HomeALL THE INFORMATION BELOW IS ONLY A COMPILATION FROM INTERNET TO HELP A CREDIT CARD VICTIM AND PROVIDE HIM WITH INFORMATION AND KNOWLEDGE TO EMPOWER HIM OR HER TO PROTECT HIM/HER FROM Credit Card Fraud Credit Card Fraud - A review The phrase, "Credit Card Fraud" was created and used in a biased manner, till date. If an unauthorized person uses a card or a person who used the card fails to repay the amount, it's called 'Credit Card Fraud'. By doing so, Credit Card Operators reinforcing a notion in our minds that, "the Credit Card Operators are always right; only the users are defaulters" But, if we check whether these Credit Card Operators perform their duties in a genuine or lawful manner, the result is very disappointing. These Credit Card Operators (especially foreign and private companies) indulged in arm twisting practices right from marketing to debt collection. The Reserve Bank of India vide its Master Circular on Credit Card Operations of banks (RBI/2006-07/12 DBOD.FSD.BC. 10/24.01.011/ 2006-07), laid clear regulations for the Credit Card Operators and their Direct Marketing/Sales/Collection Agents regarding fair practice during all activities such as marketing and debt collection. According to that circular, all the Credit Card issuing banks/NBFCs' should adhere to those guidelines strictly. But, it is very obvious that, no private/foreign banks does adhere those guidelines. Instead, the Credit Card Operators expects their customers must follow the unjust, unethical, and legally void-able rules and regulations laid by the banks unilaterally.
Protect yourself from credit Card fraud by following the simple suggestions given below:
Credit Card Fraud – Improving Security http://services.eliteral.com/payment-gateway-india/fraudalerts.phpPayment Gateway | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| doweshowbellyad=0; In India, credit card fraud is mostly limited to the physical space. Online con jobs make up just about 1% of the total numbers here, unlike 40% in the developed world.
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http://www.nd.com/resources/smartsoft.html
Fraud Detection Using Neural Networks and Sentinel Solutions (Smartsoft)
Fraud detection is a continuously evolving discipline and requires a tool that is intelligent enough to adapt to criminals strategies and ever changing tactics to commit fraud. Despite the best efforts of the FBI and other law enforcement organizations, fraud still costs American companies an overwhelming $400 billion (reference) each year. With the relatively recent growth of the Internet into a global economic force, credit card fraud has become more prevalent.
It is in a company and card issuer’s interest to prevent fraud or, failing this, to detect fraud as soon as possible. Otherwise consumer trust in both the card and the company decreases and revenue is lost, in addition to the direct losses made through fraudulent sales.
How do Neural Networks Help with Fraud Detection?
The inherit nature of neural networks is the ability to learn is being able to capture and represent complex input/output relationships. The motivation for the development of neural network technology stemmed from the desire to develop an artificial system that could perform "intelligent" tasks similar to those performed by the human brain. Neural networks resemble the human brain in the following two ways:
- A neural network acquires knowledge through learning.
- A neural network's knowledge is stored within inter-neuron connection strengths known as synaptic weights. The true power and advantage of neural networks lies in their ability to represent both linear and non-linear relationships and in their ability to learn these relationships directly from the data being modeled. Traditional linear models are simply inadequate when it comes to modeling data that contains non-linear characteristics.
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What is Sentinel?
Sentinel is a complete solution designed to prevent, detect, analyze and follow up banking fraud in any entity or corporation in the financial business. Specific fraud detection solutions may include:
- Credit
- Debit
- ATM
With Sentinel your company can monitor the activities of accounts, cardholders and merchants by using a robust and powerful technology based on rules, parameters and indicators. In other words, you can obtain immediate results from the moment you install the software.
Sentinel allows you to:
- Process data from any origin, whether it comes from transactions, merchants or cardholders.
- Monitor issuer, acquirer or banking activities.
- Examine information by strategic business units such as countries, regions, banks, etc.
- Analyze data from a managerial perspective, through a technology known as “Business Intelligence.”
- Evaluate the performance of the rules created in the system and the profit generated by them.
- Minimize risk and loss due to banking fraud.
What is Neural Fraud Management Systems (NFMS)? The Neural Fraud Management System is a completely automated and state-of-the-art integrated system of neural networks, Fraud Detection Engine, Automatic Modeling System (AMS), supervised clustering, and system retune.
Combined with Sentinel the Neural Fraud Management System (NFMS) can automatically scale the relative importance of fraud to non-fraud, group symbols to reduce dimensionality, and evolve over time to detect new patterns and trend types in frauds.
By adding the intelligence of neural network technology to an already successful rule-based system, you can increase the detection of legitimate fraud transactions up to 80% with as low as 1% false detections or less!
How does NFMS work?
- The Neural Networks are completely adaptive able to learn from patterns of legitimate behavior and adapting to the evolving of behavior of normal transactions and patterns of fraud transactions and adapting to the evolving of the behavior of fraud transactions. The recall process of the Neural Networks is extremely fast and can make decisions in real time.
- Supervised Clustering uses a mix of traditional clustering and multi-dimensional histogram analysis with a discrete metric. The process is very fast and can make decisions in real time.
- Statistical Analysis ranks the most important features based on the joint distribution per transaction patterns. In addition, it finds the optimal subset of features and symbols with maximum information and minimum redundancy.
- The Fraud Detection Engine can apply the generated model by AMS on input data stream and output the detection results by specified model: Neural Networks, Clustering, and Combined. The Fraud Detection Engine supports both Windows and UNIX platforms.
- Retuning the basic model created by AMS to adapt to the recent trend of both the legitimate behavior and fraud behavior and update the model for Fraud Detection Engine.
- The Automatic Modeling System (AMS) chooses the important inputs and symbols, train and create clustering and neural network models.
Advantages
- Significantly reduces losses due to fraud.
- Identify new fraud methods to reduce fraud losses and minimize false positives.
- It can work in real time, online or batch modes.
- Reinforce customer trust.
- Improve operational efficiencies.
- The system could develop better models by customizing the model to the Banks unique environment.
- Build and update models as the new business requirements or changes in the environment.
- The system gives you the flexibility to easily incorporate data from many sources to the neural models.
- You have the ability to build your own custom model, in house, without being an expert in AI programming. The final user could use the wizard-based interface to create new models or change the existing ones.
- Combine multiple Artificial Intelligence technologies to identify suspicious activity (clustering, neural networks, rules, profiles).
- It provides all life cycle to avoid fraud, including the stages: monitoring, preventing, detecting, registering, learning, self building.
- Boosts analyst productivity and improves effectiveness of fraud operations.
- Non intrusive implementation and easy to integrate with standard protocols: XML, SOAP / Web Services. Additionally NFMS provides API to enable an easy integration in the Bank environment if necessary.
Success Stories
- León Bank in
- Guayaqyuil Bank in
- Credit Card Issuer Bank* saved over $3,000,000 (US Dollars) in the first 10-months of 2003 with a fraud reduction of 30% from the prior year. (Full Text PDF)
* This is the success story of one of SmartSoft’s clients, whose name they requested not to be revealed.
Contact Information
If you would like to learn more about Neural Fraud Management Systems (NFMS) or if you would like to speak with us about a project you have in mind. Please contact us with a brief description of your idea and how we can contact you for more information.
Easy ways of credit card fraud and ways to protect yourself
2006-12-07 17:29:00 Source : Moneycontrol.com
Email Print Version
How many times do we hand over our credit card to the waiter at the end of a scrumptious meal at a good restaurant? The thought never enters our mind that this simple act can easilydefraud us. Think you can relax as you've never made an online purchase?Don’t sit back as yet. Most of us have never made a purchase online but there are several ways your credit card can be misused.
Her are twoexamples ofthe recent past thatshould make us sit up and be on guard.
This credit card racket was uncoveredinthe tourist areas of
Recently another racket of misuse of credit card came to lightin Thane near Mumbai. A sales clerk of the Globus store would pass on copies of the charge slip to his accomplices and they would thenpurchase airline tickets with the help of that information. ICICI Bank officials got the wind of it and sent out an alert.
These are only few incidents of scams being discovered. But there are surely manyof which areundiscovered or still cooking in crooked minds. So what can you do to keep your credit card from being misused?
Precautions you must take to ensure safe usage:
- On receipt of a new cardensure that it is in sealed condition and that the seal is not tampered.
- Monitoryour account regularly either on the internetor from call centres.
- Also subscribe toemail and mobile alerts to keep track of card usage. Ensure that the card is swiped in your presence wherever the card is presented.
- Whenever youtravel abroadkeeptrack of your transactions.
- Sign on the back of yournew card as soon as you receive it.
- Preserve the card account numbers and the personal identification number in a confidential place.
- Periodically check yourcards to ensure that none are missing.
- Destroy and dispose all documents that mention the card number, such as copies of receipts, airline tickets, travel itineraries etc.
- Memorize your card's PIN number
- Personal account information should never be shared with anyone unless payment for the purchase is being done from that account
- Cancel all inactive accounts
(Also read - Prepaid cards: Hedge exchange rate risks on foreign travel)
Your card company is working with you
The credit card company and bank also tries its best to prevent misuse of the card. “High value transactions on new cards are allowed only by manual authorization. Bank does tele-calling on abnormal/suspicious and close monitoring of transaction trends for customer confirmation and educating regular card usage,” says Sachin Khandelwal, Head-Credit Cards, ICICI Bank.
Meanwhile companies like Master card have introduced several innovative measures to prevent the misuse ofcredit cards. “From holograms and the tamper-evident signature panel to card validation codes, MasterCard security innovations have been adopted as industry standards. Recently we have introduced MasterCard Internet Gateway and MasterCard 2-factor authentication service,” assertsNitin Gupta, Country General Manager,
Your debit card needs protection too.
Debit cards need even more protection than credit cards since they are open to access to your entire bank account and not a limited credit. Debit cards can also be misused but the proportion of such misuse is very low in
Does insurance help?
If you read the fine print, insurance cover is only for a lost card and it gets activated only after you have reportedyour loss of card. It does not cover frauds like these.
Who will pay for the money that has been defrauded is still a minefield open to speculation and litigation. So prevention is the only answer.
The author, Shalini Amarnani, is a freelancer. Fantastic Example of Credit Card Frauds
Amit Tiwari had many names, bank accounts and clients. None of them were for real. With a plan that was both ingenious and naïve, the 21-year-old engineering student from Pune tried to defraud a Mumbai-based credit card processing company, CC Avenue, of nearly Rs 900,000.He was arrested by the Mumbai Police on August 21, 2003 after nearly an year of hide and seek with CC Avenue. He's been charged for cheating under Section 420. Amit will remain in custody till Friday, August 29.
Here's how it happened…
Also Read:
| Other Resources |
Three-in-one fraudster
In June 2003, Sachin Deshpande and Jeevan Palani signed separate agreements with
The company's risk-management team found that both these sites had ripped off content and even the client list from foreign sites with similar names. The modus operandi was similar to Amit's.
Vishwas Patel, the CEO of CC Avenue, spoke to Sachin over the phone and found that he sounded just like Amit - "young and immature". They decided to hold back payment.
Then, a person called Shoaib Sharif sought the services of
Trapped
On August 21, a young man walked into Vishwas's office. He introduced himself as Shoaib Sharif. Vishwas immediately recognized him as Amit. (He had seen Amit's photograph from his driver's license).
Vishwas then called the Mumbai Police, who rushed to his office and picked up the lad. At the
Flaw in law
Despite his confession, Amit has not yet been booked under the cyber crime laws. Senior Inspector Kishore Patil said they would treat it as a case of fraud.
Vishwas explains, "The biggest flaw in the IT Act is that credit card fraud is not covered. The lawmakers have framed the Act mainly to ensure the safety of individual digital certification companies."
Ways and means
Clad in t-shirt and jeans, Amit looks like any other collegian. But when this 21-year-old speaks of his exploits, he assumes the air of an expert.
He got some credit-card details through a popular hacker chat room. But he created the rest. He explains, "Each credit card has a country code number, a bank code number and then some other digits. If you find out these first two sets of numbers, it is very easy to create a credit card number. That's what I did."
Amit then used proxy servers to camouflage his real location and pass
Talent misused
"I am Sachin Deshpande. I am Jeevan Palani," he says with a smile. He created different accounts with the HDFC and ICICI banks with these names. Posing as an office boy, he opened an ICICI bank account for his 'boss' Shoaib Sharif.
Says Vishwas, "This reminds me of Leo's movie, 'Catch me if you can'."
Amit seems proud of what he's done. Initially he did run a Web designing business. But when he signed up with
Elder brother Anil says they were aware that Amit had launched a Web site. But they knew nothing of the fraud. In his confession, Amit corroborated his brother's statement.
Amit says he used the money to pay capitation fees at the engineering college where he studies. But he continued to defraud
Listening to him, Vishwas is amazed at the boy's knowledge of the system.
Vishwas says, "He has tremendous talent. I don't want to ruin his career. That's why I hope he will use his intelligence to plug security holes rather than exploit them."
(Source:Rediff.com)
Lost your credit card? Inform call centre
VIDYALAXMI
Has anyone stolen your card or have you lost it? The first thing you should do is call up the bank’s 24-hour call centre. You have to be prompt in your action otherwise, you may end up with a huge outstanding balance if someone else misuses your card.
Lost card: Customer is liable
In India, credit card companies have a provision in their contract with the customer that the company is not liable for fraudulent transactions unless the customer reports the loss immediately. Sometimes, banks provide that cardholders enjoy a zero lost credit card liability only after the loss is reported to the bank in writing/or via telephone.
What does this mean?
‘Zero liability’ means that you need not pay a single penny if your credit card is stolen or has been subjected to fraudulent practices. However, in
When you call at bank’s 24-hour call centre number, the tele-banking executive will confirm few personal details to ensure that you are the original card holder. Subsequently, the card is deactivated with immediate effect. After this, you carry zero liability on any fraudulent transactions on your card.
Some banks offer some leeway. ABN Amro Bank, for instance, offers an insurance cover, which takes care of any fraudulent practice till the card is deactivated. The premium of this cover works to around Rs 100 per month. The minimum / maximum amount of the insurance cover is Rs 2,000/Rs 5,000. Says ABN Amro’s consumer banking head Sumant Kathpalia, “We do not market the insurance cover along with the credit card. It is optional and the borrower can avail, if needed.”
Even SBI Card has capped the lost card liability up to a maximum of Rs 1,000. This protects you against misuse of your card up to a stipulated time till you report the loss to us in writing.
