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Over the past few years, the use of plastic cards- debit and credit cards has been increasing. There has been a drive for digitization and efforts to move away from paper money. It is more convenient to carry cards than carry large amounts of cash. With the increased use of cards there has been an increase in fraud and the fraudsters have resorted to many techniques like phishing, SIM swapping, and skimming and it is not too difficult to steal money from people using debit cards if they are not careful. Card fraud can be reduced by consumer education when people become aware of the ways the fraud can take place.
The ways in which a person can fall victim to fraud are-
- Skimming–
Skimming is a type of credit card theft where the thief makes use of a device called a skimmer and when the card is swiped all the details stored on the magnetic strip of the card will be stolen by the skimmer. The thief can then set up a duplicate account and may even take a loan in your name.
- Phishing-
Phishing scams can be done both by phone as well as by email. The cardholder receives an email from a bank or a financial organization familiar to them and on clicking a link attached to the mail they will be taken to a bogus site where they will be asked for personal information. People should be aware of this type of fraud, stay vigilant and not click on emails with links that look suspicious.
- Sim Swapping-
Sim swapping occurs when a person pretending as a cardholder contacts the mobile carrier and informs them that the original card was lost or destroyed and wants a new card to be activated for the account. The mobile carrier will request identity verification and the criminal gets the phone number reassigned to their SIM. They can now access your accounts, email, social media, and digital payment systems.
- Lost or stolen cards.
- Calls often received for fake prizes.
How can you protect yourself from card fraud?
- When you are making withdrawals at an ATM be aware of the surroundings. If you notice something unusual like a skimming device it is better to refrain from making transactions.
- It is better to use a credit card than a debit card for making online purchases as it has enhanced security features. If your money is stolen the bank will take measures to retrieve it.
- Get banking alerts. You must always sign up for banking alerts. Banking alerts are notifications about the transactional activities in your bank account and these are accomplished through SMS. Banking alerts help you to receive timely updates on your account activities and will thus make you aware of any fraudulent activity.
- If possible try to have paperless bank statements as this will do away with the possibility of having your bank account details stolen from the mailbox. Shredding the debit card and credit card receipts will reduce the possibility of account information being stolen as they have the full credit card number.
- It is always better to destroy the old debit and credit cards as this will prevent the leak of information.
- When you are entering a PIN at any POS (point of sale) site never let the other person take the card away from your sight or view for swiping and making a transaction. Try to cover the keypad with your hand while entering the pin.
- Try to keep the credit card safe where it is not accessible to others. Sign on the back of the new card as soon as you receive it and keep it in a wallet from where it would be difficult for pickpockets to steal.
- Memorize the pin of the credit card and change it frequently to avoid any misuse. Never ever provide sensitive credit card information to other persons on the phone who try to trick you through rewards or business schemes.
- Review the credit card billing statement every month. See for any unauthorized charges as these may be signs of fraud and in case of any unauthorized transaction get the card blocked.
- Avoid storing the card details on your laptop or mobile.
- When making a transaction at an ATM, cover the number pad with your hand so as to conceal the password when entering into the machine.
This is the age of digital transactions which are more convenient than carrying a wad of cash around. It is up to a person to use and store their credit and debit cards carefully taking care to prevent any breach of information. Taking precautions will go a long way in keeping the money safe in any unfortunate event where the card details are stolen.