The Hindu Business Line : Banks step up vigil against card frauds

Mumbai, March 9 Even as the use of plastic money increases, the number of frauds is also on the rise. Over the past three years, the number of credit card frauds has gone up by 80 per cent.

Recognising this, the Reserve Bank of India and banks are taking steps to educate customers about frauds that may happen via Internet and while using credit cards. Banks are even introducing products with additional safety features.

As new channels of banking open up, the number of fraud cases may increase and there is the need to educate customers about them, said a senior bank official.

According to figures given in response to a question in Parliament on March 4, 2008, the total number of frauds has gone up from 12,374 in 2005 to 21,687 in 2006, and 22,280 in 2007.

In the case of credit card frauds, the number has gone up from 8,789 in 2005 to 17,268 in 2006, and 17,294 in 2007.

One reason for this is credit card transactions are growing much faster than other transactions, said Mr Hemant Kaul, President, Retail Banking, Axis Bank.

Safeguard

Axis Bank recently launched ‘Visa Platinum Credit Card’ based on the EMV (Europay, MasterCard, Visa) standard, with an embedded chip to store the cardholder’s information in encrypted format to provide security against possible misuse in the form of counterfeiting and skimming. When a customer swipes a card with an embedded chip at the point-of-sale terminal, the chip sends a secret message to authenticate every transaction, making it difficult for a fraudster to steal the information.

ICICI Bank takes precautionary steps like sending an SMS to customers on every transaction made on their credit card. “This way, if it is not the customer who is making the transaction, he or she will know immediately,” said Mr V. Vaidyanathan, Executive Director, ICICI Bank.

Security Net

Banks such as ICICI Bank and HDFC Bank, which have a huge base of customers using the Internet, also face frauds such as phising.

In phising a customer gets an e-mail that deceptively claims to be from the bank and asks for account-sensitive information, credit card numbers, passwords and Personal Information Numbers (PIN). It often resembles a notice from the bank and misleads customers.

ICICI Bank regularly issues letters to its customers, warning them to be wary of fraud Web sites and not to disclose personal details over the Internet.

A warning on the Web site of HDFC Bank also cautions customers about fraudulent e-mails that ask for personal details and threaten to restrict the NetBanking access in case customers do not respond.