International scenario
Industry experts say, as per international standards, you do not have any responsibility for unauthorised charges after you report the card loss to the concerned bank. But, what is different in other developed economies like the
In some cases, this fee is also waived off if the customer has shown a good financial discipline. In case, you report the card loss on the second day, your liability increases to $100. If you wait for three days, your liability shoots to $500. If you wait for more than 60 days, you are liable for every single payment.
Explains a senior-ex banker, “The customer is well protected from credit card frauds in countries like US. Even if the customer fails to notice the credit card loss, he/she will at least realise when they receive the monthly statement. So, the 60-day limit is never tested and liability for thefts is limited at $500 prior to 60 days.”
Why is it different here?
When the credit card companies were asked a question, why the liability wholly shifts to the customers, this is what they have to say, “Bank runs out of money if the card is swiped. There has to be a charge back-process and the customer bears the brunt if the loss is not reported immediately,” said one banker.
Explains a senior banker who handles the credit card portfolio in a private bank, “We are familiar with the cardholders spending pattern over a period of time. When a credit card is stolen, it is immediately swiped on large transactions over a period of few hours to two days. If we see a drastic change in the spending pattern or in case any such large transaction, we call up the customer personally and check if he/she has carried out a transaction. If it’s an online transaction, we also send an email. This largely curbs the possibility of the customers to pay huge outstanding amounts on fraudulent transactions.”
He argues, when the bank takes cautious steps to ensure the authenticity of such transactions, the least a customer can do is report the card loss immediately.
Unscrupulous practices of citibank Chennai, India
| June 23, 2006 |
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Credit card fraud busted
20 Feb, 2007 l 0355 hrs ISTlTIMES NEWS NETWORK
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The accused with a malafide intention used credit cards and cheated many banks, said police.
Police seized 31 credit and debit cards of various banks, 2 EDC machines of the IDBI bank and Centurion Bank, a PAN card and other documents from him.
The accused set up a business in Kacheguda and acquired two EDC machines from IDBI bank and Centurion bank. Thereafter, he reportedly took credit cards from various banks by submitting forged documents.
Thursday, May 03, 2007
$1.5 Billion ripped off from Indians
Credit Card companies operating in
In some cases, customers who happen to default repayment, the situation takes a unhealthy turn with the ‘goondas´ turning up on behalf of the bank.
Caution: Their is a Bangalore based company which claims to be set up for the welfare of Credit Card Holders, but when I went through the enrollment form it is asking for my Name,Address and Credit Card Numbers. Why do they want my credit card numbers ? Never disclose your credit card number and expiration date to anybody.
Wednesday, April 25, 2007
Citibank and HSBC Violate RBI Norms
Citibank and HSBC have violated RBI norms while dealing with Credit Cards in
- HSBC and Citibank purposely delayed sending Credit Card bills to customers so that he had very little time to come up with the money to pay his bill
- Both the banks purposely delayed collection of cheques made towards cerdit card payments such that they would collect Late Payment Fees from the customer.
- HSBC and Citbank were doing business in
- HSBC and Citibank don't have Toll Free 24/7 Customer Care numbers
- HSBC and Citibank both failed to provide detailed Terms and Conditions documents so that the customer had no proof when he disputed
- HSBC and Citibank both had no provisions of providing Terms and Conditions in local language as necessary by the RBI law.
You can write about how your credit card company is cheating on CardBhai Forum or also to RBI and let them know of the Crimes committed by these banks who are here to serve people and not loot them.
Tags: India Credit Card, HSBC, Citi, Credit Card Fraud
Labels: HSBC-Citi-India
A Quick Guide to Third-Party Credit Card Processors | Home | How To Choose a Good Credit Card Processor For Your Home Bus »
10 Things You Should Know About Credit Cards
By admin | May 28, 2007
Maybe these 10 items may answer some questions you have about
using credit cards. Make sure to check out the link in #1.
#1. Don’t Use Them.
Credit cards accounted for 1.3 million Americans filing
bankruptcy in 1998.
#2. If you use credit cards pay them off each month.
Carrying a balance on your credit cards could add up to hundreds
of dollars each year in interest and penalties.
#3. If you can’t pay off your credit card balance each month,
pay as much as possible.
Every extra dollar you pay over the interest charges goes toward
paying off the principle. Minimum payments are 90% interest and
10% principle.
#4. Never obtain a credit card based on an introductory interest
rate.
Introductory interest rates are strictly bait to get you hooked.
After a short period of time the intro rate increases
substantially.
#5. Be careful consolidating your credit card debt.
Whether you use equity in your home or find another credit card
to lower your interest rate, there are things you MUST DO. If
you pay off a credit card you are going to receive constant
offers, either checks in the mail or special offers, to use that
credit card again. Be sure to cut up the credit card you paid
off and contact the company to cancel.
#6. Do not obtain credit card protection.
Many credit card companies offer credit card protection for a
fee. This is normally a percentage of the outstanding balance.
According to the Federal Trade Commission,
(http://www.ftc.gov/bcp/conline/pubs/alerts/lossalrt.htm) you
are only obligated to pay the first $50 when your credit card
is used by someone unauthorized. You could easily pay several
times the $50 for credit card protection in a year.
#7. Don’t keep more that two credit cards.
The biggest reason for this two card rule is that it is easier
to keep track of possible errors and current interest rates
with no more than two cards. Some credit card companies will
increase your interest rate without prior notification. You must
look at your statements each month and inquire about any
discrepancies.
#8. Always mail your credit cards bills at least seven days
prior to the due date.
Currently, credit cards companies are allowed to charge a
maximum of $29 for late fees if the bill is not paid on time.
With delays in the mail and processing time once the bill
reaches the credit card company offices, you need at least 7
days to be sure it is posted on time.
#9. Always protect your credit card numbers from others.
Be sure that you don’t allow unauthorized people to see your
credit card numbers. It is very easy to use someone else’s
credit card, as stores are very lax in their security of
handling credit cards, seldom checking to see if the signature
on the back of the card matches the one on the credit card form.
Never give your credit card number over the phone unless you
know who you are talking to.
#10. Don’t use credit cards for groceries.
Buying things like groceries with a credit card, unless you
pay the card off each month, is a no win situation. Buying
recurring items like groceries will only tend to increase your
credit card debt each month.
About the Author
Terry Rigg is the author of Living Within Your Means - The Easy
Way http://www.homemoneyhelp.com/ebookadpage.html and editor
of The FREE Budget Stretcher Newsletter and Budget Stretcher
web site http://www.homemoneyhelp.com. He has 25 years of
experience counseling individuals and families concerning their
personal finances.
Indians are receiving free credit card offer letters. You have to treat these letters with utmost CAUTION. Raj an MNC executive received a free credit card offer letter but with a TRAP - Raj is eligible only if he has any existing credit card and Raj who already had three wanted the fourth to make some pre-wedding purchases. Raj quickly filled in all the details including his existing credit card number, personal details such as date of birth, PAN and sent it.
A week past by, Raj had no card on his hand. Unfortunately Raj left the country asking his father to pay his credit card bill. Raj on business trip in
A fortnight later when Raj returned home, he asked his parents why haven't they paid the bill and they replied they never received one. Raj, then calls the call center and finds out that the address on card is not the same as his and was changed just couple of weeks ago. Raj, now realizes that he is in credit card trap and heads straight to the bank and files a complaint. Apparently, what the scamster did was using Raj's personal details he changed the address and requested for a new card and spent the entire limit. Raj had to also file a Police complaint but until then the credit card companies have held Raj responsible and he has to pay the monthly bill. You all know the fate of Police complaints in
So beware of using credit cards in
Calculation of Finance Charge by HDFC Credit Cards
Many of you still don't quite understand how Finance Charge is calculated on balance amount by credit card companies. I found that HDFC Credit Card is one of the better ones who explain it very clearly.
Here is a step by step guide on how Finance Charges are calculated.
- Assume you have Zero balance on your card to begin with.
- You now make a Biz Bazaar household purchases worth Rs 15,000 on April-10th. Then on 18th April you buy a Mobile Phone worth Rs 5,000. Lets say your billing cycle ends on the 18th of every month. So your April-18th credit card statement lists Total Dues as Rs 20,000 and Minimum Payment of Rs 1,000.
- Due Date for making entire payment or at least minimum payment is May-2nd.
- Lets assume you miss the May-2nd deadline. This is very bad to your credit history. Creditors think you don't even have the money to make minimum payment. Missing Minimum Payment will attract you additional fees known as Late Payment Fees.
- If you make minimum payment by May-2nd then their is no Late Fees in your next credit card bill.
- Assume you have not made a minimum payment by May-2nd and on 12th May you pay Rs 2,000.
- You purchase groceries worth Rs 1,000 on May-14th.
- On May-15th you make a payment of Rs 15,000
- Thus on your May18th Bill you will see the following,
- Late Payment Fees of Rs 350
- Interest on Rs 15,000 @ 2.95% pm [whatever your APR is] from 18th April to 12th May.
- Interest on Rs 13,000 @ 2.95% pm from 13th May to 15th May
- Interest on Rs 5,000 @ 2.95% pm from 18th April to 15th May
- Interest on Rs 3,000 @ 2.95% pm from 16th May to 18th May
- Interest on Rs 1,000[Fresh Purchase] @ 2.95% from 14th May to 18th May
Add Service Tax on Late Payment Fees + Interest.
Total outstanding = Rs 4,000 [Rs 3,000 from Previous Bill and Rs 1,000 Fresh Purchase] + Service Tax+ Late Fees + Interest = Rs 5,000 say.
Thus you are un-necessarily paying a hefty fees of Rs 1,000 to credit Card company on just Rs 4,000 outstanding balance.
Always pay at least minimum fees by due date. Still better, pay off the entire debt vy due date to avoid any FEES!!!!
Labels: CreditCard-Finance-Charge
Published by CardBhai @ 11:04 PM 0 Reader Comments
Tuesday, March 27, 2007
Credit Card Question and Answers
if (myadcount==1) { document.write(''); myadcount++; } User: Which is the better CC in which one can pay back in longer time duration with minimal interest on the borrowed amount?
CardBhai: Credit cards are not the best choice to borrow and interest costs are very high. If at all you want to borrow on an undecured loan you should go for unsecured personal loans. In fact if you can possibly give security such as financial assets (Life insurance policies, fixed deposit certficates, mutual fund units, bonds, jewellery, etc.) you will get the cheapest loan.
User: Which loan should one opt for - personal loan or loan on existing credit card ? In which one shall I get lower interest rate.
CardBhai:If you have a good repayment track record on your existing credit card and also have good provable income papers [IT Returns / Salary Slip] then personal loans will definitely be cheaper. Even otrherwise personal loans will normally be cheaper than loan facility provided on a credit card.
User: Bank refuses to take Cheque and acknowledge with a seal on the slip.
CardBhai: RBI has clearly directed that banks will need to cumplosorily give stamped acknowledgements if the cosnumer does not wish to use the drop box facility and wishes to deposit / make payment across the counter.
User: I have an outstanding of Rs 21,000 on my ICICI CC and about Rs 27,000 on my personal loan. Should I topup my personal loan to pay off my CC outstanding ?
CardBhai: Absolutely you should. Keep your CC off in the cupboard until you pay off your Personal Loan.
You can ask your question on CardBhai Forum.
Published by CardBhai @ 2:59 PM 0 Reader Comments
Saturday, March 24, 2007
Difference Between Debit and Credit Card
if (myadcount==1) { document.write(''); myadcount++; } Many still don't know the difference between Debit and Credit Cards. Debit cards are most popularly known as ATM cards in
During the post-liberalization era, the Indian consumer had very less time in a Day and was looking for self banking. Thanks to K V Kamath who started the modern banking revolution - ATM, Online and Mobile Banking.
ATM/Debit Card:
Debit Cards are always tied to a Bank account [Savings or Current]. Earlier, Debit Cards came with a 4 digit PIN [Personal Identification Number] and you could use it to withdraw cash, view statements etc. They served as a Teller for your Bank account. These days, in addition to PIN and teller type ATM transactions, debit cards are endorsed by VISA or MasterCard and they can be very conveniently used like credit cards, but only if you have sufficient balance in your Account. Since you are using your own money, their is no APR [Annual Percentage Rate] or Interest.
Credit Cards:
Credit Cards are basically unsecured loans given to you by a Bank or a Financial Institution. Every credit card has a pre-set spending limit / credit limit. In
CardBhai suggests always be very conservative when using credit cards. Credit card cloning swipes
And this could drain your account of all your money. Skimming is the latest fraud that has hit
The cyber crime cell of the Chennai Police recently arrested four people for withdrawing money from ATMs through forged credit cards. The police recovered 160 fake international credit cards through which they had planned to withdraw Rs 15 crore.
“There have cheated people of over Rs 20 lakh in the past three days. But, we were able to recover about Rs 6 lakh,” ACP-Cyber Crime Cell, Chennai Police,
The accused have confessed to being part of a UK-based gang that clone credit cards using a small machine called a skimmer that reads the data on the magnetic strip of the card and clones it. The forged cards are then sent to
“Fake card entry slots are used by criminals who perpetuate this crime. The information on the card is recorded on a device hidden in the card entry slot,” says Mark Bowerman, Corporate Communications, APAC.
Two days before these arrests, the Mumbai Police arrested a Malaysian national for using cloned credit cards to shop at five-star hotels, malls and jewellery stores in the city.
The accused had skimmed credit cards of tourists in
(With inputs from Vivin Mathew)
CRIME: CREDIT CARD FRAUD
Discredit Cards
From thefts to circulation of fakes, crime involving plastic money takes a bolder turn but monitoring technology and legislation remain inadequate
By Sandeep Unnithan
At first, nothing seemed amiss about the trio. Like a growing number of youngsters of their age, they too were out to have a rollicking time. Branded clothes, flashy girls, discos-life was one long party, money a non-issue. The credit card took care of it all. Until, of course, the Mumbai Police received a tip-off.
