How to protect yourself from credit card frauds?

I received a call recently from a close friend of mine in a hurried voice saying that someone had purchased a jewelry from a famous jewelers in Bangalore for Rs.1,15,000 using his credit card. That too, when he is having his card safely in his purse. I consoled him and asked him to talk to the bank immediately. Even though he was not charged by the bank after they confirmed that the purchase was not done by him, the mental torture he undergone was unbearable.

How can we protect our credit cards from such frauds?

Is there really a way to escape from credit card cyber attacks?

Will RBI and banks do something to stop it?

Yes, RBI has implemented key measures to enhance better security on credit and debit cards.

• Banks must issue international credit and debit cards that are EMV (Europay, Mastercard and Visa) chip-based with a pin enabled

• Magnetic strips are no more issued in the new cards. The active cards with magnetic strip will have a newly set daily limitations

• The terminals used by the traders and the infrastructure must have payment-data security standard certificates

• If any suspicious purchases are witnessed, easy to use and quick modes are implemented

- for customers to block the card
- for banks to check with the customer if they witness any

Ok, Banks are taking actions. Does it mean that I am 100% safe from credit card crimes?

Unfortunately, the answer is no. You are not 100% protected just by banks implementing safety measures in their systems.

It is like locking your home safely when you go out. Will you keep the house doors open while going out just because you have police patrolling the area? No, right. Likewise, you must take responsibility to protect yourself from such crimes. You must take precautionary measures while using ATM cum debit cards and credit cards online and offline.

Minimize the chances of being a victim of ATM cum debit card card theft. What should you do while using your cards in ATM machines?

• Always scan the area before entering the ATM room. If there is only one machine, do not allow anyone to enter in while making a transaction. You can politely tell them to come in after you are done. If you suspect any threat, come out quickly and get into a safer place where there are people around you.

• In case of two or more ATM machines in the same room, always cover the area with your hands while entering pin number and do not allow others to view the same.

• Do not use ATM machines that are located in dark or isolated area. Always use the machine which is associated with a bank or where a security guard is present.

• Check with your banks and register for SMS alert whenever the card is being used. You will be notified on each transaction. In case of anyone else using your card, you will be notified immediately.

• Keep the transaction receipts safely until verifying the same with your bank statements

Carelessly used pin numbers are the reasons people become a victim of debit card crimes. What can be done to protect the pin?

• Change the pin numbers as frequently as possible

• Do not write pin numbers anywhere, definitely not on the card

• Do not keep the card and the pin number you received from the bank in the same valet or bag

• Do not keep the easily recognized numbers like your birthday, marriage day as your pin

• Always use strong passwords as advised by the banks

How to protect your credit and debit cards while using in retail outlets, shops, restaurants or petrol pumps?

Most of the times the employees in the restaurants or petrol pumps join hands with the group to commit such cyber crimes. They swipe your card in the skimming machines where the details are recorded to make duplicate cards.

• Present yourself while the employees in the retail outlets swipe your card for billing. Check your card after swiping in the retail outlets. If you feel any changes like glue, damaged part while touching or if you are not able to insert it in ATM machines, inform your bank immediately and block the card from using.

• Try to swipe the card by yourself while trading in shops. Cover CVV number with your hands so that the person at the receiving end cannot view it or hide the cvv number with a marker before using it.

• Always check for the correct amount in the receipt before signing it. If you see a blank space between net and total amount, cross the space before signing.

How to protect your credit and debit cards while using online?

Online purchases also lead to credit card thefts.

• Always use the secured website where the url starts with https://. Check for ‘s’ and do not use the sites that have just http://.

• Always use the virtual keyboard to enter the info. Banks also offer virtual credit card. Opt for virtual credit cards and avoid being a victim.

• Keep track of all online transactions and cross check with bank statements.

If you are changing the address, inform your bank immediately, so that any communication from the bank does not reach wrong hands. Never use your credit or debit card with or without your photo as your id proof. Be it through emails or in person, do not give your bank details, credit card numbers along with passwords to anyone even they identify themselves as bank employee.

Precaution is better than cure. The above discussed precautions will save you from credit card frauds if practiced.

K. Ramalingam is the chief financial planner at Holistic Investment Planners, a leading financial planning and wealth management company.