Credit Card Information for Sale

While the global economic turmoil is forcing Governments to initiate measures to arrest further decline in growth rates, cyber crooks operating in the underground economy seem to be cashing in on the opportunity.

Wondering how? With shopping and banking transactions occurring online, password stealing has, for instance, become a common cyber crime. McAfee Avert Labs has seen the count of password stealing malware variants increase by nearly 400 per cent during 2007-08.

Symantec’s Report on the Underground Economy reveals that the most frequently advertised item on underground economy servers are bank account credentials (which consist of account numbers and authentication information) accounting for 18 per cent of goods and services available for sale.

The large supply of bank account credentials may be due to a shift towards online banking.

Forty four per cent of Internet users perform some degree of Internet banking in the US, it is higher at 67 per cent in Canada. It has just caught on in India. According to the report, the advertised prices for bank account credentials ranged from $10 to $1,000 (between July 2007-June 2008), with prices depending on the amount of funds available, the location and type of account.

The second most common advertised item was credit card numbers accompanied by CVV2 numbers, accounting for 16 per cent of the sale of all advertised goods and services. (Merchants at many online sites require the CVV2 number as part of their authorisation process and the number of sites requiring this authentication is increasing.)

The Report said credit cards with CVV2 numbers were typically sold in bulk, with packages ranging in size from 5 to 500. The advertised prices of these ranged between $0.50 and $12.

The third most common item advertised for sale on underground economy servers was credit cards, accounting for 13 per cent of all advertised goods during the reporting period. Symantec perceives credit cards as not being as popular as bank account credentials or credit card numbers possibly because these are difficult to exploit due to the time-sensitive nature of the stolen cards and increased security measures taken by merchants.

Credit card prices observed on the underground economy servers ranged from $0.10 to $25 per card number. Symantec estimates the value of the total advertised goods on observed underground economy servers at over $276 million during the said period.

While law enforcement agencies strive to arrest and indict those involved in frauds and identity theft, the global nature of these criminal enterprises is making it increasingly difficult to locate their operations and shut them down.

This is just the tip of the iceberg. Cyber criminals are on the prowl, looking for newer ways to make money. So, keep your identity and wallet safe by adopting security safeguards.

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First Aid for Credit Card Fraud

If there is a suspicious transactions on your credit card, then you need to take the following actions immediately.

Action 1: Get your Credit Card Blocked immediately by contacting the call centre

Action 2: List all the Transactions you have not done with the Amounts and the Description that appears on your Statement. Ask the executive if it was an Internet transaction or a Physical Swipe.

If it is a physical swipe then it means someone has got hold of your physical card, then assume your money is not going to come back.

Step 3: Ask the Call Centre Executive where in the website is the “Transaction Dispute Form” displayed. Download the form, fill with the necessary details pertaining to fraudulent transactions and amounts and send to the Banks. Also scan and mail to the Banks Customer Service ID. It is better to write a covering letter to the bank asking for a charge-slip retrieval if these are physical card swipes.

Ask the Call Centre when you can contact them next for an update and keep the details of your calls / mails.

Step 4: If the Transaction was an Internet Transactions which was done without the Card being physically swiped request for a Temprory Credit (which is given for a period of 45 days) and initiate a Chargeback process. This is a process where the Bank does an investigation with the vendor and reverts back to you with a decision within 45 days. For disputes on Internet Transactions there is a good chance of being ruled in the customers favour. Keep following up with the bank regularly. For physical swipes where the Card has been stolen, the customer is at the mercy of the fraud investigations done by the Bank.

Step 5: If you have received a Temprory Credit, you do not need to make a payment for those transactions. Else please make your minimum payment due to avoid being reported to CIBIL

Step 6: In case of p0hysical swipes, you will need to accept whatever the bank rules, in the case of Internet Transactions, you can write to the Nodal Officer of the Bank or the Banking Ombudsman and escalate the complaint further if you get a satisfactory resolution

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RBI's Step to Check Credit Card Fraud

From August 1, you need not think twice before letting your credit card out of sight at a restaurant, petrol pump or any other merchant establishment. The details printed on your card including the card number, expiry date and three-digit card security code (popularly known as the CVV) will not be enough to make fraudulent online transactions.

A RBI directive has ensured that from August, credit and debit card-issuing banks must provide for additional authentication of information over and above what is visible on the physical card. In other words, the cardholder must key in an extra security code or some other data to complete a online transactions.

This consumer-friendly instruction, issued by the RBI on February 18, also mandates a system of online alerts to the cardholder for all `card not present' transactions that exceed Rs 5,000. The circular adds that banks would be penalised for non-adherance to the directive under the Payment and Settlement Systems Act 2007.

In an email response to TOI, RBI though specifies, "Banks are free to decide on the technology they wish to use to fall in line with these instructions.'' On their part, banks have been beefing up their online security. Virtual cards, which have been around for a while, are a secure option offered by the likes of HDFC Bank, ICICI Bank and Kotak Mahindra Bank. HDFC's NetSafe, for one, creates a code that can be used for one-time transaction. "It is a limited period validity number,'' says Sanjeev Patel, EVP and head, direct banking channels, HDFC Bank.