When the police acted on the information and arrested the three in May-Charanjit Singh Chaddha, 24, Karanjit Singh Sethi, 23, and Gaurav Bakshi, 26-even the law enforcers had not bargained for what they recovered: 80 credit cards-and all of them fake. The youths, it transpired, were from
| CLEAN SWIPE |
| CARD SHARP: Mathew made purchases worth Rs 15 lakh on stolen card numbers |
More recently, the Mumbai Police arrested Ravi Shankar, a 34-year-old unemployed computer engineer who bribed a waiter in a city hotel for credit card numbers of customers. Using two of these, he ordered two music systems, a synthesiser and a mobile phone from durableshop.com, a Chennai-based e-commerce site. His luck ran out when a suspicious courier company alerted the police just as he was to take the delivery of a new laptop. Similarly, two months ago the police in Kottayam, Kerala, arrested Arun Mathew, a 30-year-old engineer who swapped pornographic pictures for credit card numbers with a front-desk staffer of a
While credit card frauds are nothing new, what has shocked the police is the growing audacity and scale of the crimes. Billed as a convenience tool, plastic money is as convenient to pick. The global village's criminal now finds it easier to swipe your card and key in its pin number than to point a gun in your face and rob you. The bag of tricks appears to be full. They range from the relatively dated method of stealing the card in your mail to more tech-savvy ones like hacking websites to get hold of credit card numbers.
"Credit card fraud is the bank robbery of the future," says DCP Dinesh Bhatt of the Delhi Police's Economic Offences Wing. According to a study conducted by the Credit Card and Management Consultancy (CCMC), an Udaipur-based firm, card-related frauds are now increasing at an annual rate of 30 per cent in
Just two months ago, the Delhi Police busted a racket in which the employee of a courier company had intercepted and stolen eight credit cards despatched by the State Bank of
"Going by the experience of developed countries, card fraud in
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How to prevent credit card fraud
Ellen Simon in New York | June 23, 200514:41 IST
You may not be able to keep hackers or dishonest employees out of your credit card processors' office, but you can keep thieves from filching your credit card information from the garbage.
Consumer advocates and credit card companies say people can take simple defensive measures, from checking statements often online to calling their credit card company immediately if a monthly statement doesn't appear in the mail.
Credit card fraud is in the spotlight after a string of data thefts and losses, most recently the disclosure that�40 million credit and debit card accounts were at risk for fraud after hackers broke into a company that processes payments for all the major cards in the
Still, credit card fraud is on the decline in the
Issuers lost only 4.7 cents for every $100 in credit card charges in 2004, down from a peak of 15 cents for every $100 in 1992, according to The Nilson Report, a trade publication.
Why is fraud down? Cheap telecommunications costs mean that 98 per cent of all transactions receive authorisation. Systems built by Visa and MasterCard also run transactions through fraud-monitoring neural networks before they're authorised, according to Nilson Report.
Visa introduced an authorisation system last week that checks each transaction against system-wide fraud patterns and personal spending habits.
Such security measures mean that some unusual transactions can be denied.
When
The company wouldn't let her make purchases even after she got on the phone at one shop and verified her account number, her mother's maiden name and her own social security number.
Knight was able to use the card only after an American Express representative checked her voice against her voicemail at work and spoke to her office receptionist to confirm she truly was an employee.
"She came back on the phone and said, 'Yeah, that's you,'" said Knight.
Yet even as the rate of credit card fraud shrinks, it remains a threat that consumers can fight by taking commonsense precautions:
- Make sure your credit card company has your current phone number so the company can call you if they see a suspicious pattern of charges on your card, said Tom Kelly, a senior investigator at Stroz Friedberg Investigations, a division of a computer forensics and technical services company.
- Don't use a debit card over the Internet. Your credit card fraud liability is limited at $50 but debit card fraud could drain your checking account, said Ed Mierzwinski, a consumer advocate at US Public Interest Research Group.
- If you get a phone call or an e-mail about suspicious activity on your account, give no information over the phone or online. Instead, take down the card representative's name and call them back at the number listed on the back of your card, Mierzwinski said.
- Keep track of your transactions. You should be able to tell a company representative what your last five transactions were, said Susanna Montezemolo, a policy analyst at Consumers Union.
- Use your credit card less, said Paul Richard, executive director of the
- Notify your card company if a monthly statement or an expected new credit card fails to arrive in the mail. Shred statements once you've checked to make sure they're correct. Shred credit card solicitations, too, so someone else doesn't apply using your name.
- Keep your receipts and check your credit card statement against them. If you have online access to statements, check them weekly, Montezemolo said. "Some people find, through an honest mistake, that a store has added an extra zero to a transaction," she said.
- Also be on the lookout for small unusual transactions, Mierzwinski said. "Sometimes the bad guys will test an account at a gas station," he said.
- Keep a record of your account numbers, their expiration dates and the card company's phone number in a secure place.
- Don't leave your credit card payments in your home mailbox. Instead, mail them at a post office or a secure mailbox.
- When you travel, be careful about using your credit card at Internet cafes or anywhere with a wireless connection.
- Check your credit report at least once a year.
- If you find incorrect transactions on your statement, call your credit card company immediately then write the company with the same information and keep a copy of the letter, Montezemolo suggests.
Taking precautions may seem like a pain, but the stakes are high.
"It's your financial well-being," said Montezemolo. "It's surprising how many people don't do the things we assume everyone does: Check their credit card statements and bank balances and balance their checkbook."
Brian Bergstein contributed to this report.
http://creditcardvictims.org/page/eng
http://www.youtube.com/watch?v=sexUus0igWs
DANGER FROM OUTSIDE.
Apart from the Credit Card Providers, other parties also were indulging in looting the public money.
In the name of "Phishing" and "Credit Card Cloning or SKIMMING", these atrocities were taken place. "Phishing" is a technique to loot the Credit Card Holders� money by floating a fake website of the bank.
Normally those customers who are using the e-banking services are the targets for these kinds of frauds.
A unanimous e-mail will reach the customers informing them that, they were chosen for some special offers by the bank. And an instruction will be provided to �click� the linked website in the mail itself. If the customer clicks that link a website similar to the bank�s website will be opened.
That duplicate website will require some details such as your Name, Account Number and Pin Number to verify your account and transfer the "Prize Fund". If you mindlessly provide those details, the amount in your account will be gone.
An Introduction
Credit Card has become an integral part of everybody's life today. Many of the Credit Card holders become a Credit Card Victim by the unjust, unethical, dishonest and illegal activities of Credit Card Operators. According to the Reserve Bank of
Many private establishments accepts credit cards only, for online transactions. By the way of denying the usage of debit cards, these organizations push us to the credit card trap. This forcible penetration of credit cards changes our save-and-spend culture and makes us a spend thrifts thus makes us Credit Card Victims.
| entre | Contact details of the Office of | Area of Operation |
| Ahmedabad | Shri Arnab Roy | Gujarat, |
| | Shri. K.R.Ananda | Karnataka |
| | Shri B.P.Kanungo | Madhya Pradesh and Chattisgarh |
| | Shri P.K.Jena | Orissa |
| | Smt. Balbir Kaur | Himachal Pradesh, Punjab and |
| Chennai | Smt Harmesh Khanna | Tamil Nadu, |
| Guwahati | Shri K.R.Das | |
| | Shri.M.Sebastian | Andhra Pradesh |
| Jaipur | Shri P Vijaykumar | Rajasthan |
| | Shri B.K.Bhoi | Uttar Pradesh (excluding District of Ghaziabad) and Uttaranchal |
| Kolkata | Shri C.V.George | West Bengal and |
| Mumbai | Smt. Rashmi Fauzdar | Maharashtra and |
| | Shri H Kulshreshtha | |
| | C/o Reserve Bank of | |
| | Smt. Suma Varma | Kerala and |
Complaint Form
He can also file it online at www.bankingombudsman.rbi.org.in or
| Annexure ‘A’ |
| Complaint No. ………of year ..… |
| To |
https://reservebank.org.in/compltindex.htm
Complaint Form | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Territorial jurisdiction, Place of BO’s office……)
Consumer Grievance Redressal Forum
To avoid such complications between the Credit Card Operators and the Credit Card Victims, Reserve Bank of
According to RBI, the card issuing bank/NBFC should constitute Grievance Redressal machinery within the bank/NBFC and give wide publicity about it through electronic and print media. The name and contact number of designated grievance redressal officer should be mentioned in the credit card bills. The designated officer should ensure that genuine grievances of credit card subscribers are redressed promptly without involving delay.
The grievance redressal procedure of the bank/NBFC and the time frame fixed for responding to the complaints should be placed on the bank's website. There should be a system of acknowledging customers' complaints for follow up, such as complaint number/docket number, even if the complaints are received on phone.
If a complainant does not get satisfactory response from the bank/NBFC which is a subsidiary of a bank within a maximum period of thirty (30) days from the date of his lodging the complaint, he / she will have the option to approach the Office of the concerned Banking Ombudsman for redressal of his / her grievance/s. The bank/NBFC which is a subsidiary of a bank shall be liable to compensate the complainant for the loss of his time, expenses, financial loss as well as for the harassment and mental anguish suffered by him for the fault of the bank and where the grievance has not been redressed in time.
But in practice no bank, other than nationalised banks' Consumer Redress Grievance mechanisms are made public.
CITIBANK :
http://www.online.citibank.co.in/
http://www.online.citibank.co.in/portal/newgen/seo/customer/customer-service.htm
GRIEVANCE REDRESSAL
| A. Regular Access Channels | ||
| At Citibank, we aim to provide you with the best Customer Service. However, if you have a problem or wish to register a complaint, you can reach us at any of the following access channels.
|
| B. Escalation of your Complaints |
| Corporate Grievance Redressal |
| C. Citibank Grievance Redressal Officer (Nodal Officer) | |||
| If you are not satisfied with the response that you receive or if you do not hear from us within 10 working days of having escalated your complaint, and wish to raise the issue with a senior officer within the bank, please contact | |||
|
| D. Reserve Bank of |
| As per the Reserve Bank of India Banking Ombudsman Scheme, 2006, a customer can file his complaint before the Banking Ombudsman if the reply is not received from the bank within a period of one month, after the bank concerned has received his representation, or the bank rejects the complaint, or the complainant is not satisfied with the reply given to him by the bank. |
American Express
http://www.americanexpress.com/india/personal/Cards/apply/default.shtml
American Express Bank Ltd.,
A, A1, A2, Enkay Center,
Udyog Vihar Phase V,
Gurgaon, Haryana - 122016,
India.
http://www.americanexpress.com/india/customerservice/contactamex_phone.shtml
http://www10.americanexpress.com/sif/cda/page/0,1641,16179,00.asp?in_merch=merchsvcs_reducefraud16179
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* From other cities, dial (0124) 2801800 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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* From other cities, dial (0124) 2801800 | ||||||||||||||||||||||||||||||||||||||||||||||
http://blogs.vbcity.com/shandy/archive/2005/01/21/835.aspx
Well sooner or later I had to get caught out by it :( I am currently in dispute with my credit card company (well not so much them as Textiles Fair Jaipur). When we were
I hadn't got enough money to pay cash so I produced the credit card, signed the receipt along with a couple of other documents, whichI was told were local government documents (and they looked the part). Now whenthe proprietor was filling outthe receipt he asked what the date was so I immediatelyassumedthe front about his birthday was to put us in a good mood in the hope we would not barter him downand we left. (Had he really forgotten what day his birthday was on). I smiled and assumed that was all part of the bartering experience and we left, carpet in hand and went on to a restaurant.
When we got back from
AlarminglyI also came across this thread, http://www.indiamike.com/india/archive/index.php/t-7162.html. Another person had been to the same shop and hadone legitimate and one bogus transaction placed against their card using exactly the same two companies. So this appears to be a not uncommon occurrance with this shop.
Needless to say I have no intention of paying the bill. The amount is imaterial. I just don't like to be conned. It will be interesting to see the reaction of my credit card company. I assume I am not liable until the original, pen written receipt is produced but I know nothing about law. You'd assume that once a few people had complained about this the credit card companies would have some sort of agreement where they take the criminal to court and got him locked up ...
Anyway I thought I'd write this blog entry in case anyone else got caught out using this shop and does a search like I did on google. At least they will have two people to back up their claims of being conned.
posted on Friday, January 21, 2005 7:53 PM
Copyright © Shandy
Nothing to do with the film of the same name (if there is one). This is a continuation of my previous post Credit Card Fraud. Well we have some small progress. I have contacted by credit card company to tell them I am disputing the transaction even though the signature appears to be mine as either it has been forged or it has been obtained using disception. They are sending out a form to
posted on Wednesday, January 26, 2005 8:41 PM
Two held for credit card fraud
By Our Staff Reporter
NEW DELHI, JULY 14. Two young men, including a former employee of Standard Chartered Bank, who allegedly siphoned off Rs. 4 lakhs from the bank by using stolen credit cards, were arrested by the Crime Branch on Tuesday.
The police received a complaint that Dalip (21), a former employee of the Standard Chartered Bank, had siphoned off Rs. 4 lakhs from the bank. Acting on a tip-off that Dalip would come to
During interrogation, Dalip disclosed that he worked with Standard Chartered Bank as a customer service officer and knew the procedure to procure credit cards. He managed to get the names and addresses of some cardholders and contacted them claiming that their cards were being misused. He stole letterheads of the bank and sent letters to them saying they should surrender their cards for cancellation and renewal.
His accomplice, Jaspreet Singh (19), then approached the cardholders and collected the cards on the pretext of renewing them. Thereafter, both the accused purchased electronic and other items from
The police said Dalip belonged to Bihar and had graduated from
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vadodara: the police have arrested praharsh brahmbhatt (21) for unauthorised use of standard chartered bank credit card. he had cashed on the credit card, drawing cash from the bank against the limit and purchasing goods worth rs 59,000 from retail shops. the police said this was the first case of credit card fraud here. his two accomplices, akshay patel and imran, are absconding. praharsh has a diploma in mechanical engineering and had worked as a credit card agent for standard chartered bank. "he was entrusted the job of enlisting customers and cancelling credit cards. though he had ceased to be an agent a couple of months ago, he contacted some customers and
got their credit cards on the plea of cancelling them. then he got to know the codes and forged signatures to make purchases on credit", the police said. the police seized two credit cards from praharsh, one of which belongs to v b singh and the other to s n desai, on whose card akshay is learnt to have drawn rs 3,000. on wednesday, standard chartered bank at alkapuri suspected praharsh when he tried to withdraw cash on v b singh's card. the bank learnt that the card had expired and alerted sayajigunj police. within hours brahmbhatt confessed to his crime. bppolice: sayajigunj police pi m m patel interrogating one of the accused in the credit card fraud case.
http://www.fdic.gov/consumers/privacy/faqs/
| Financial Privacy... Our Answers to Your Questions |
| In the Winter edition of FDIC Consumer News, we described your rights to financial privacy under the Gramm-Leach-Bliley Act of 1999. This federal law requires your financial institutions to provide notices describing the type of information they intend to share with third parties and how customers may "opt out" or say "no" to information sharing under certain circumstances. Financial institutions were required to send notices to existing customers by July 1, 2001. Thereafter, new customers also will get privacy notices, and all customers will receive a notice annually. We previously invited readers to submit questions about their financial privacy rights. Here are some of the questions we received, and our answers. |
Saturday, July 09, 2005
CIBIL: Strong arm agency
Why recovery agents are here to stay
RBI guidelines are good, but agents are only practical solution: Banks
Sayli Udas
Mumbai, July 5: ‘‘We will abide by the Reserve Bank of India’s (RBI) fair-trade practice code, but we will not do away with any of our recovery agents.’’
