Credit card fraud – Types, examples and preventions you must know
While India is gradually embracing the cashless mode of transaction and plastic money, the number of credit and debit card fraud is also escalating simultaneously, at a rather alarming pace. According to a recent report published by the Finance Ministry, within the last three months of 2019, Rs.129 crore has been lost due to such fraudulent activities.
This number is an eye-opener for many cardholders who primarily rely on the digital mode of transaction. While credit card fraud is more common, debit card frauds are also on the rise. In such a turmoil situation, it has become imperative for cardholders to take precautionary measures to keep their funds safe.
Here’s a brief account of different types of credit card frauds-
What are the different types of credit card fraud?
Following are some of the most common types of credit card frauds that users have fallen prey to.
In this method, online fraudsters trick cardholders into installing malicious software that they send via email or other electronic medium. Consequently, whenever, a user makes any online transaction, their PIN and other transaction details reach the third-party. Later, using that information, they withdraw funds from the victim’s account.
Another popular mode of credit card fraud in India is phishing that involves sending emails to the users, impersonating financial institutions. Unknowingly, the victims reveal their PIN and OTP to the criminals and may thus suffer from considerable losses.
It is one of the examples of credit card frauds that criminals adopt to collect card data. Such scams generally occur at any merchant or POS terminals. While you swipe your card to make a payment, all your card details are recorded that they later use to make an unauthorised withdrawal from your account.
In this method, fraudsters use small data skimming devices that virtually reads and copies card details.
In this method, the fraudsters send malicious emails to the cardholders stating they have won attractive deals or prizes, generally under the guise of any reputed e-commerce sites. When the user clicks on the link provided by them to claim the prize amount, the victims are redirected to a fake website that reads and copies all the card details.
How to prevent credit card fraud?
As such fraudulent activities related to cards increase; it has become essential for cardholders to take proper precautions to safeguard their money. For instance, they can avail Wallet Care offered by Bajaj Finserv that falls under the category of Pocket Insurance & Subscriptions. It provides sufficient financial coverage against such credit card frauds. Moreover, the insurer also reimburses the amount that an insured beneficiary loses due to unauthorised transactions.
Following are some of the benefits that such insurance policies offer.
Quick card blocking facility
Availing a card protection cover, you can block all your cards immediately with a single call to your insurer. If you ever find out that something is not wrong and your card has been misused, you can reach out the insurer, and they will block your card at once. Such service is available 24/7, so you can contact them whenever the need arises.
However, to ensure additional security of your card, you can also avail a fraudulent charges cover that keeps your finances protected against any unauthorised charges made upon your payment cards.
High financial coverage
A credit card fraud is sufficient to drain your entire savings at one go. However, owning a credit card fraud prevention plan, you can claim an amount of up to Rs.2 lakh against the insured card. Moreover, such insurance policy also comes with a nominal premium that you can afford without pinching your monthly budget.
Along with that, such frauds can also happen during ATM withdrawals. In such a scenario, ATM safeguard insurance policy can save your day.
Therefore, no matter whichever card you use, it is imperative to opt for a credit card insurance cover to ensure minimal financial loss after a credit card fraud. It is equally true in the case of debit cards as well. Nonetheless, along with that, try to follow some precautions while you initiate an online payment, like refraining from sharing any OTP, CVV, etc. with an unknown person.