How To Protect Yourself From Credit Card Fraud

Today, using a credit card has become commonplace and also a necessity. There would be hardly an area where it is not being used. Consider online transactions – a credit card is the key. But online transactions demand adequate security which gives a user the necessary confidence to use the card and at the same time helps build up a comfort level. Let's see what problem Rakesh encountered while using his card. 

Rakesh regularly uses the Indian Railways website to buy his train tickets online. He books tickets using his credit card and is happy about it as it saves him a lot of time and effort. He now wants to book his tickets from Mumbai to Udaipur, but he was surprised when the website refused his transaction and asked for an additional password. He tried using both Visa card and MasterCard but to no avail.

Analysis

Though credit card is a useful tool, it is more prone to frauds. To ensure that there is no misuse of a credit card, several features are added to it. Some of the important features include the credit card number, the period when the card expires along with another number that is known as the CVV number. In an online transaction, a card holder has to enter a three-digit number present on the back of the card to ensure that the payment is approved. 

Why was Rakesh asked for an additional password? Was his card misused?
 

Rakesh has been using his card both online and offline for a long time and he also makes sure that his card information does not fall into the wrong hands, so this is not misused.

The additional password requirement is in accordance with the Reserve Bank of India's (RBI) new guidelines. It will add another level of authentication to Internet transaction where the card is not physically present for use. The important point is it will not be based on any information that is visible on the card. 

Can he use his credit card again?

Rakesh will need to take some urgent steps to use the credit card again. First, he will have to make an application to the bank to get a password for either. For most of the banks the personal identification number (PIN)/password can be created and then used online all the customer has to do is navigate to credit card section of the bank's site and register for either 'Verified by VISA' or 'Master Card Secure Code' depending on the card being a Visa or a Mastercard. In other banks, this might require a physical application on a specified form. 

What does this application procedure involve?

While making the application, the bank will ask for the usual details present on the credit card plus some information that is not present on the card but is known only to the card holder. This ensures that the right person is generating the password. Once this additional PIN or password is generated it can be used for all transactions in the future.

Some banks go a step further and add another level of security in the form of some extra detail like a personal message or a symbol that will always be present when the password has to be entered to ensure that a genuine entity is asking for the password.

The process might take a few days to complete. This will require some action and the activation of a password. 

Can Rakesh be able to complete a transaction even if he is not registered?
 

In case Rakesh has not already registered directly with his bank, the merchant's site will direct him to the bank's website (if allowed) to generate the PIN when he tries for a transaction 

Will there be any other security?
 

There will have to be online alerts for all transactions that are more than Rs 5,000, so Rakesh will also be able to know when there is some transaction taking place with the use of his credit card. This will be another mechanism for which the information will be available for the credit card holder and hence they would be able to see if there is any misuse of their card. 

Is similar security available for offline transactions?
 

The RBI has suggested some security measures to banks for offline transactions like using cards with photographs of the card holder, cards with PIN and signature-laminated cards, etc. The country's largest private sector bank, ICICI Bank, has told its customers that photo identity proof might be required at merchant outlets for high-value card purchase. We can see more of these measures coming into place as RBI and banks become more proactive in tackling credit card frauds.