—Neil Chatterjee, Head, Corporate Communications of Standard Chartered Bank.
Despite the RBI’s intentions of cracking down on credit-card operations (see box), banks in Mumbai have admitted that recovery agents have become a part of their debt-recovery system and it would be difficult to eliminate them entirely.
‘‘The intimidation and harassment is exaggerated by defaulters,’’ said Chatterjee, adding that banks do monitor the method of recovery to ensure it happens in a ‘civil’ manner.
‘‘Do we have any other means of recovery?’’ he asked.
‘‘The judicial process in our country is very slow and we are in a business where we need to have a practical approach to recovering debts.’’
Most banks would agree. Only a small percentage of customers default on payments and have to deal with recovery agents, they say.
And agents, they add, only come into the picture after repeated attempts by bank executives have failed.
‘‘The procedure starts when an executive makes a telephone call and informs a defaulter about his dues. Then, we send a few letters and statements,’’ said Rohan Jogi (name changed), spokesperson for a leading Indian private bank. ‘‘It’s only when there’s no response that agents are intimated.’’
While, on record, banks refuse to admit that they’re aware that many recovery agents cross the line, off the record, spokespersons say using abusive language or threatening customers is the only option at times.
‘‘A white-collared guy cannot recover dues,’’ said Jogi. ‘‘You do need a stern voice and a tough-looking guy to get out money.’’
ICICI Bank claims to go through a thorough verification procedure before appointing its agents.
‘‘Any complaints coming to us are immediately investigated and action is taken,’’ said a spokesperson.
Citibank also claimed to have an internal policy on collections and guidelines for their agents, detailing how and when customers should be spoken to.
But despite redressal systems like 24-hour helplines and e-mail facilities, the bank claims that they have to involve a third party to bring defaulting customers back on track.
The solution, say industry experts, could be CIBIL or Credit Information Bureau (
An RBI and government effort to create a comprehensive database on the ‘creditworthiness’ of customers, CIBIL is expected to help banks share data on their credit-card users.
Formed in 2000, CIBIL has started collating data, but it will take at least another year for all the information to be in place.
Until then, recovery agents are here to stay.
New guidelines
* No physical or verbal intimidation or harassment of credit-card users
* Any act intended to publicly humiliate or intrude privacy banned
* Bank responsible for all acts of omission or commission by agents
* Penalty on unsolicited cards issued without consent
* Banks to maintain ‘Do Not Call Registry’
sayliudas@expressindia.com
Credit card scam unearthed; banks, customers take the `swipe'
By Our Staff Reporter
HYDERABAD, JUNE 30. A credit card scam involving illegal exchange of cash on commission basis by misusing swiping machines of various banks was unearthed with the arrest of three persons by the Malakpet police on Tuesday. It is suspected that lakhs of rupees is misappropriated in the scam.
"Enquiries suggest that there is a country-wide network of such offenders resulting in crores of rupees losses to banks and customers," the East Zone DCP, M. Pratap, said at a press conference here. Several private and public sector banks are providing swiping machines in shops and business establishments to facilitate credit card holders purchase goods without payment of money.
Exploiting this provision, one M. Ashok Reddy procured 13 swiping machines from various banks by setting up fictitious companies. By submitting fabricated documents, he led the banks believe that he was operating some firms which require swiping machines so that customers could pay through credit cards for the goods purchased.
Later, he released advertisements in newspapers saying he would arrange loans on credit cards. When clients approached him, Ashok Reddy would swipe credit cards through the electronic data capture (EDC) machines he had procured, take their signatures on the `charge slip' and pay them money after deducting 5 to 6 per cent commission.
"If a customer requires Rs. 20,000, Reddy will swipe for Rs. 25,000, pay Rs. 20,000 in cash to the customer keeping Rs. 5,000 as his commission, which is totally illegal. Later, this amount will be automatically deposited in Reddy's bank account after submission of the charge slips in the bank concerned," the DCP explained.
Actually, if credit card holders required cash, they should go to either ATM counters or to the bank concerned. Thirteen ECD machines (swiping machines), 41 credit cards, bank passbooks, chequebooks, letterheads and rubber stamps of fictitious firms were seized.
The fraud came to light when Standard Chartered Bank lodged a complaint with the police stating three platinum cards issued by its Kuala Lumpur (Malaysia) belonging to Mazlan bin Mohammed, Soo Teong Chuan and Syed Zanian Abidin (all residents of Malaysia) were swiped from Geo-Tech office in Dilsukhnagar. An amount of Rs. 6.50 lakhs ($14,376) was withdrawn thus. Surprisingly, the cardholders informed the bank that they never visited
When the police raided Geo-Tech office, Ashok Reddy confessed to have withdrawn money through the three platinum cards and paid the same to Kishore Kumar, Rahul Reddy and Sridhar after taking his commission. Based on his confession, Satya Deepak of Teja Projects and M. Umanath of Sunrise Indicate Systems were arrested. A hunt was launched to nab Kishore Kumar, Rahul Reddy and Sridhar.
"It is for the bank authorities to find out how and why they have given swiping machines based on fictitious documents. We are probing as to how Ashok Reddy has got credit cards of Malaysian residents," Mr. Pratap said.
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Andhra Pradesh
Is Your Credit Card Safe?
It’s as safe to use your credit card online, as it is otherwise, but take a few precautions
Let’s skip the introduction and go straight to the question—Is it safe to use your credit card number online?
Credit card fraud is not limited to the online world. It’s existed for as long as credit cards have been around, and it’ll exist for as long as credit cards do, in their current form. So, our question should be—Is it more dangerous to use a credit card online?
Available evidence says it isn’t. Or if there’s evidence to the contrary, card issuers are not yet talking about it. After all, bankers are a secretive lot.
There’s no reason for us not to use credit cards online, provided we take a few steps to ensure the security of our transaction. All that’s needed online is the credit card number and date of birth. The online vendor needs neither your signature nor physical access to the card. Your date of birth could generally be known. So, you need to be doubly careful to ensure that your credit card number doesn’t fall into the hands of unscrupulous elements.
Credit card details could potentially be stolen from you, your computer, or from vendors with whom you’ve used the credit card. Let’s take these one by one.
Don’t let your credit card lie around so that someone can pick up the number. Also, don’t give the number out to anyone other than a vendor.
Don’t put your credit card details in e-mail or generally store it in documents on your computer, particularly if it’s a shared or an office machine.
While entering your credit card number at an online store, ensure that you do so only on a secure page. If you’re asking for clarifications or help from the sites, you don’t have to give them your credit card number. If they ask for it, there’s something fishy. Stop all transactions at the site immediately and inform the Webmaster. Don’t enter your credit card number or date of birth as part of the information you give while registering at any site.
Online, the third instance—of the numbers being stolen from the vendor— could happen if someone hacks into an e-commerce server. Frankly speaking, you have no control over this, except hoping that the vendor takes enough care to ensure that his servers are not open to hackers.
The law is not very clear on your liability if someone uses your credit card fraudulently online. But check out with the bank that issued your credit card on their policies and guidelines for the same.
During our reviews in this issue, we were using my Citibank credit card to make purchases online. About half-way through, Citibank called me up to inform that these flurry of transactions were happening on my card and wanted to ensure that they were legitimate.
We called up Standard Chartered’s helpline and asked about the remedies available to a credit card holder in case of any misuse of the card online. Their answer was the card holder can complain about the transaction, but there was no way that the bank could stop the transaction. In fact, they went as far to state that they discourage the use of credit cards online.
The Amex helpline, when contacted said that in case someone else uses the card details online, then the card holder is liable to pay up. -PC Quest
Agents of credit-card fraud
- It can happen to you, beware of the charm marketers CHARU SUDAN KASTURI
-
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Ask Bharat Kumar Mahi.
The anxiety began for the
The SMS told him that Rs 22,396 had been deducted from his ICICI Bank account for three Air Deccan tickets bought against his credit card.
“I had made no such transactions. I immediately called police,” Mahi said.
A day later, the police had uncovered a scary plot — a credit card racket where the crooks weren’t bank employees but the friendly agents seeking your card details on the pretext of helping you. “I had never thought that the simple-looking man who came to my home in April could be behind such a racket,” Mahi said.
Shubhnath Jha, Saroj Singh and Jitender Giri, three of the arrested men, worked as direct selling agents (also called direct marketing agents) who sold credit cards for ICICI, ABN AMRO and Citibank.
They would gently ask customers for their existing credit cards, ostensibly to help them write the card numbers on the form for the new card.
“They would quickly scan the backs of the cards, which carry the secret number, especially the last three digits used in transactions,” said Naresh Kumar, deputy commissioner of police,
The trio would pass these numbers on to the fourth man, Konthujam Ishwar Chander Singh, believed to be the kingpin. Chander Singh would use these numbers to buy airline e-tickets and sell them to other customers.
“This trend of direct selling agents being involved in the racket is worrying. It’s yet to be properly addressed by the banks,” Kumar said.
A fifth man was arrested today after he was found travelling on a fraudulently bought ticket, but banks were unfazed.
“These are rare mishaps. Even the most foolproof of systems can be occasionally breached,” said Rasheed Khan, manager (customer care) with ABN Amro.
The “foolproof” system the banks offer, however, is centred on the customer’s own watchfulness.
On at least two occasions, the supposed agent was not the person authorised by the firm the bank had hired. Therefore, the bank argued, it was not responsible for the customer’s loss.
The police’s advice is, make sure the person before you is the bank’s authorised agent. “The bank then cannot claim not to be responsible,” Kumar said.
Each direct selling agent is assigned a unique number by his firm (which has been hired by the bank). Officers say you should always ask him for the number, his name and contact details of his firm.
Get the bank to corroborate the agent’s identity from the number and confirm that the firm he claims to work for is the one it has hired. Also get the contact details confirmed.
Now call the firm and verify that the agent was indeed sent to you at the time he came to your home.
ABN AMRO : http://www.abnamro.co.in/onlinephishing.html
http://www.abnamro.co.in/AboutUs/branchLocations.html
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We can see a black magnetic strip in the back side of the Credit Cards. That is the memory card having the details of the customer such as his name, date of birth, customer number, id, etc.
Billing Problems
The Credit Card Operators' attitude is very questionable in the billing process. This process may be re-named as, Credit Cards Victimization Process since that amount of unjust, unethical, illegal activity is performed in this area. These companies assure their customers that, they won't be charged (the interest) for first 20 - 50 days. According to their say, the first bill, which is calculated after a usage of Credit Card, should not charge the interest for that usage. But in practice many banks used to charge the interest from the very first bill. Only the vigilant person who monitors their bills and raise their voice can avail the reversal. Other sleepy customers have to pay the inappropriate interest charges also. In effect the Credit Card Customers/Credit Card Victims should understand that any mistake done by the banker or customer is a gain for the bankers only.
In the same manner many items like accident insurance, domestic insurance, etc are included in the bill. But they are free to the consumers as per the Credit Card Operators advertisements. In addition some fishy charges like "Secure Plus", "Secure Plus processing", "Credit Shield" are usual additions in most bills. The customer cannot resist their nod to contribute these fishy charges. As the Credit Card Operators has the computerized accounts, they will charge whatever they want in the poor customers' account.
And if a consumer fails to pay the due amount in the due date then the penal interest will be charged, but as of today there is no regulation exists. If a customer failed to pay the due amount of Rs.50/-, the Credit Card Operators will charge Rs.300 as late fee. No ethics; No morals; No accountability persists in calculating these charges.
Even the Government machinery (of the Sovereign, Socialist Republic of India) is keeping silence regarding the interest issues of Credit Card operations. The Reserve Bank of
nterest Rate
Most of the problems arise from the exorbitant interest rates charged by the Credit Card Operators. In developed countries like
In the nationalised banks, Andhra Bank charges 23.14% per annum (1.75% per month), Bank of India charges 22.44% per annum (1.7% per month), Bank of Baroda charges 23.88 per annum (1.99% per month) and Union Bank of India charges 20.40% per annum for their Credit Card customers.
When comparing with the foreign/private banks, these nationalised banks's charges looks reasonable regarding the interest rates. But at the same time, some big banks are charging high interest from their Credit Card customers on par with foreign/private banks. By doing so, these banks are looting the citizens of
Comparing these interest charges against the interest rates on retail loan products like car loan (7%) / housing loans (9%) / personal loans (14%), and one can realise the fact that the banks pay meager interests only to their depositors. As there is no body / authority / legislation to regulate these Credit Card Operators, they are sucking the life of Indian Citizens. The Finance Ministry and the Law Ministry are very cautious in not to intervene in these issues.
Mera Bharat Mahan !
According to the Tamil Nadu Prohibition of charging Exorbitant Interest Rates (Prevention) Act, 2003, a moneylender cannot charge interest more than 12% per annum, that too in simple interest. The perpetrators can be charged with this Act. But even this Act becomes paralysed before the Credit Card Operators. Hail our nation's sovereignty!
It is very clear that these Credit Card Operators (especially foreign / private organizations) wants their customers should be indebted to these banks for their entire life. By doing this, these Credit Card Operators can suck the life of middle class Indians to the core. Regarding this unjust attitude of Credit Card Operators, Union/State Governments and even the Reserve Bank of
Out-Sourcing of Commitments
The Credit Card Operators appoints private Direct Marketing/Sales/Collection agents to market their products & services, maintain customers' accounts and collect the outstanding debts. By doing so, the Credit Card Operators are willfully ignoring their liability to provide the minimum wages and other labour welfare measures to the employees, laid by the Government. At last, these Credit Card Operators are exploiting not only the customers, but their employees also.
