A credit card allows customers to borrow funds from a pre-approved limit to pay for purchases. While it offers several benefits, customers need to be extremely careful when using it. This is because several cases of credit card fraud have come to light where non-suspecting individuals have been attacked and sensitive information stolen.
It has been found that fraudsters use that latest technology and keep coming up with new methods to scam people everyday.
Here are some of the common credit card frauds and ways to avoid them:
Phishing is a popular internet fraud that aims to steal personal information. The fraudster sends email impersonating a bank or financial institution to get sensitive information like credit card or bank details.
How to avoid
According to Pranjal Kamra, CEO at Finology, a user's email account usually filters and alerts a user of a suspected email. “It’s advisable to stay away from these emails. If the email claims some suspicious activity in the account or card and asks to share some details, confirm this from the bank or credit card company to ensure whether the problem is real or not,” he suggests.
Instead of using emails or fake websites, fraudsters are now actively voice phishing or "vishing" customers.
Here, vishers impersonate banks or financial institutions to trick customers into revealing their passwords or PINs. They do this through social engineering over the telephone system to gain access to personal, financial information and use an internet telephone service (VoIP) to trap users.
How to avoid
Omkar Shirhatti, Co-Founder and CEO at Karza Technologies asks users to never disclose the private and confidential information to an unknown source.
"Always, verify the source. If a message is sent, google it. This can help in checking if someone else has already reported a fraud with the email or website," he says.
The fraud is undertaken through malware software. These software have spyware technology that secretly monitor and capture keystrokes. With this information, fraudsters trace the username and password or PIN to carry out fraudulent transactions.
How to avoid
Use antivirus software on your computer and smartphone to secure them from malware. Also, avoid installing apps or programs from unauthenticated sources, advises Kamra.
A fraudster uses data skimming devices to steal credit card information when the card is swiped in an ATM, store or POS. These stolen data are used for making fraudulent transactions with a counterfeit credit card.
How to avoid
Kamra asks customers to take a look at the ATM or POS device before making any transaction.
"In case of unusual differences in keypad or card reader, avoid transacting through such devices. Additionally, users can opt for 2 levels of authentication for card transactions," he adds.
Here are some additional measures users should take to avoid being conned:
According to Anil Pinapala, CEO and Founder of Vivifi, consumer education at the grass roots level is the lever to steer clear of such problems.
"Additionally, customers should understand what can be shared and what cannot," he mentions.
Nityanand Sharma, CEO and Founder, Simpl advises customers to be wary of emails or text messages informing about the credit score taking a plunge, or messages requesting to click on the link provided to check the score. On noticing anything suspicious, he asks customers to contact the card issuer to dispute the transaction as soon as possible.
Sumeet Srivastava, Founder and CEO, Spocto Solutions , meanwhile, suggests customers to use secure internet or mobile connectivity for online transactions.
“Don’t get tempted to use free Wi-Fi offered at public places,” he warns.
Also, he asks users to cut the credit cards into tiny pieces while disposing it in order to avoid any misuse.
It's also advisable, as per Shirhatti to closely monitor account activities and review credit card billing statements each month to be alert for suspicious transaction messages.
"In case of any suspicious activity, immediately change online passwords and PINs to prevent fraudsters from doing any damage," he adds.
First Published: IST