than 1% of your Credit Limit every month. If you have a Credit Limit of more than Rs.50,000 please sign up for this and pay that Rs.300 every month and then you do not need to worry about losing your card

But before signing up for this product, do check the details as all banks sell insurance and you need to be aware that the risk is covered. These days call centre executives who sell these products have no clue about what they are selling, so be careful. Feel free to write to me for clarifications on Ask.Pranav@Gmail.Com for clarifications if you need any

Scenario 3: Disclosing CVV Numbers on the Phone

I can only ask you not to do this. I am also planning to write to Yatra and see what they say about asking for CVV numbers on the phone. Will write a separate blog post on that. However I intend to run a campaign to highlight such merchants and write to VISA if possible

Scenario 4: Credit Card Details Compromised outside the country
Every time you travel abroad, it is advisable to get a PIN based Prepaid Debit Card rather than use a Credit Card. If you have to use a Credit Cards, then it is advisable to block the old card and get a new one issued on your return to prevent possible fraud. However these are rare occurrences and you can only blame your luck if you are trapped in a scenario like this. However, if you are travelling to some South East Asian countries, it is advisable to reissue your Credit Card on your return.

Behaviours Leading to Credit Card Fraud (Combating Credit Card Fraud: Part 1 of 4)

Majority of Credit Card Transaction Frauds in India happen due to one of the four scenarios mentioned below

(1) Careless with your Credit Card at the Petrol Pump or Restaurant ….. someone noted down your 16 digit Credit Card Number, Credit Card Expiry Date and 3 digit CVV Number appearing on the reverse of your Card. This data is enough for an Internet Transaction
(2) You have lost your Card. Your wallet got flicked or you missed taking it back from the waiter at the restaurant. In some cases I have seen people leave it in the ATM itself after withdrawing cash
(3) You frequently book tickets at call centers like www.yatra.com or similar vendors who ask for your CVV numbers over the phone (I beg you to bear in mind that … the CVV number is not to be shared with anyone and you are better off scratching it off from the reverse of your Credit Card and writing it down somewhere else or storing it in your Mobile Phone against some unsuspicious name. I do that J
(4) You traveled abroad (especially countries like Malaysia or Thailand), visited night clubs or some shady joints where your Credit Card Magnetic Strip details were intercepted and the well networked fraudsters generated a duplicate card and used the same

If you are experiencing Scenario (2) do note that you are a forgetful person and please ensure that you do not use Credit Cards the rest of your life ….. or a more practical suggestion would be to reduce the Credit Card Limit to an amount which you can afford to lose. If you set your Credit Card limit to Rs.20,000 you can lose a maximum of Rs.20,000 if you lose your Card
If you are experiencing Scenario (3), please be aware and make everyone around you aware that the 3 digit CVV number is not to be shared with anyone. You may punch it on the phone to authenticate the transaction, but please do not voice it out. You are digging your own grave by doing so.

I cannot blame you if you faced Scenario (1) and Scenario (4). But there are ways in which you can prevent the same. Do read on in the next article of this series.

Grappling with Credit Card Fraud?

Majority of the mails I receive on Ask.Pranav@Gmail.Com pertain to customers cribbing about Credit Card Frauds. This seems to be the most common problems Credit Card customers face, so I am doing a detailed, easy to understand write-up on this topic.

Having worked in 3 different banks, I feel pained at the hysteria with which customers call the Call Centre for erroneous transactions on their Credit Cards which they have not done, and the call centre executives are as clueless about how these customers can be helped (they do not have adequate training and are usually unaware of the complex chargeback processes defines by VISA / Mastercard), hence I dedicate this series of articles on combating Credit Card fraud to all those people who lose sleep over transactions on their credit card which they did not do.

For those who have not been through this situation, please realize that you may experience this anytime, even as you read this article, so please take the necessary precautions mentioned below. Feel free to forward this content to every Credit Card User you know, as I am sure it will be of help.