The Direct Marketing/Sales/Collection agencies recruiting the youths for very poor salary and heavy target based incentives. To achieve these high targets, the youth folk are forced to do all the unethical and dishonest things.
In the process of Credit Card Victimization, the primary issue is misguiding the customers by wrong and/or half facts about the card usage, its rules, regulations, interest rates and charges. The next aspect is keeping the customer unaware of the various complications and charges connected with the usages.
The staffs of Direct Marketing Agencies habitually indulged in these kinds of intended fraudulent activities. The Credit Card Operators are also conspired in this illegal venture, by keeping silence and providing the Rules and Regulations printed in fine print (at the back side of the application), which are seldom readable.
This act of the Credit Card Operators provides no chance to the customers to get clarified about the Rules and Regulations in a later date. Practically, it is very hard to read and understand the contents, which were written in a complex legal language even for a highly qualified person. In this situation the customer has to hand it over to the marketing executive immediately after signing the application. As it was sent to the Bank office, no customer can refer the contents of the conditions at any point of time, what he has agreed by way of signing it.
Then the Credit Cards are issued to many ineligible customers. The marketing executives used to sell the cards by providing forged documents. When the customers are not aware of this problem, the Credit Card Operators encourage the attitude of these marketing executives by keep their eyes closed and mouths shut.
When a dispute arises the Credit Card Operators can initiate the legal process against the customer for providing the forged documents. At that point of time generally the marketing executive could have shifted to some other company. Even if he is available the entire liability vests with the customers only as per the contract. So, for the unethical activities of the Credit Card Operators and their Marketing Agents, the poor consumers become victims.
To avoid such circumstances the Reserve Bank of
Guide for Payment Cardholders to avoid falling victim to frauds:
Payment Cards is the generic name used to indicate all kinds of cards that allow the cardholder to transact using them. A Payment card can be a Debit Card or a Credit Card or a Prepaid Card. Banks issue these card types to suit particular customer segments and those cards can be used for some specific, defined purposes. We will see what all these card variants mean, in a moment. But if you are reading this article on this website, chances are that you already have some kind of a Payment Card in your wallet, or at least have somebody at home, who has one. And before we actually touch the central theme of this write-up (which is how to avoid falling victim to Card Frauds), it will be worth the while to have a little practical information about the amazing world of Payment Cards.
We will not be delving deep into the history of Payment Cards. It is sufficient to know that Payment cards as we know today have evolved over the last 50 years and more. The Magnetic Stripe card that we see today originated over 30 years ago. These cards, although they have basically remained the same in form & design, have added various features over the years to facilitate immediate recognition & identification, to ease usage, and to enhance security. Some of these features include the inclusion of Holograms, Special Embossed or Indent-Printed characters, Special anti-counterfeiting markings and micro-printing, Tamper-evident signature panels, inclusion of a unique Card Verification Code/ Value (CVC or CVV) indent printed on the signature-stripe of the card etc.
Most payment Cards are either issued on a MasterCard or a Visa platform by the Card Issuing Institutions, which in India are Banks. There are other proprietary card brands such as American Express, Diners Club, Discover and JCB which are issued in some regions. But MasterCard & Visa card products are the ones which are universally issued and accepted by Banks and financial institutions and this article will dwell mostly on those. In practice, you will never see a payment card with just a MasterCard or a Visa logo or brandmark. MasterCard & Visa are called “Card Associations” or “Schemes”, and they license Member Banks to issue cards with rigourous controls and standard specifications. Cards issued under this licensing regime by banks are therefore called bankcards.
There are over 20,000 or so member institutions worldwide, which issue either MasterCard or Visa branded cards .These cards are expected to give the holder unique privileges and rights to use the product seamlessly at any outlet, which is capable of accepting the same, across the globe. Most payment cards can be used both at Point-Of-Sale (POS) machines to pay for goods & services and at Automated Teller Machines (ATMs) to withdraw cash.
Therefore the elements & components of a payment card are very standard. These cards need to be universally recognized by Merchants, and should work well on the existing card acceptance infrastructure. The Cards acceptance infrastructure has a common architecture or backbone for all the countries across the world, but has varying levels of sophistication depending on how progressed that country is. Under the MasterCard or Visa licensing regime, a member Bank which issues a payment card is called an “Issuer”, and a member Bank which accepts a payment card through an ATM owned & operated by it or through a POS machine located at a Merchant recruited by it is called an “Acquirer”. A member bank can both be an Issuer and Acquirer of Cards, and often, Banks opt for issuance and acceptance of both MasterCard & Visa products. Such banks are therefore called dual issuers or acquirers.
Some of the things that MasterCard & Visa do are as follows:
1. Encourage Member Banks to issue various Payment Cards, under strict licensing & operating regimes, to suit various customer segments. They encourage Member Banks to recruit merchants & set-up cardholder interaction devices (EDC/ Card Swipe/ POS machines, ATMs, Proximity readers etc) where these cards can be used. Both issuance and acceptance of cards are commercial decisions of the Member banks, and Banks are free to offer the services & charge fees for features which they think will be most attractive to their target consumers – both cardholders and merchants.
2. Set-up the standards & systems for the reasonably secure & efficient networks which allows all these 20,000+ Member Banks to “talk” to , or have interface with each other for authorization and daily settlement process between them. Thus MasterCard & Visa help set-up the infrastructure for payment Card usage and administer the same.
3. Intervene in and resolve any disputes between the Member Banks as per the operating regulations. Refine the operating regulations to meet evolving challenges.
4. They also work hard to protect the integrity & value of their respective brand by controlling what their cards, systems and networks can be used for. They manage the risks associated with Payment Card transactions.
MasterCard & Visa do NOT do the following:
1. They do not issue any cards directly under their brand names (often advertisements give a wrong impression)
2. They do not encourage nor tolerate an environment where the usage of a card product by a consumer is disadvantaged in favour of other forms of payment (such as cash or cheque). Thus, MasterCard & Visa require Member Banks not to tolerate practices such as surcharging of Cardholders by Merchants, except wherever permitted by local laws (In India, for example, Petroleum Companies and Railways surcharge their cardholder customers since this is allowed by local regulations)
Types of Cards, by product features:
Credit Cards: These are “Buy Now- Pay Later” cards. A credit card is offered to a customer who has adequate and declared income resources and often a well-established credit standing with a financial institution. The Issuer is effectively giving an unsecured line of credit to the cardholder, and bearing the credit risk for the same. Therefore, often this is a fee-based product to partly offset the credit risk of the issuing bank. A fixed credit limit is assigned to the customer after careful profiling & scrutiny of his/her credentials & income, and perceived ability and willingness to repay. Depending on the transaction date and the billing date, the customer enjoys an interest-free credit period of between 20-50 days. The customers are also given the option of typically repaying back anything between 5% to 100% of their total monthly outstanding, and to roll-over or “revolve” the remainder to suit their financial convenience. Interests or “Annual Percent Rates” charged for such revolved amounts can be very high – often to the tune of about 36-45%. A credit card is typically used by a customer for high-ticket spends such as purchasing durables, travel & entertainment etc. Credit Cards can also be used in both Cardholder Present (CP) mode as in a shop, or in Cardholder-Not-Present (CNP) mode, which are Mail Order or Internet E-Commerce transactions. Comparatively, there can be more risks in the latter.
Most Credit Cards in India are signature based for use at the Point-Of-Sale, but in the near future many Indian Banks are likely to issue Chip based credit cards which are more secure and versatile. Most countries in Europe have already migrated to Chip + PIN based cards because their issuance & acceptance infrastructure is geared-up for such cards.
Debit Cards: These are “Buy Now- Pay Now” type of cards. The Cardholder has an account with the card issuing bank, and for all practical purposes, s/he is accessing their own account or funds to pay for a transaction at a merchant location or to access cash at an ATM. These are technically “deposit access” cards. Thus this card is purely used as a convenient payment mechanism rather than to draw on credit. Issuers in India and other developing countries have started seeing a huge upswing in the number of customers opting for debit cards because many customers in these countries are traditionally credit-averse, or because they are often unable to meet the credit approval norms of the Issuers. Thus they use the monies in their Bank accounts through these cards. Most Debit Cards are indent printed (not embossed), and many Issuers restrict their debit cards usage only to the scenario where the cardholder is present at the scene of transaction, such as on a POS machine or at an ATM.
Prepaid Cards: These cards are “Pay Now- Buy Later” Cards and the most common examples are “Gift Cards”, “Travel Cards” or “Payroll / Employee Benefits Cards” etc. These are aimed at particular segments of the market to migrate and wean customers away from cash.
Gift Cards are a niche market, and can come in attractive alternate shapes and forms.
Travel Currency Cards can be denominated in one or more currencies of the country where the customer is intending to travel, and Foreign Exchange allowance can be purchased in Indian Rupees and loaded onto the Card in terms of the designated Foreign Currency.
Payroll/ Employee Benefits Cards are for organizations to streamline their payroll functions & facilitate payouts of commission, allowances etc by avoiding writing & dispatching of cheques for recurring payments to agents/vendors etc. These cards help overcome logistical hurdles.
Risks associated with Payment cards:
Well, now that you have reached thus far within this write-up, let us address the main theme of the same. Please note that the risks dealt with here are from a Cardholder perspective.
Risks associated with Debit Cards:
Since issue of debit cards and prepaid cards involves interaction with and scrutiny by the Bank’s internal staff, often these will be issued to you across the counter within committed turn-around time after due verifications.
In case personalized debit cards are to be sent to the account-holder, banks often send debit cards and PIN-mailers separately through two different channels (One by courier & another by post) and with a time lag. Then also banks often require that the Debit cards be activated by cardholder for POS purchase by using them first at their own ATMs with the correct ATM PIN.
What the cardholder needs to remember is to change the PIN at the first usage, and never to write the PIN on the card or keep it along with the card. The PIN should be committed to memory. Some banks issue photo-cards, which affords an additional security.
Signature-based Debit Cards: MasterCard unembossed, and Visa Electron are the two common debit card types which are signature-based for acceptance at POS terminals. You should immediately sign the card on receipt therefore, and keep it at all times securely within your full control. In case the card goes missing, you should immediately get it blocked and replaced by calling-up your Bank’s Customer Service helpline, and following it up with a written complaint. Usually, but depending on the Bank’s policy your liability for any POS misuse of a lost/ stolen signature-based debit card ceases the moment you have reported the loss in writing.
“PIN-required-at-POS” Debit Cards: You may additionally consider the benefits of a PIN enabled Debit Card (MasterCard’s Maestro Debit Card in India is the one debit card that also requires usage of PIN at Point of Sale machine, apart from at ATMs). Please check with your Issuer, if they issue such a card. Sometimes customers can not remember their PINs at POS machines, or the POS machine may not have a PIN pad. These can be limiting factors, and according to some people, hinder convenience. It is an individual preference, which debit card type to opt for.
Some banks will give you the option of enabling your Debit Card for Cardholder-Not-Present transactions. Consider the pros and cons fully before you give the consent to activate this feature on your card.
Risks associated with Credit Cards:
A credit Card is an unsecured product, but that does not mean that Issuers will tolerate the Cardholder’s negligence or active / passive participation in allowing their misuse, should it ever happen. In case you ever fall prey to a fraud, immediately report the matter to the Bank in writing. Follow-up with a written complaint to the Law Enforcement authorities, if the Bank’s primary investigation indeed points out to a fraud/ misdemeanor. This way, you shall be demonstrating your good faith and sincere intent. In negligence or collusion on your part is ruled out, you will be immune from any losses.
Application Fraud: If you are applying for a Credit Card through a Direct Sales Executive of the Bank, please verify his/ her credentials and check the ID proof. Most people who get conned by unscrupulous elements simply sign a credit card application form, without filling-in the details; and also hand over the legitimate collaterals such as the pay-slip, address proof etc to an individual whose identity and credentials they have never checked.
Cases of identity theft are sometimes uncovered, where the bad guys use copies of these documents to apply for loans & credit cards of other banks, by mentioning their own address as the primary address for communication. If the Issuer does not properly scrutinize an application at multiple points, and fails to physically verify all the details, they may end up issuing a card in your name, but to the bad guys. When Credit Cards are thus fraudulently obtained, the fraudsters misuse these. When collection attempts fail, and Issuers come to the secondary address (which is most often your work address), you realize that you have been conned. Convincing the Issuers & banks of your innocence and keeping a clean credit reputation then becomes difficult.
To avoid such situations, you should always fill-in the form completely and accurately in your own handwriting. You should also sign and date it. Strike out what is not applicable, including portions in the form for add-on cards, if you are not applying for one. Always keep a photocopy of the entire set of documents submitted, including the numbered application form. Please be careful while responding to tele-verification calls and do not be tempted by the offers from agents to confirm the details of having applied for Card from another Bank, if the main bank whose card you apply for fails to give you one. Chances are that you may fall into a trap and the agent or his accomplice may pump-in an application in your name, for which you will become a passive participant in the Application Fraud by confirming all your details during tele-verification by the other Bank. Worse, this card may be diverted by them and misused – - to be billed to you.
Also, in case you are applying for a Card on the basis of surrogate documents (Existing Card and Statement), please remember to give the agent a photocopy of only the front of your Card, and not the backside of the card. By giving away the card’s backside copy, you are exposing the CVC2 / CVV2 value unnecessarily. This can invite Mail Order / Internet frauds on your existing card. More about those types of frauds, later.
Frauds during the lifetime of the Card:
Identity Theft & Interception of Cards: Frauds of this nature include interception/ diversion and account takeover. Criminals may intercept a new or renewed plastic, which is being couriered to you. Fraudsters can use your sensitive personal details available with them to divert the card to another address by requesting an address change, and “take over” your card account by impersonation or identity theft. Such cards are misused soon after criminals lay their hand on them. Always be on the lookout for the delivery schedule or delivery status of a new or a renewed card plastic while it is being dispatched to you. And never divulge your intimate personal details that can be used by a third party for account validation, which can lead to their impersonating your identity to a financial institution. Be wary of disclosing your Card details and personal details to a tele-caller, unless YOU made the call to a known customer service number of the bank.
