Analysis of Credit Card Fraud And 3 Ways You Can Prevent It



On April 4th 2016, the country woke up to a shocking piece of news. A businessman in New Delhi was duped of close to Rs. 2.52 lakhs by two young techies. According to the businessman, the duo used his credit card to shop on Flipkart and Snapdeal. Police discovered that the duo had been siphoning cash using credit cards – on the pretext of providing new credit cards with enhanced credit, from several other unsuspecting citizens across the country.

Credit card fraud is primarily the unauthorized and illegal use of your credit card to make purchases. Or withdrawing funds illegally from your account. Credit card fraud falls under a broader category of identity theft since your personal information is used by the perpetrator to take loans or other lines of credit.

Credit card fraud can happen in a variety of ways and some of the obvious or better known possibilities are:

  • Your credit card could be physical stolen.
  • You may drop your credit card on your way out of a retail store and it could be picked by a fraudster.
  • Somebody can scavenge for your discarded billing statements from a garbage dump and use the information available to purchase products.
  • Your bank website might get hacked, revealing all your personal sensitive information to fraudsters.
  • A dishonest waiter can take a picture of your credit card (when you offer to pay via card along with the bill) and provide the picture to a fraudster to initiate a credit card fraud.

Other less well known fraudulent practices include:

  • Telemarketing scam: where fraudsters will call you and ask for credit card information on the pretext of offering a discounted travel package or a free trip if you join a certain club.
  • Electronic fraud using devices called as Skimmers: Placed near credit card swiping machines, Skimmers read your card’s magnetic strip and grab your card details. Dishonest service clerks can use these devices to make an electronic copy of your card which is then copied to a blank credit card or computer to make fraudulent charges.
  • Phishing: phony emails claiming to be a business or institution might ask you for your credit card information. The goal of the fraudster is to make you reveal your personal information voluntarily.

Here’s how you can avoid being duped by credit card fraud:


  1. Be smart with your credit card

Don’t give your credit card number to anyone over the phone. Even if that someone says s/he’s calling from your bank and needs credit card information, tell her/him you will visit the bank yourself and provide the details to whoever is in charge.

Carry your credit cards separately and not in your wallet or purse. In case your wallet is robbed or lost, at least the cards will be intact.

After swiping the credit card remember to collect the card back before you walk away.

Save your receipts to compare them with your statement.

Don’t leave your credit card idly exposed. A photograph of the credit card can lead to misuse

When you receive a new card, sign it immediately. This reduces the possibility of someone superimposing their signature onto your credit card in case it is lost or stolen.

Never lend your credit card to anyone.

Smart Credit Card Usage


  1. Online Transactions

Be careful while using your credit card online. Only enter your credit card information over secure websites and those which are legitimate. Look for ‘https: //’ on the address bar of your browser.

Use strong passwords with a combination of upper and lower case characters and numbers. Don’t share this password with anyone.

Don’t click on email links from anyone pretending to be from your bank or Credit Card Company. These links could be phishing scam

Check if the online shopping websites you browse for have safe digital certificates from standard authentication service providers such as VeriSign.

Look out for a confirmation payment email or SMS so that you know the money you just paid has reached the merchant.

Safe Online Transactions


  1. Credit Card Alerts

Subscribe to mobile or email alerts from your credit card issuing bank or company. In case your card is lost or stolen and you don’t realize it, the alerts will let you know about any fraudulent transactions occurring.

Review your monthly credit card statements. In case you notice any unusual transaction in your statement, report it to your card issuer within 30-60 days of receiving the statement.

Always ensure that your credit card provider maintains updated information provided by you.

Inform your credit card provider when you change your address, phone, number or email. Also inform the bank or credit company if you are travelling overseas and also the number of supplementary credit cards your family members hold.

Credit Card Alerts


Post Fraud Bank Escalation Measures

It’s possible that despite all your precautions you may still end up losing your credit card.

Contact your bank immediately. In case you contact the customer care, note down the representative’s name and your complaint reference number. If you are submitting a physical letter, keep a photo copy for yourself.

At the same time file a First Information Report (FIR) at a police station regarding the fraud. In case of online fraud you can file a complaint with a cyber police station in your state.

The bank’s vigilance department takes over the investigation. In case of any fraudulent money transactions reported, the account is frozen and tracing of the amount starts. The bank account where the money is transferred to is contacted. In case of any online shopping activity, the online merchants are contacted.

In the rare instance that your bank does not reply to your complaints or outright rejects it, you can contact a banking ombudsman. His role is to resolve customer complaints of banks relating to credit card complaints, deficiencies in services promised by bank sales agents or levying service charges without prior notice to a customer. You can either send an email or courier your complaint letter.


Leave a Reply

Your email address will not be published. Required fields are marked *