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As per data shared by the Reserve Bank of India, there were 57.4 million active credit cards in India in April 2020. Though credit cards have increased individuals’ purchasing power, they have also exposed users to substantial risks. 

The most common risks related to this payment card are credit card frauds.

  • In the fiscal year 2020, over 50,000 cases of credit card, debit card and internet banking frauds were recorded.
  • RBI’s data suggest that from April 2009 to September 2019, more than Rs.615.39 crore was lost in debit and credit card frauds.  

Nevertheless, with a little caution, credit cardholders can minimise the risk of online frauds quickly. In this regard, an individual must be first aware of the risks to which they are exposed.

Credit card scams – The process and prevention measure

Essentially, credit card scams occur when fraudsters gain access to payment card details and misuse it to make unauthorised purchases.

These following are among the most common ways in which scammers manage to access credit card details –

  • Skimming 

This scam is carried out with the help of a fake card slot or skimmer. Ideally, such a device is installed at card terminals. When cardholders swipe their payment card at a compromised card machine, the skimmer reads information on the data and stores the collected data. 

Tip to prevent: The best way to avoid this type of credit card fraud is by checking if the card terminal and the keypad is tampered or not. Individuals should also avoid non-bank ATMs as much as possible and sign up for transaction alerts to closely track transactions.

  • Phishing
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Typically, this online scam is conducted through emails that contain unsolicited links, which redirect individuals to a fake domain created solely to steal sensitive details like credit card information and personal information. Scammers may also send malicious links and install malware and spyware on the receivers’ devices to steal vital information. 

Tip to prevent: The year 2020 recorded 194 phishing cases until August. To avoid this online credit card payment fraud, individuals should make it a point to handle emails from an unknown sender with caution. They should refrain from clicking on unsolicited attachments and sharing sensitive personal and payment card-related details online. Having an active Identity Assure policy will help you cover the financial risks related to identity theft.

  • Vishing 

It is carried out through the phone and is recognised as another form of a phishing scam. Scammers usually call from a spoofed number impersonating leading financial institutions, asking for details like CVV number, expiry date, OTP, etc. Recently, there has been a rise in robocall-based vishing scams. 

Tip to prevent: One should be wary of callers who claim that the user’s credit card has been blocked or Aadhaar number has been updated. They should also not share any financial data or OTP with the caller to dodge credit card frauds. Legitimate financial institutions never ask for card details, especially over a phone or SMS. 

  • Online shopping scams

The internet is filled with spoof e-commerce sites that operate to dupe online shoppers. Scammers use fake domains to collect credit card details and/or deceive customers for money by sending items that do not remotely resemble the advertised product. An example of this would be when one orders a phone online, and they end up receiving a piece of brick. 

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Tip to prevent: It is always recommended to shop from authentic shopping portals with a secured connection. Shoppers should refrain from saving their card details on the browser and shop only through websites with secured-connections, displaying a padlock sign. Online shoppers should also install reliable anti-virus and antimalware software on their devices to ensure a safe shopping experience. Some may also consider getting a Cyber Security Cover to help them deal with online scams’ legal and financial obligations.

Other than these, using lost or stolen credit cards is among the most rampant process of carrying out online credit card payment frauds. Thus, when individuals find their credit card has been stolen, they should report to their financial institution at the earliest and get them blocked immediately.

Policyholders of Pocket Insurance & Subscriptions like the Wallet Care policy offered by Bajaj Finserv can get all their lost or misplaced credit and debit cards blocked with a single call. Such a blocking service is available for 24/7 and also extends to SIM card. This card protection plan comes with complementary fraud protection that covers the financial liabilities resulting from phishing, vishing or while making credit card bill payment online.

Besides these ways, credit card users should keep track of their transactions closely to identify unauthorised transactions quicker. They should also be careful when using a public computer and refrain from sharing credit card details when using a public network to lower credit card fraud risks.