Additional precautions: As with any payment card, keep all your Credit Cards securely. Do not carry too many cards in your wallet. PINs should best be changed from the issued default ones and memorized. But if you must retain them, keep Cards & PINs separately. Always have the numbers of your 24-Hour Customer Service Centre handy to call in an emergency. Note down your card numbers and these phone numbers separately on a sheet of paper, which should be securely kept but easily retrievable in an emergency. Do not hand over your cards to anybody for getting them “upgraded” or “replaced”. Always destroy old/ expired cards by cutting them through the magnetic stripe, multiple times. Always mark the dates when banks are due send renewed cards to you, and keep an eye open. In case of delays, call-up customer service and ask. You should ideally sign your card with an indelible pen (for example, a fine-tip permanent marker). Opt for a photo-card whenever you can, to reduce the risk of your stolen card being misused by a different-looking imposter.
Skimming Fraud: The magnetic stripe on the back of your card has all information about your card encoded on it. Sometimes, when the card is handed over, or gets out of sight of the cardholder, fraudsters will use small pager-size devices called “skimmers” or readers/writers to copy the information on the magstripe of the card. This information can be then put on other cards having a magnetic stripe. These cards then become and behave like an exact replica or clone of the cardholder’s existing card and these cloned or “skimmed” counterfeit cards can be used by fraudsters at conniving/ ignorant merchants. Unless the original cardholders can conclusively establish their own absence at those misuse locations, the genuine cardholders could be in a spot.
In case you happen to be a victim of such frauds, of course your Bank and Law Enforcement officers will closely scrutinize all electronic & physical evidence. But ultimately you will need to work very hard to clear your name and to stave off any financial liabilities.
To avoid being the victim of skimming fraud, never hand over your card where you will lose the sight of it, for example at a restaurant or at a petrol-pump. Do not leave your wallet or cards in swimming-pool changing rooms or gymnasium lockers. Even when handing over your card at the cashier’s counter of a shop, ensure that the cashier does not swipe it at any other device before or after swiping the same at the legitimate Electronic Data Capture (EDC) or POS machine. Please do not be excessively alarmed, though. Instances of skimming domestically are extremely rare. Some of the countries facing illegal skimming activities include Taiwan, Malaysia, Indonesia, Philippines, Australia, and Sri Lanka. But Law Enforcement authorities in those countries and elsewhere are continuously working with member banks to identify and weed out the activity. The advent of chip-based cards is expected to put an end to skimming, as we know today.
Mail Order/ Internet Fraud: With the advent of E-Commerce Merchants, fraudsters started exploiting weak links in the way such businesses operate. The biggest advantage that the fraudsters had was that they could now commit the frauds remotely and anonymously. After all, most E-Commerce website still require just the 3 basic inputs: Card Number, Expiration Date and Card Security Code. Thus fraudsters started obtaining these 3 details, and started ordering through the Internet, drop-shipped merchandise to be picked-up at a convenient time. Most of these items were with a re-sale value, such as Laptop PCs, Electronics items, Mobile Phones. Some misuse was for services that give instant gratification such as prepaid Mobile airtime purchase, Online Adult Content, Online Gaming, Downloadable Computer Software etc
With mail order or catalogue merchants/ Internet merchants eager to fulfill orders without doing any due diligence or order analysis, for some time the fraudsters had a gala time. But as losses started mounting, E-commerce and Catalogue merchants realized that they were bleeding. Cardholders who had their cards misused found that “wrong” charges were billed to their accounts. As the extent of Card Information misuse on the Internet (CNP Card Account misuse) became widespread, it was soon realized that though there was a lot of “Third-party Fraud”, there was also the “Buy-and-Deny” or “First Party Fraud”.
Even in India, airlines ticketing E-fraud hit headlines in the recent past, where E-Tickets worth Crores of rupees were booked by fraudsters using stolen card number information and these were sold to tempted or unwary customers for cash at 50-60% discount. Often, even as the kingpins or main perpetrators evaded arrest, the bottom-rung operatives and passengers using those tickets were nabbed. As an industry initiative, and with the active involvement of Mumbai Police Crime Branch and the Cyber Crimes Cell, most Airlines merchants in India are now tightening the passenger checks to ascertain the legitimacy of the ticket booking. “Sight Card” requirement at the time of getting boarding pass, and ID/ Address checks of the person who made the booking, apart from reservation analysis are some of the tactics and measures being used by the Industry to counter this menace. These best practices are being rolled-out across major air-travel origins & destinations across India. Banks have started challenging customers suspected of being involved with “First-Party” frauds.
As available in other advanced markets, to effectively and accurately authenticate Internet transactions, some Card Issuing banks in India have started rolling out SecureCode & Verified-by-Visa (VbV) facility for their cardholders, and Internet Merchants have started participating in the same. This technology uses a standard protocol called Triple Data Encryption Standard (3DES), and though it works in exactly the same way, MasterCard call it SecureCode and Visa call it Verified-by-Visa or VbV. We will look at the same in a moment.
Relevance of CVC or CVV in Internet transactions: Many people today ask the relevance of banks’ printing the CVC or CVV code on the reverse of the Card, especially because there are so may internet frauds that happen nevertheless. But when it was introduced, the utility of CVC or CVV value was just to ascertain that a cardholder was actually in possession of a specific card. This value was supposed to be used as a verification step during telephonic interaction with the bank’s personnel. It is another thing that CVV or CVC values were introduced well before the era of E-Commerce. And regardless of its actual potential to stop card misuse on the Internet, the same value started getting used as an additional card account verification detail even for Internet transactions.
What is SecureCode and VbV Authentication?
SecureCode & VbV program involves a two-factor authentication for cardholders who have registered for the same. Apart from the Card Number, Expiry Date and Card Security Code, the Cardholder is shown an inline window, which displays a Security Challenge phrase set by them, and they have to also key-in their PassCode to answer the same. This means the Cardholder authenticates positive involvement in the transaction by supplying information that they and they alone know. This is called a two-factor authentication (“What you have and what you know”). This is akin to using an ATM card with the PIN. Only the genuine holder would have access to both the Card details and the correct PassCode. SecureCode & VbV authentication is also seamlessly integrated in the payment page. A SecureCode or VbV window also gives a confidence to the cardholder that s/he is dealing with a legitimate e-commerce merchant website, and not a spoofed one.
It is understood that presently HSBC, HDFC Bank, ICICI Bank & UTI Bank are allowing some of their cardholders to register for this facility. E-Commerce Merchants in India are also gradually moving towards the same.
To conclude, one may say that eternal vigilance and precaution is the way to stay on top of the card fraud situation. Diligence will go a long way towards ensuring a cardholder’s safety and well being while dealing with both physical and E-Commerce merchants. Banks, Card Associations and Law Enforcement are doing all they can. You as an individual cardholder can also help.
Some of the measures that you can take to prevent becoming victims to E-Commerce related frauds are as follows:
1. Never, without reason share your Card Number, Expiry and Security Code/ PIN with any entity – even friends, colleagues and family.
2. Never transmit these details in an unencrypted medium such as the Email.
3. Destroy copies of your POS charge-slips, unless the card number is masked.
4. Verify the legitimacy of the website you are dealing with. Establish their credentials and always deal with well-known, reputed merchants.
5. If a deal at an unknown Internet/ E-Commerce Merchant seems too good to be true, often it isn’t. Never register at any website with the same E-mail ID as your username & Password that you use for mainstream banking transactions.
6. Be aware of the dangers of realistic looking, spoofed websites. Have a good anti-phishing software, apart from anti-virus and firewall protection installed on your PC. Have a good spyware blocker. Keep your browser and security software always updated. Always double-check for the authenticity of any transactional website. Never click on any embedded links in an E-mail, nor confirm any account/ card details on the internet if you receive a “Warning” email threatening you with de-activation of your privileges.
7. Always keep an eye on your card statements and register for account alerts using E-mail or SMS, if your Issuer has this facility. Report to your Bank if any irregularity is noticed or suspected. Promptly report to your Issuer any transactions that you do not recognize.
8. You may reserve a special low-limit credit card for all your internet transactions.
9. It is also a good idea to use limited validity, low-limit “Virtual Cards” that some Issuers allow you to generate on the fly, and which expire in 24-72 hours. But these should not be obviously used at merchants who have “sight card” requirement before service can be rendered.
10. Register for SecureCode & Verified-by-Visa facility your Cards used for internet transactions, and use this facility to authenticate your E-Commerce transactions.
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THE END
Note: All data believed to be accurate as at the time of writing, namely 20 March 2007. Copyrights and other privileges for all the products, institutions & brand names mentioned herein rest with the respective legal rights holders and have been mentioned here for the purpose of depiction & to draw reference only. Product features described may vary by location and by Institution, and the write-up is meant as a general guide for the un-initiated. Readers are requested to accurately ascertain the currently applicable and available product features with the respective Institutions. This is not an endorsement for any particular Institution or Product/Service.
Though this article has been voluntarily written on an honorary, non-commercial basis by Niranjan Upadhye & submitted to the Cyber Crime Cell, Mumbai Police at their request, Niranjan Upadhye asserts his moral right to be identified as the author of this original work.
http://en.wikipedia.org/wiki/Credit_card
Controversy
There is some controversy about credit card usage in recent years. Credit card debt has soared, particularly among young people. Since the late 1990s, lawmakers, consumer advocacy groups, college officials and other higher education affiliates have become increasingly concerned about the rising use of credit cards among college students. The major credit card companies have been accused of targeting a younger audience, in particular college students, many of whom are already in debt with college tuition fees and college loans and who typically are less experienced at managing their own finances. A recent study by United College Marketing Services has shown that student credit lines have increased to over $6,000. Credit card usage has tripled since 2001 amongst teenagers as well. Since eighteen year-olds in many countries and most U.S. states are eligible for a card without parental consent or employment, the likelihood of increased balances, unwise use of credit and damaged credit scores increases.
A 2006 documentary film titled Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders deals with this subject in detail [5].
According to Larry Chiang of United College Marketing Services, an example of a credit card class action was where issuers were "rolling back" posting times to extract more late fees. The due dates were "rolled back" from 1pm to 10am because mail was delivered in the afternoon so due dates were actually rolled back to charge more late fees. The following banks are listed (with the amounts penalized) in this one particular class action.
Another controversial area is the universal default feature of many North American credit card contracts. When a cardholder is late paying a particular credit card issuer, that card's interest rate can be raised, often considerably. Universal default allows creditors to periodically check cardholder's credit portfolio to view trade. Allowing the institution to decrease the credit limit or increase rates on cardholder's who may be late with another credit card issuer. Being late on one credit card will potentially affect all the cardholder's credit cards.
Another controversial area is the trailing interest issue. Trailing interest is the practice of charging interest on the entire bill no matter what percentage of it is paid. U.S Senator Carl Levin raised the issue at a U.S Senate Hearing of the woes of millions of Americans who are slaves to hidden fees, compounding interest and cryptic terms. Their woes were heard in a Senate Permanent Subcommittee on Investigations hearing which was chaired by Senator Levin who said that he intends to keep the spotlight on credit card companies and that legislative action may be necessary to purge the industry.[3]
In the United States, some have called for Congress to enact additional regulations on the industry; to expand the disclosure box clearly disclosing rate hikes, use plain language, incorporate balance payoff disclosures, and also to outlaw universal default. Opponents of such regulation argue that customers must become more proactive and self-responsible in evaluating and neogotiating terms with credit offerers. The nation's influential top three bank card issuers, who are among the top fifty corporate contributors to political campaigns, successfully opposed it.
[edit] Minimum payments
In the UK, there has recently been increasing concern about the minimum payments required on outstanding credit card balances. Until the mid-1990s the required minimum monthly payment was generally 5% of the outstanding balance, but competition in the last 15 years to attract customers has led to this figure being eroded on the premise that the minimum monthly payment to service a debt will be lower. Typically, credit card companies now only require a monthly minimum payment of between 2% and 3% of the outstanding balance, or a fixed cash fee, whichever is the greater. For example, on a debt of £1,000, the card holder can expect to pay back only £20 - £30 per month.
Unfortunately, some people are not aware of how long it can take to repay a debt when only paying the minimum each month. An example of this: by paying 2.5% of the debt each month, while accruing interest at 14% (in line with modern credit card interest rates), it can take over 14 years to pay back an original debt of £1,000, and roughly £10,500 will have been paid back.
It has recently been suggested that credit card companies include a warning on their statements discouraging customers from paying only the minimum, however few companies have so far acted upon this. Companies which do include a warning tend not to inform customers how long full repayment will take, i.e. they discourage users from making just minimum payments but do not explain why. Less financially savvy customers may ignore these empty warnings as a result.
Starting in 2006, most US credit card companies regulated by the Office of the Comptroller of the Currency have been required to increase customers' minimum payments to cover at least the interest and late fees from the prior statement plus 1% of the outstanding balance. The reason is to avoid a negative amortization situation which may result when the previous 3% minimum was enforced. Negative amortization is when the payment to the creditor fails to cover the amount of interest charged during that period. This causes the consumers credit card balance to continually increase.
http://www.cardwatch.org.uk/media.asp?sectionid=4&pageid=109
http://www.cardwatch.org.uk/spot_and_stop/flash/toptips.htm?display=flash[training]
Plastic fraud loss on UK-issued cards 2005/2006:
| Type of fraud | 2005 | 2006 | +/- % |
| Counterfeit | £ 96.8m | £ 99.6m | + 3% |
| Lost/stolen | £ 89.0m | £ 68.4m | - 23% |
| Mail non-receipt | £ 40.0m | £ 15.4m | - 62% |
| Card-not-present (CNP) | £ 183.2m | £ 183.2m | + 16% |
| Card ID theft | £ 30.5m | £ 31.9m | + 5% |
| Total | £ 439.4m | £ 428.0m | - 3% |
The financial costs of card fraud on UK-issued cards over the past ten years are as follows:
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| Total loss | Lost/Stolen | Counterfeit | Card-not-present | Mail non-receipt | Identity theft |
| 2006 | £ 428.0m | £ 68.4m | £ 99.6m | £ 212.6m | £ 15.4m | £31.9m |
| 2005 | £ 439.4m | £ 89.0m | £ 96.8m | £ 183.2m | £ 40.0m | £ 30.5m |
| 2004 | £ 504.8m | £ 114.4m | £ 129.7m | £ 150.8m | £ 72.9m | £ 36.9m |
| 2003 | £ 420.4m | £ 112.4m | £ 110.6m | £ 122.1m | £ 45.1m | £ 30.2m |
| 2002 | £ 424.6m | £ 108.3m | £ 148.5m | £ 110.1m | £ 37.1m | £ 20.6m |
| 2001 | £ 411.5m | £ 114.0m | £ 160.4m | £ 95.7m | £ 26.8m | £ 14.6m |
| 2000 | £ 317.0m | £ 101.9m | £ 107.1m | £ 72.9m | £ 17.7m | £ 17.4m |
| 1999 | £188.4m | £ 79.7m | £ 50.3m | £ 29.3m | £ 14.6m | £ 14.4m |
| 1998 | £ 135.0m | £ 65.8m | £ 26.8m | £ 13.6m | £ 12.0m | £ 16.8m |
| 1997 | £122.0m | £ 66.2m | £ 20.3m | £ 10.0m | £ 12.5m | £ 13.1m |
| 1996 | £ 97.1m | £ 60.0m | £ 13.3m | £ 6.5m | £ 10.0m | £ 7.2m |
| 1995 | £ 83.3m | £ 60.1m | £ 7.7m | £ 4.6m | £ 9.1m | £ 1.8m |
For other fraud-related media enquiries please e-mail press@apacs.org.uk or telephone:
Mark Bowerman on 020 7711 6251
Jemma Smith on 020 7711 6340
Sandra Quinn on 020 7711 6234
Consumer forum awards Rs 20 lakh against Standard Chartered Bank
Our Bureau
| `Sending thugs to the house of borrowers and threatening them was a despicable act.' |
Chennai , May 13
THE State Consumer Disputes Redressal Commission, Chennai, has asked Standard Chartered Bank to pay Rs 20 lakh to a couple for deficiency of service. The bank has been given two months to pay the compensation to the complainants, Capt A. Ranganathan and his wife, Mrs Lakshmi Ranganathan.
