How Credit Card Fraud Happens

Oct 10, 2023

With the rising banking and credit penetration, you might already have a Credit Card or plan to get one. Either way, you need to know the scams related to it and the measures you can take to stop them.

A Credit Card fraud or scam refers to the unauthorised use of someone’s Credit Card. It involves scammers using the victim’s Credit Card hacked for their interest. Over time, such incidents have increased, despite government measures to curb them. Hence you, as an individual, are equally responsible for saving your hard-earned money from scammers.

This article will help you understand some of the standard modes scammers adopt and what you can do to save yourself.

How are Credit Card Frauds Conducted?

There are a variety of ways in which scammers indulge in such practices. Most methods involve obtaining your card’s sensitive information and its usage without your consent. Below are some common ways in which such scams take place -

Customer support - If you ever receive a call claiming that your bank has blocked your card or anything similar, then handle it cautiously. Scammers know that individuals might share their card details to ‘verify’ and prevent them from getting blocked.
Once you share your card details with them, scammers will begin withdrawing money from your Credit Card.
Point of Sale (PoS) machine - It is likely that you might have already used PoS machines while paying for goods and services. These are small machines used by vendors/ businesses to charge the amount asked against your card. Usually, the transaction only occurs once you have provided the PoS machine with your pin/ password.
With the rise in digital payments, PoS transactions have also increased. Scammers can install a skimming device on a PoS machine to collect all the data about your card. Somebody can then use this data to create a duplicate card and make unauthorized transactions.
Identity theft - Scammers might use your documents to apply for a new Credit Card or make changes to your existing one. If the fraudsters get hold of your identity documents, like your Aadhar card, that contains your sensitive information, they might use it against you by impersonating you.
Cloning - Since individuals use their cards both digitally and physically, the risk of fraud associated with them also exists. Scammers use electronic devices on top of genuine ATMs or other card-accepting machines. These machines then digitally collect all the sensitive information present on your card.
The fraudsters create a duplicate card with the information stolen from the card’s magnetic stripe. The scammers use the cloned card, and the victim is the one who receives the bills for such transactions.
Phishing - Refers to falsely impersonating a reputed organization or individual. Scammers use communication channels like E-mails, SMS or calls to contact the victim and pose as someone else.
Typically such communication impersonates a bank or someone else, providing an exciting offer to the victim. On the pretext of such schemes, the scammers ask the victim to provide their card-related sensitive information to ‘verify’ their profile. Once the information is shared, the scammers use it in their favor by making unauthorized transactions against the victim’s Credit Card.
Data leaks - Hackers often target large databases owned and managed by different organizations and financial institutions. At times, the attackers successfully gain unauthorized access to the database, resulting in a larger-scale breach.

Tips to save yourself from Credit Card frauds

You can prevent Credit Card related fraud if you are vigilant enough. Even though scammers have multiple unique ways of conducting fraud, almost all can fail if the targeted victim is prudent and alert. Below are some of the standard and easy tips you can implement to safeguard your interests against these fraudulent activities -

Skeptical - If you ever receive any communication claiming to be your bank with an urgent task, you should handle it cautiously. Before continuing the conversation, make an effort to verify its authenticity. For example - Ask the representative to send an email via the official bank’s domain along with their employee ID.
No matter what, a bank can never ask you for your PIN, password or OTP. If someone requests you for such details, then treat that communication as fraudulent. Such skepticism is also helpful if you receive any too-good-to-be-true offers from any business.
Account management - You should always use a strong password for your banking needs. Regularly tracking your account statement or transactions is an excellent way to check against unauthorized transactions. If you ever spot any unknown transaction, let your bank know if it immediately.
You can also set transaction limits with your bank. Such limitations will help you control the extent of loss if you ever become a victim of any fraud.
Awareness - You need to be mindful of all the new modes of scams and their prevention tips. Since the methods are ever-evolving, keeping yourself updated with them is a must. You can use HDFC Bank Vigil Aunty for this, who provides you with the latest information and steps on what you can do if you ever become a victim.
Card machines - Before you use any card-related machine for a physical transaction. You should always check for any signs of tampering. If the device has been tampered with, bring the matter to the authorities immediately and do not conduct any transaction.

By following the above tips you can always stay safe. If you are planning to get a new Credit Card, then HDFC Bank Credit Card might be the best choice for you! It is available in different varieties with exciting offers to make your payments a rewarding experience.

Join Vigil Army, where Vigil Aunty will decode various frauds and give people a heads-up on the dos and don’ts of combating frauds online. To join the Vigil Army, send ‘Hi’ to her via WhatsApp number: 7290030000

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