How to Report and Protect Yourself Against Credit and Debit Card Scams22 Apr
You would normally feel pretty safe using your credit or debit card for goods or services in the normal course of life. Unfortunately many people have been victimized for no fault of their own.
Are you aware that the credit or debit cards in your wallet could easily be cloned wherever and whenever you use them? This would be done without your knowledge and you would not even be aware of it unless your bank calls you or you receive your monthly statement or your card is declined due to lack of funds!
The ease of card usage
In the good old days cash was king, though you could be robbed of cash. But now that plastic is accepted everywhere, many people don’t even carry cash or carry very little cash with them. Credit and debit cards are accepted everywhere, at restaurants, stores, supermarkets, to buy fuel, even at theaters, cinema halls, hotels, and for online shopping and you can use your card wherever in the world you may be, so you don’t even have to carry foreign exchange. While you do run the risk of getting into credit card debt or have your card maxed out), with the debit card money is directly debited from your bank account.
How cards are cloned
In some places cards are swiped in front of you at the cashier’s counter for instance. At other places like at gas stations or restaurants, you give your card, it is swiped somewhere else and you get it back. So it is not within your sight all the time. How do the criminals clone the cards?
This is done in collusion with staff at the place you are shopping. The card is swiped through a small machine which ‘steals’ all the card holders details. These details are then transferred to another ‘blank’ card via a read-write machine which is easily available. This counterfeit card can then be used just like the original.
Other methods of stealing data from your cards
If you buy stuff from a not so kosher site, your credit card details can be stolen. If you reply to emails asking for credit card information, this too can be misused. At times even call center or back office employees of the concerned bank have stolen customers’ data and misused them via credit cards or transferring funds to another account.
The extent of the fraud
In 2007, thousands of motorists in the U.K. lost millions of pounds thanks to credit card skimming and cloning, says, BBC. In India, in 2008, ICICI Bank lost more than Rs. 11 crores ($ 2.17 million), American Express lost Rs. 6 crores ($ 1.18 million) HSBC lost Rs. 4.9 crores ($ 0.971 million) and Citibank lost Rs. 4.73 crores ($0.97 million) according to DNA newspaper. Experts say the credit card industry loses about $2 billion a year globally due to fraud.
How do you protect yourself
In some countries you can get insurance for your credit cards at a reasonable price and if you are an inveterate credit card user, you should invest in it. Some cards also give insurance to your card and repay you for fraudulent transactions as long as it is proved that you were not at fault.
Try not to let the card out of your sight. Another thing you can do is tell the card company to put a ceiling on transactions on a per day basis or a general ceiling depending on your expenditure pattern and that ceiling should not be lifted unless they get a call from you. Usually, but not always, banks may be cooperative and reverse the charges, but you may well have to fight for your rights.
Reporting Card Fraud
Australia - In Australia you can report a scam by phoning the ACCC Infocentre on 1300 302 502. The Infocentre is staffed between the hours of 8.30 am and 6 pm. Or report a scam to the ACCC.
U.S. – In the US, credit card fraud exceeding $2000 can be reported to the Federal Trade Commission (FTC) and to local and regional authorities, depending on the amount and type of fraud. For smaller amounts the bank is the best bet.
U.K. – In the U.K. frauds in London can be reported to City of London Police Economic Crime Unit. Telephone: 020 7601 6999. Fax: 020 7601 2345. Email: frauddesk@city-of-london.pnn.police.uk or ACPO Fraud Prevention.
http://news.bbc.co.uk/2/hi/uk_news/1097797.stm
http://news.bbc.co.uk/2/hi/uk_news/6578595.stm
http://www.consumerfraudreporting.org/UK_reporting_scams.php
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