In its order, the commission comprising Mr Justice A. Raman, President, and Mrs R. Vanaroja and Mr Pon Gunasekaran, members, said it found the claim of Rs 20 lakh as compensation by the complainants "quite reasonable considering the nature of insult and onslaught committed by the opposite party to the self-respect, dignity and honour of the complainants."
The commission further said that granting of such huge compensation alone would be an eye opener to such a banking institution.
According to the commission, Capt A. Ranganathan maintains different accounts with the bank and Mrs Lakshmi Ranganathan had availed herself of credit card facility from the bank. Capt Ranganathan had given standing instructions for payment of credit card dues of his wife's card from his accounts and also to replenish funds regularly on the use of card by Mrs Ranganathan.
According to the commission's order, as on December 31, 1996 there was no amount due and payable by the complainants. However, Mrs Ranganathan received a telegram stating that a cheque for Rs 27,022.35 had been returned for insufficient funds.
The complainants had never issued any such cheque nor was there any need to do so. Even before the complainants could verify the demand, the opposite party sent hirelings and thugs in the name of `Bill Collector', who visited the complainants' house and demanded payment and behaved in an "undignified and threatening manner." It observed that to employ thugs and hirelings and send them to the house of the borrowers and threaten them was a despicable act. The commission criticised the bank for adopting such a step and said "it is high time the Reserve Bank of India takes strong note of it and come down severely upon such banks." "We would even suggest that they do not hesitate to cancel the licence of such bank," the commission said.
Some relief on the card
Diljeet Titus
| The ambit of protection for a customer ranges from receiving unsolicited telephone calls for marketing of products to use of coercion and threat by credit-card issuers or their agents to collect debts/dues. |
Following the Reserve Bank of India's notification of the Banking Ombudsman Scheme, 2006, a credit-card user can apply to the Ombudsman concerned for redress of grievances besides moving a consumer or a regular court.
However, to properly pursue claims at any of these forums, it is important for a credit-card user to know his rights and obligations, and have an understanding of the RBI guidelines on credit-card operations, the Banking Ombudsman Scheme, the Consumer Protection Act, 1986 and some important rulings of consumer courts.
RBI Guidelines
To regulate credit/ATM/debit card businesses, the RBI had notified guidelines for the issuers. They are based on the recommendations of the RBI-constituted `Working Group on Regulatory Mechanism for Cards' to look into credit card-related complaints and suggest regulatory measures to encourage growth of cards in a safe, secure and efficient manner.
The salient features of the Guidelines, which took effect from November 30, 2005, are:
All credit-card issuers should provide Most Important Terms and Conditions (MITCs) to customers/prospective customers.
MITCs should include information such as joining fee, annual membership fee, cash advance fee, service charges for certain transactions, interest-free grace period (illustrated with examples), finance charges for revolving credit and cash advances, overdue interest charges and charges in case of default.
MITCs should be in Arial-12 points and not in fonts that are difficult to read with naked eyes.
Card issuers should quote annualised percentage rate on card products (separately for retail purchase and cash advance).
Card issuers should not provide unsolicited cards, loans and any other credit facilities or unilaterally increase credit limits.
Card-issuing banks/non-banking financial companies (NBFCs) should maintain "Do Not Call Registries" containing phone numbers of customers and non-customers who have informed them that they do not wish to receive unsolicited calls/SMS for marketing of credit card products.
Card-issuing banks/NBFCs would be responsible, as the principal, for all acts of omission or commission of their agents (direct sales agents/direct marketing agents and recovery agents).
Card issuers should follow the RBI's Fair Practice Code for Lenders and also the Indian Banks Association's Code for Collection of Dues and Repossession of Security.
By bringing about clarity in contractual relationship between credit-card issuers and users, the Guidelines protect customers/prospective customers from aggressive companies and their sales and marketing agents. The ambit of protection for a customer ranges from receiving unsolicited telephone calls for marketing of products to use of coercion and threat by credit-card issuers or their agents to collect debts/dues.
Ombudsman Scheme
The Guidelines further provide that a customer who fails to get a satisfactory response from a card issuer within 30 days of lodging of complaint may approach the Banking Ombudsman concerned for redress before expiry of one year from the date of receipt of reply from the bank or 13 months from the date of representation.
Currently, there are 15 Banking Ombudsmen who try to resolve complaints through a process of conciliation or mediation.
The modified scheme even allows a customer (including a Non-Resident Indian) or his authorised representative (other than an advocate) to file a complaint online on www.bankingombudsman.rbi.org or through e-mail for "non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on ATM/debit card operations or credit card operations."
Although the scheme provides a format, it is not mandatory to use it to lodge a complaint which may be filed on a plain paper incorporating information necessary for resolving grievances. The Office of Ombudsman does not charge any fee for resolving complaints.
As for applicability of the decision of Ombudsman, it is open to a complainant to either accept the award in full or reject it.
Banks cannot reject the award but may, with the sanction of chairperson, or in his absence the managing director or the executive director or the chief executive officer, approach the appellate authority against the decision of an Ombudsman. A dissatisfied complainant can also approach the designated appellate authority — a RBI Deputy Governor.
Consumer Courts
For redress of grievances under the Consumer Protection Act, a credit-card holder may approach a district forum if the value of goods and services provided is less than Rs 20 lakh; the State Commission if the value is more than Rs 20 lakh but less than Rs 1 crore; and the National Commission if the value exceeds Rs 1 crore.
The major advantage of the consumer court is that it allows a card user to file a complaint with the Consumer Forum of the district of which he is a resident provided the cause of action arose within the jurisdiction of that District Forum.
The law also requires that a complaint be filed within two years from the date on which the cause of action arose in a District Forum of appropriate jurisdiction after payment of a nominal fee depending upon the value of disputed goods and services.
(The author is Senior Partner, Titus & Co., Advocates, and can be contacted at dtitus@titus-india.com.)
http://www.bcsalliance.com/x_creditcardtricks1.html [ full info on credit cards ]
| Tactics Credit Card Companies Use to Get You to Pay More
Although the credit card industry earns more than one trillion every year, they aren't satisfied with that, and have adopted dubious tactics to further fatten their wallets. Late and over-the-limit fees now account for more than half of their revenues, so they like to encourage or trick customers into paying some sort of penalty fee. And they are now only getting away with it, but they keep raising their fees up and up -- just a few years ago a penalty fee was about $10. Now the average is $29.00. Consumer groups estimate that soon these fees will average $59.00.
Late and over-the-limit fees are not the only methods companies use to rake in trillions each year. There are also the credit insurance programs, universal default policies, dishonest marketing campaigns and other stupid card tricks. Many of the major issuers -- First USA (now Chase), Chase, Capital One, Providian (now owned by Washington Mutual), Citibank -- have been sued over allegations of unfair billing practices and accused of blatantly using tactics to cheat customers out of money. Some of these tactics are outlined below.
Not posting your payment on the day it's received -- Federal law requires credit card companies to post your payment on the date it is received. If they fail to do so, they cannot assess you late charges or added finance charges. Still, a common tactic most card issuers use is to post only those payments received by 9:00 a.m. or 3:00 p.m. on a given date. Payments received at 9:01 a.m. are posted the next day despite the fact that all the major card issuers have payment processing centers that operate 24-hours a day, seven days a week. Best way to fight back: Send in your payment at least 10 days before the due date. If you can't do that for one reason or another, arrange to make your payments electronically by signing up at your credit card issuer's website so you can quickly zap a payment to them and they can't claim that they didn't receive your mailed payment until after the due date. It is interesting to note that almost all of the major credit card banks used to allow customers to quickly zap a payment to them via Paypal.com free of charge. Of course, this must have put a big dent in their late fee revenue so some of them stopped allowing this (Providian and First USA to name two).
Tricking you in to paying late -- Federal law requires that credit card issuers mail you your statement at least two weeks before the due date, so companies have to resort to other tactics to get you to pay late. You know that your credit card payment is due on the 25th of the month, or do you? Your issuer might suddenly change it to the 20th of each month to try and get you to mail it in late. If it's received late, they will slap you with a $39.00 late fee. If it's late two or more times, they can legally increase your interest rate dramatically, to as much as 29%. At various times, several credit card issuers have even resorted to not mailing out statements at all to encourage customers to pay late under the theory that "it is a courtesy that we mail statements out, not a requirement." [First USA actually used that as an excuse once and lost many customers as a result.]. Best way to fight back: Always open your monthly statement immediately upon receipt and check the due date. Don't be surprised if it has suddenly moved up five days and you received your statement "late". You might have to immediately write a check and get it in the mail that day to allow at least seven days for it to get to them before the due date. You don't want it to arrive at 9:01 on the due date do you? If it does, you will be assessed a late fee. |
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| Penalizing you for carrying a big balance -- If you carry a high balance on your credit card month-to-month, don't be surprised if you one day notice a small paragraph on your monthly statement that informs you your interest rate is going to increase from 7% to 28% next month. What the credit card company doesn't tell you when you sign up for the card with the low interest rate is that they almost always raise the interest rate dramatically on people who never pay down a high balance on the credit card or carry big balances with other credit card companies. It doesn't matter to them that you have always paid your bills on time and are never late. You can be a customer of theirs for 20 years and never be late or miss a single payment, but one day they will decide that you are no longer a good customer and raise your rate to 28%. [Citibank is notorious for doing this. Every time I see one of their ads in a magazine or TV about how much they love and respect their customers, I want to throw up.]
Credit Insurance -- This scam is used almost universally by the big credit card companies because it is such a cash cow. Every single consumer group and financial counselor has nothing good to say about this type of insurance and all recommend that you don't sign up for it. You don't need this insurance and, even if you tried to take advantage of it, you probably couldn't. This is one of the greatest scams the credit card industry ever invented. For X amount each month, they promise to pay off your balance if you become unemployed or ill. But, actually, if you read the terms very carefully, you will realize that the odds of you ever getting a dime out of them are tremendously high. Sometimes credit card companies don't even bother to get you to enroll in this program -- they just sign you up without your permission and start charging you for it -- and some of them get sued for it. Credit card companies usually are forced to pay large judgments for this type of scam. In particular, Providian was forced to pay the largest judgment ever when it enrolled customers in credit insurance programs without their knowledge. [More than 20 people sent us emails telling us that First USA contacted them in the summer of 2004 as many as ten times a day trying to sell them credit insurance and refused to stop calling. Two people claimed that they had to have their telephone numbers changed because First USA told them it would take three months to take their telephone numbers off of their telemarketing list.]
Universal default -- When you signed up for your credit card, there was a provision in the card agreement that informed you in legalese that, if you missed or were late with a single payment to any other creditor, be it another credit card company, your mortgage or auto loan lender, or any type of payment whatsoever, they reserved the right to raise your interest rate to 28%. It doesn't matter if the late payment notation is an error or evidence that the person is struggling with debt, they will raise your rate. It doesn't make any sense to do this, particularly to someone who is struggling with debt, because it often drives them into default or bankruptcy, but the credit card industry is so greedy and dishonest and amoral that they simply don't care. Best way to fight back: Don't carry a big balance on a credit card and always pay it off each month. That way, it doesn't matter if the interest rate is 3% or 300%.
