India boasts a staggering number of approximately 77 million active credit cards, surpassing the entire population of the UK. This impressive figure is after the Reserve Bank of India’s directive to banks to terminate inactive credit cards.
Over the past few years, especially after the pandemic, there has been a notable surge in credit card issuances, especially among the urban population. Moreover, the credit card industry in India has undergone a significant transformation, introducing streamlined and online credit card application processes. This shift has led to the availability of diverse credit card options tailored to cater to specific needs.
Credit cards have transformed the way we handle transactions, offering convenience and flexibility. However, as the credit card usage surges, the risk of credit card fraud also increases. As per reports by The National Crime Records Bureau (NCRB) fraudulent transactions using credit and debit cards continued to rise for the second consecutive year in 2021. A total of 3,432 fraud cases were filed, indicating an approximate 20% rise compared to the previous year. This surge follows a significant surge of over 70% in such frauds during 2020.
In this blog, we will examine the top credit card frauds in India, so that you can stay vigilant and safeguard yourself against potential financial losses.
1) Identity Theft
Identity theft occurs when criminals unlawfully acquire personal information, such as your name, address, and credit card details, to assume your identity and conduct unauthorised transactions.
Fraudsters gain access to an individual’s personal information, including their name, address, and credit card details, through a phishing email that appears to be from a trusted bank. They then use this information to make unauthorized transactions on the victim’s credit card.
Prevent identity theft by only sharing personal information with trusted sources and regularly monitoring your credit card statements for any suspicious activity.
2) Skimming
Skimming involves the illicit copying of your credit card information using a skimming device. Fraudsters typically place these devices on ATMs or card payment machines, enabling them to capture your card details and PIN when you use these compromised devices.
Criminals install a skimming device on an ATM in a busy area. When unsuspecting customers insert their credit cards to withdraw money, the skimming device captures their card information and PIN. The fraudsters later use this stolen data to make fraudulent transactions.
This can also occur through other devices like a data copying device disguised as a charging cable in a busy public area. Once someone uses the device to charge their phone, all their data gets copied and criminals can extract any financial data they want to make fraudulent transactions.
Protect yourself from skimming by remaining cautious of any suspicious attachments or devices on ATMs or payment terminals or any public place. Shield your hand when entering your PIN and diligently review your bank statements for unauthorized transactions.
3) Phishing Scams
Phishing scams entail fraudulent attempts to acquire sensitive information, including credit card numbers and passwords, by impersonating trustworthy entities through emails, text messages, or phone calls. These messages often exploit urgency or offer enticing rewards to deceive individuals into sharing their information.
Fraudsters send text messages to individuals claiming to be their credit card provider. The messages state that the individual’s credit card needs to be updated urgently, and a link is provided for them to provide their credit card details. Unsuspecting victims click on the link and unknowingly share their sensitive information with the scammers.
Defend against phishing scams by refraining from clicking on suspicious links, avoiding sharing personal information through unsecured channels, and verifying the authenticity of communications from your bank or credit card provider.
4) Card Not Present (CNP) Fraud
CNP fraud arises when unauthorized transactions are conducted using your credit card details without physical possession of the card. This can occur during online purchases, mail-order transactions, or phone orders.
An individual purchases a product from an online marketplace using their credit card. However, the seller turns out to be fraudulent, and the product is never delivered. The individual’s credit card information is misused by the seller for unauthorized transactions, resulting in financial losses.
Mitigate the risk of CNP fraud by utilizing secure and reputable websites for online shopping, frequently reviewing your transaction history, and promptly informing your bank if you detect any unauthorized charges.
5) Lost or Stolen Card Fraud
One of the most prevalent forms of credit card fraud is when your card is lost or stolen, and unauthorised individuals exploit it for purchases. It is crucial to immediately report any loss or theft of your credit card to your bank to prevent fraudulent activity. Regularly monitor your credit card statements and establish alerts for any suspicious transactions.
Conclusion
With the growing usage of credit cards, protecting ourselves from credit card fraud becomes paramount. By familiarizing yourself with the top credit card frauds in India and adopting preventive measures such as consistent transaction monitoring, safeguarding personal information, and promptly reporting suspicious activity to your bank, you can shield yourself from falling victim to these fraudulent practices. Stay vigilant, prioritize security, and enjoy the benefits of responsible credit card usage.
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