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Types of Frauds in Credit Cards

IamCheated.com Research Team | November 02, 2018  5:04:pm

Credit card holders in India are rising each day. As per the report, India had 36.2 million credit cards in January 2018. Between January 2017 and January 2018, India added nearly 7.39 million credit cards. The reason why credit card holders in India are increasing is because credit cards are easy money. As the number of people using credit cards increases, frauds associated with it, also rise.  According to the 2016 Global Consumer Fraud Report, India was ranked among the top 5 countries with respect to credit card fraud, with more than 33% of the people saying they had been scammed. Fraudsters use different methods to cheat innocent people and steal their hard earned money. In this blog, we will discuss different types of credit card frauds.

Types of frauds in credit cards

1. Card Skimming

Card skimming is the most common credit card fraud and there are many cases of card skimming in India. In case of card skimming, a small electronic device called a skimmer is used to steal card information. This fraud takes place when you swipe your credit card in an electronic device like POS (Point of Sale). When you insert the card into a POS machine, the skimmer stores important information from your credit card. Fraudsters copy this data onto a blank card and use it to withdraw cash and make purchases.

To avoid card fraud, make sure the card is swiped in your presence and do not let the shop assistant take the card away from you.

2. Stealing the card

In this type of credit card fraud, fraudsters steal the credit card from your pocket or purse and use it to conduct unauthorized transactions. In case of stolen credit cards, it is difficult for fraudsters to swipe your card at POS machines, as it requires a PIN number. So, they use it to make online purchases through various tricks. It is advisable to block your credit card as soon as you lose it. Make sure to keep your credit card safely, so that it’s not stolen.

3. Phishing emails

Another trick used to steal credit card information is a phishing email. Phishing scams are rising each day as people using emails increase. Under this fraud, fraudsters send emails which look exactly like those of a genuine company. This is mainly done to collect personal information and credit card details. Many people think these emails are sent by genuine companies and provide credit card details. When credit card details are given by the cardholders, it is easy for fraudsters to steal the money.  So, make sure not to entertain such emails and do not give your credit card information to anyone.

4. Fraud calls and SMS

Fraud calls or messages are another technique used by fraudsters to steal your credit card details. Fraudsters call customers claiming to be bank officials and try to collect personal information. They say that your credit card will expire and it has to be renewed to prevent it getting blocked. They also promise help in renewing the credit card and you will be asked to provide credit card details and the OTP.

One thing you should always keep in mind is that bank officials will never ask you to give personal information over the phone. In case you receive such calls, report them to the police.

5. Application Fraud

Under application frauds, fraudsters steal your data and use it to open a credit card account in your name. Once the account is opened, they will receive the card and make purchases using it. In the end, the burden of the paying credit card bill will fall on your head.

Examples of credit card frauds

SBI credit card fraud

Fraudsters had once cheated more than 2,000 SBI Credit Cardholders to the tune of over Rs 5 Crores, in the name of gifts. Victims received calls from unknown persons who introduced themselves as employees of SBI Credit Card Division and collected their credit card details. After collecting the card details and OTP, fraudsters carried out monetary transactions through online portals.

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