Rattling the Kettle Manhanttan(SCB) Cradit Card
Use credit cards with care; the risks are yours June 05, 2007 Why do you use a credit card?" Simple enough question, most would agree, and one to which the usual platitudes spring to mind: convenience of cashless transactions, facility to buy now and pay later with the provision to spread the cost of spending over a number of months and so on. However, Birmingham-based criminal lawyer Gurinder Singh Mandla has a slightly differing perspective. "The greatest advantage a credit card provides is that of purchase protection against a fraudulent merchant for a product or service purchased of questionable quality," says the 42-year-old smart spender. Mandla furnishes proof to boot. Last year, he had purchased a table from a local market in Birmingham for �800. Once home, he realised that one of the legs of the table was chipped; this compromised its stability. What really infuriated Mandla was the insouciance and indifference of the retailer. Not only did he refuse to repair or replace the table, he did not even reimburse the �800. Mandla channelled his frustration to fire a complaint to Visa The devil is always in the fine print, so read the terms and conditions of any credit card issued to check whether they offer any protection, or guarantee against unsatisfactory purchases. Give credit where it's due True to his expectation, Visa reimbursed the entire amount to him, and since no one came to claim the table ultimately, he got to keep the table as well! This is not the only case he relates. On a recent trip to India when Jet Airways [Get Quote] cancelled his flight to Delhi, Mandla reported the matter to Visa, emphasising the urgency of his visit. Visa summarily bought him a fresh ticket at no added cost. Mandla insists his friends have had similar success stories about MasterCard. l Conduct a thorough check of any product being purchased on the card, especially if it's a net transaction, since it's not always possible to physically analyse the product in question. l In case of a dispute, sue the retailer and not the bank, unless there is proof that the bank has offered a guarantee of a quality purchase. l Develop a relationship with the bank that is your credit card issuer by transacting regularly. l Rely on the good offices of the banks in case of a dispute, but if the bank refuses to arbitrate, get it on record as it will help procure an easy and quick judgment in a consumer court. Horses for courses MasterCard admitted to having detailed rules and procedures to cover 'chargeback' - situations where the cardholder contacts her issuer to dispute a transaction or service that she has been billed for. It insisted that all global rules on chargeback and arbitration that are applicable worldwide are applicable in India as well. But, in all such situations, the onus is on the acquirer (credit card holder) and, eventually, the merchant, to prove that the transaction was processed in accordance with the MasterCard rules. While MasterCard advises its cardholding members to conduct all transactions after due diligence on merchants and their merchandise before making any purchase, it unequivocally abrogates any responsibility to arbitrate a dispute or settle any claim between the card members and the merchant. American Express, too, observes a strict no-intervention policy in case of a dispute between the merchant and the user, although it does offer purchase protection to the consumer in the event of theft or damage to the card. With so many contrasting points of view regarding arbitration of disputes and claims between a credit card user and the merchants, the law is not just ambiguous, but absent in most cases. Even the Reserve Bank of India [Get Quote] guidelines on credit card operations, the Banking Ombudsman Scheme, and the Consumer Protection Act, 1986, only relate to cases between credit card issuers (banks) and users (cardholders), and not between the users and the merchants. Line of credit In India, in case of a dispute, the issuing bank raises a chargeback to the merchant and reimburses the money back to the customer. But, there are no specific conditions under which a customer can apply. The issue is resolved or taken up on a case-by-case basis. "As a matter of policy, the bank does not offer any purchase protection to the customer regarding the quality of goods or services purchased," claims Khandelwal. The Citibank spokesperson parroted a similar line: "In the event of a dispute or claim, card members need to resolve it directly with the merchant. Only, if we have a business relationship with the concerned merchant establishment, we try to, on a best effort basis, help customers in the manner possible." But that remains more an exception than a rule. The best way to make a bank sit up and take notice is to develop a long-term relationship with it. "The problem in India is that there are no stringent laws on consumer rights. But, if you have fixed deposits, or a savings or demat account, or a housing loan with the same bank that is also your credit card issuer, chances are the bank may intervene in disputed cases since your business will carry some worth," advises Vijay S. Mehta, chief consultant, Credit Card & Management Consultancy. If that too is not possible, then "the best bet remains the consumer court or a regular court of appropriate jurisdiction, but even though the Consumer Protection Act stipulates that consumer courts settle all cases within 90 days, it usually takes up to a year, given the previous backlog", adds Anand Patwardhan, chairman, Consumer Guidance Society of India. Since the test of the pudding is in the taste, conduct a rigorous check before purchasing any product or service on your credit card. In a scenario where no law is the norm, discretion is the better part of valour.
Sat 9 Dec 2006 Citibank Sucks Posted by Rattling the Kettle under Citibank Sucks , Student Loans , Citibank , Banking , Finance I use Citibank for just about all my financial needs. My mortgage (on an apartment back in New York) is with Citi. My home equity line (also on the NY apartment) is with Citi. My checking an savings accounts are with Citi. My brokerage account used to be with Citi, but I moved to Schwab last year for the lower trading fees. And, of course, my student loans are with Citi. Originally, only my law school loans (all $70,000 or so of them) were with Citi since my undergraduate loans (some $25,000 of those) were “direct” loans, but a few years ago I consolidated the direct loans over to Citi and locked in an historically low rate of 3.375% for 30 years (give me a couple of high inflation years and that fixed monthly payment will look really nice). I wish I hadn’t. I have never had a problem with any part of Citibank outside of their student loan department. With student loans, however, it’s been one screw-up after another. Two of my loans were not eligible for consolidation, and so their interest rates stayed variable. As rates started climbing on those loans, I started sending in the occasional extra principal payment. Without fail, Citi would screw up the extra payment. They’d apply it to the next scheduled payment of interest instead of extra principal. They’d apply it to a loan other than the one I specified. If there was a way to screw up payment instructions, they found it. It got to the point where I was sending the payments in together with an instruction letter whose key words (”additional principal” “loan #25″, and so forth) were typed in 20 point font and all caps. Didn’t help. Those idiots still screwed it up. Yesterday, I received my year-end bonus and decided it was time to pay off the rest of the non-consolidation loans (I had about $4,000 remaining due on a loan with 7.25% interest). I call. The customer service rep gives me the payoff amount on the loan. I tell her I’d like to pay it off. She asks for my checking account routing and account numbers. I ask what my monthly payment will be now that this loan is repaid. She gives me a number that makes sense (my current monthly payment less the part that goes to this loan). I thank her. She thanks me back, and tell me that the payment will post by midnight that night. Easy. The whole thing took 5 minutes and I hung up with my faith in Citibank renewed. Alas, it was not meant to be. I logged in to my student loan account this afternoon to see that, wait, you’ll never guess: Citibank misapplied the payment. Despite there being absolutely no confusion on the phone, and despite the specific discussion of a full pay-off of one particular loan, my payment was applied across all of my loans on a pro rata basis, meaning about $700 went to the loan with the 7.25% interest rate, and the other $3,300 or so went to the consolidation loans with the 3.375% interest rate. Someone at Citi probably thought that MUST have been what I wanted. Makes sense, after all. Why would I want to pay off the higher rate loan first, when there’s a perfectly good loan going unpaid with its interest below the rate of inflation? Moral of the story? Don’t get your student loans through Citibank. Their incompetence is just appalling. 15 Responses to “Citibank Sucks” And just think, all the money they’re paying for outsourcing their customer service to Elbonia is going to the Mets for naming rights for the new stadium. So you’re good like that. Sallie Mae has great customer service — and for what I’m paying in interest, they had just better. Unfortunately, this is good old fashioned American customer service; they haven’t outsourced the call center for student loans. Maybe they should. One of the drawbacks to having historically low unemployment rates for so long is that companies end up having to scrape the bottom of the employment barrel to find people to man their phones. I heard that the MTA is negotiating with Citi for naming right fees for the new stadium’s subway station on the 7 line. Criminy, I could fill a BOOK with how much I hate Citibank. I got my first credit card through them when I was 19 and just a year ago cancelled it forever because of their incompetency. Twice….TWICE they just sent me a Mastercard out of the blue and told me I was being switched to a new account. It was nearly impossible for me to get someone to understand that I didn’t want this. Even a manager kept telling me it was better….better for WHO??? Well, them. Getting my old account back was a logistical nightmare. I. HATE. THEM yikes……glad i am not the only one There *is* one way that keeping the card would have been better for you. A big factor in determining your “credit score” is the age of your longest-standing credit account. The longer the oldest account has been open (provided it’s in good standing), the better your score. I found that out the hard way when I canceled the last of my college-era cards last year.
Oops, I hoping I haven’t made a mistake opening a new credit card account with Citi. My wife and I have been using a Discover card with the Cashback bonus award for years. We put everything we can on it every month and then pay it off on time…every time. Once a year we cash out the bonus for couple hundred bucks. Discover hates us but won’t cancel our account because of the nice fees they earn off of the merchants. Anyway, there’s many times we come across a store that doesn’t accept Discover. Sometimes, it for something expensive, like appliances where we would earn a decent amount of cash back. So I got the bright idea of opening a Citi Mastercard account that has a similar cashback program (no fees, 2% cash on gas, groceries, utilities, etc…1% cash on everything else.) This would be our backup card when Discover is not accepted. Seemed like a good idea at the time. I hope this doesn’t come back to bite me in the a$$. I have the same card, although I got it when the rewards were a bit richer (5% on gas, groceries and drug stores, 1% elsewhere). I’m still getting the higher reward, but it’s just a matter of time until they cut it back on my account as well. Updating on the student loan situation - it took only 2 extra phone calls and an extra forty five minutes of having to deal with idiots on the phone, but Citi managed to fix their error today and all is well.
Citibank Forges Signature: Initially it might look just another complaint, but hold your breath. Please Read on… I took a personal loan from a Citibank during my stay in Chennai (India) in 2002. The bank granted me a loan after I have duly signed all required documents. I agreed for an ECS payment to that bank for the EMIs from my HSBC Saving a/c. The bank also took 3 surety cheques of my HSBC Saving a/c from me. I pre-closed the loan in 2004. The bank has sent me a closure letter confirming the loan is closed. And yes…the bank has also sent me a cover letter saying “Your unused post-dated cheques are enclosed”. You must say, the bank has returned my HSBC Surety cheques (which actually they should have been). But to your surprise, they have sent me cheques of another person. But then, what is the big deal? The big deal is, the bank has taken up 3 cheques of another person altogether, forged my signatures on those cheques and sent me. What if they have deposited those cheques into the related bank with my name? I would have been arrested first and then comes the rest…. I would have been the sole sufferer for no fault of mine. The Central Crime Branch could also find very easily whose cheques have the bank taken and sent to me as those cheques which I have received belonged to some other person holding an account with SBI (Chennai, India). I have been following up with the bank since the last 19 months. But to no avail. None of my letters was answered. Except that on 18th Oct 2005, they have sent me a letter stating that my HSBC cheques are not traceable and the other SBI cheques in question are being investigated. More than 1 year has passed but no reply from the bank. Phone calls, letters, emails….nothing helped. Yes of course, for emails you are sure to get automated replies saying “we shall get back to you shortly”. Who knows who defines the word “shortly”. I tried filing a complaint with the police station that comes under the required jurisdiction but probably due to technical reasons the complaint could not be accepted. I did not loose hope. I went to the Central Crime Branch. I met the Commissioner of Police. The complaint is now lying with the Central Crime Branch (CCB) for further investigation. Also, once the complaint has been accepted by the CCB, senior officials of the bank started even visiting me personally to settle the matter. I got calls from various Citibank officials whose name and numbers are all noted and can be provided. I have received enourmous calls from the bank’s top officials, once I informed them about getting the news published in the newspaper. I am being asked if I have had any monetary loss. The question is not of monetary loss but my signatures forged that too in somebody else’s cheque (how can you say it is not intentional) and enough evidence is there. In fact, in my presence at Central Crime Branch, Mr. Anjan Manikonda, Citibank VP (South India) was called up by ACP and few officials from Citibank did visit to meet the ACP. Ms. Anjana Makkar, Mr. Munish Sharda and Mr. Harshal Shah (senior officials) of Citibank India have been in touch with me ever since I have lodged the complaint with CCB (Not before that of course). Ms. Anjana Makkar has also personally visited ICRPC ( www.icrpc.org) where I have had a talk with her over the phone at ICRPC contact number. I must say, Mr. Arun Saxena, President, ICRPC is doing excellent jobs helping the common man like me. I am determined to take them for a ride for this kind of activities. Apart from Criminal case, a case will be filed by next week at consumers’ redressal forum for which ICRPC has already extended its help. Citibank not only lags in its service, but in order to cover up, it commits crimes as well. In India, Signature forgery in bank instrument is a criminal offence.
I’m a reporter for the New York Daily News and I’m trying to find new Yorkers who hate their bank and either wanted to switch but it was to much trouble, or went ahead and found a new bank. I have to wrap up the story in the next few days, but if you fit the bill or know someone who does, I’d like to talk. Well, there’s a first for me. In case any reader wants to get in touch with this guy, he does appear to be legit (other than working for the Daily News, of course), and his email address is gwilson@nydailynews.com.
Wow, what horror stories! I can definitely empathize with you. I had a recent debacle with Washington Mutual that was just inexcusable! total incompetence and caused me much anguish, for which i got a simple “sorry for the inconvenience” apology. I won’t go into details because it would take volumes, but it’s been a month and I’m still feeling the repercussions. Citibank have problems all around the world. In Spain i’ve got a very bad experience with them. they couldn’t do a money transfer in 15 days from Spain to a New York bank. Incredible. But I’m three months waiting to an explanation and they haven’t contact me to explain de failure. I was a seven year citibank customer but i decided to change. I work for Citicards Customer Service. First off I would like to say dont hate me. I hate the place as well, but most of it is because of the customers. Ive maintaned that we should send IQ test out with the cards. But All of you are correct as well. The Customer Service is terrible. I do my best to help people out. Ill remove about any fees and finance charges because Im a consumer as well. I am low income. 23k a year before taxes. Im going to ITT tech. Im not stupid as I have been called over the phone. Ive been called much much worse on the phone. Rich a*holes that think the 36k credit line makes the god when the truth is your account, in the big picture, doesnt mean squat. The cardholder agreement is crazy and unfair. BUT if you do READ it (Most people dont but it is a CONTRACT and you should) most of the problems you have are not problems, just a crappy agreement. For example the paying off of the student loan where the payment was spread through-out the loan with the lowest rate being paid off first. DUH! #1 Its in the agreement. “Your payments will be allocated to the lowest interest rate first. This means your savings will be reduced by making transactions that are subject to higher rates” Now that is verbatim. We have to say that, not for you, but for the rep to keep his/her job. The calls are ALWAYS recorded and SOMETIMES monitored live. #2 You got to think about credit as if everyone is trying to screw you and get paid. You have to think what is going to make that company the most money. And paying off low rates first will let higher ones accumulate interest earning the bank more money. Student Loans, Credit Cards, ect. This is the payment hiearchy and it holds true with almost every bank. That is just an example. But what I am getting at is READ THE AGREEMENT. If you have questions call and ask. The agreement is in legal terms so it is confusing. Most of the reps that work also agree that the practices of Citi are wrong, but 90% of the people who work there need the job to get buy. Now I do need to say that some of the problems are not in our control. There are things that limit us such as the system that Citi uses for CS. The system wont allow us to do some simple things. Or if you send in payments and its not showing, the rep doesnt know if it is sitting in the mail room, got lost in the mail, or if it is sitting on your desk. Citi is a terrible company. But the consumer is not the only one who has to deal with the BS, the rep also has to as well. If you have any specific questions or comments you can email me (Mike544612@yahoo.com). If it is account related please know that I cant look up your info. Questions should be about a previous experience that wasnt explained well or you didnt get it. I can explain why or give you reasons as to why that event occured. Citibank call center sucks, I’ve just wasted 3 hours of my life for their mistake1!!
1) not everything in the agreement is legally binding (check with your lawyer…) Citibank is no better in the UK, customer service doesn’t exsist from what I have seen and they have continually sent me the wrong information and ended my interest free period on my credit card 6 months early! Have now stoped using them but i’m still trying to the interest they charged back. Leave a Reply Archived Entry
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