Virtual cards create a code separate from your CVV number so you don't have to key it in on the merchant website. Any unused amount from the card is credited back to the credit or debit card account.

Banks also offer increased security via MasterCard's Securecode and Visa's Verified by Visa, which offer personalised passwords. T V Seshadri, vice-president and country general manager, South Asia, MasterCard, says, "Much like the authentication process required for payment card use at ATMs, SecureCode requires cardholders to enter their personal code in an online window on their PC before a transaction can be processed. Even if someone knows their credit or debit card number, the purchase cannot be completed without their SecureCode at a participating merchant.''

But these initiatives can work only if the cardholder is prompted to enter the code by the merchant site. Says Seshadri, "The card-issuing bank, the retailer and the retailer's acquiring bank will all have to participate. Even if one of these entities does not participate, the cardholder is not prompted to enter the SecureCode.'' Seshadri, though, adds that a number of banks in the country no longer allow their cardholders to transact on e-commerce sites without entering such the code.

back to RBI guidelines on Credit Card

Electronic Cards from ICICI

ICICI Bank has come out with electronic cards for its customers in association with mChek, India’s one of the leading mobile payment solution provider. These cards will be issued to the mChek application on the customer’s mobile phone.

Visa International, the leading international electronic payment network had earlier approved mChek as a platform to which the issuer can issue an electronic mChek Visa card to deliver the convenience of mobile transaction with added security.

The customer can use the mChek Visa Credit / Debit card to perform various transactions like bill payments (postpaid, other utilities), prepaid recharge, money transfers, pay insurance premiums, buy air tickets, movie tickets or perform any other merchant transactions using their ICICI bank debit card or credit card account.

The card data is stored in a fully encrypted form on the phone which ensures full security and reduced risk of fraud for card based transactions

Credit Card Frauds to be checked by RBI ruling.

You need not think twice before letting your credit card out of sight at a restaurant, petrol pump or any other merchant establishments from August 1st.The details printed on your card including the card number, expiry date and three-digit card security code (popularly known as the CVV) will not be enough to make fraudulent online transactions.

A RBI directive has ensured that from August, credit and debit card-issuing banks must provide for additional authentication of information over and above what is visible on the physical card. In other words, the cardholder must key in an extra security code or some other data to complete a online transaction.

This consumer-friendly instruction, issued by the RBI on February 18, also mandates a system of online alerts to the cardholder for all `card not present' transactions that exceed Rs 5,000. The circular adds that banks would be penalised for non-adherance to the directive under the Payment and Settlement Systems Act 2007.

In an email response to TOI, RBI though specifies, "Banks are free to decide on the technology they wish to use to fall in line with these instructions.'' On their part, banks have been beefing up their online security. Virtual cards, which have been around for a while, are a secure option offered by the likes of HDFC Bank, ICICI Bank and Kotak Mahindra Bank. HDFC Bank's NetSafe, for one, creates a code that can be used for one-time transaction. "It is a limited period validity number,'' says Sanjeev Patel, EVP and head, direct banking channels, HDFC Bank.

Virtual cards create a code separate from your CVV number so you don't have to key it in on the merchant website. Any unused amount from the card is credited back to the credit or debit card account.

Banks also offer increased security via Master card's Securecode and Visa's Verified by Visa, which offer personalised passwords. T V Seshadri, vice-president and country general manager, South Asia, MasterCard, says, "Much like the authentication process required for payment card use at ATMs, SecureCode requires cardholders to enter their personal code in an online window on their PC before a transaction can be processed. Even if someone knows their credit or debit card number, the purchase cannot be completed without their SecureCode at a participating merchant.''

But these initiatives can work only if the cardholder is prompted to enter the code by the merchant site. Says Seshadri, "The card-issuing bank, the retailer and the retailer's acquiring bank will all have to participate. Even if one of these entities does not participate, the cardholder is not prompted to enter the SecureCode.'' Seshadri, though, adds that a number of banks in the country no longer allow their cardholders to transact on e-commerce sites without entering such the code

back to RBI guidelines on Credit Card

Credit Cards during foreign travel - Points one must take care

While credit cards are accepted at many million locations worldwide, there still may be times when cash is your only payment option. However, you should be cautious of carrying too much cash around. Despite the rather ingenious methods people have created, such as hiding cash throughout their luggage or on their bodies, cash can nevertheless be lost or stolen. And if it is, it cannot be replaced, like a card. Carrying a credit or debit card is, therefore, much safer than carrying cash or travellers cheques.

If you hold a MasterCard, for instance, you would have the protection of the MasterCard “zero liability” policy. To qualify for zero liability protection, you must meet certain conditions including having exercised vigilant care in safeguarding your card and immediately notifying your issuing bank of the loss, theft or unauthorised use of your card.

This apart here is a simple list of tips for travellers using their credit or debit cards abroad:

* Before you leave, check the expiry date and credit limit of your card. You don’t want to arrive at your destination and find that your card has either expired or reached its limit. Also, if you find that you’re near your limit, you might be able to increase it through your bank.

* Contact the bank that issued your card and let them know where and when you’ll be travelling. This is strongly advised so that the bank is aware that overseas transactions will be made. The unfamiliar spending patterns could cause your bank to suspect that your card is being used fraudulently and thus delay your card purchase approvals.

* While you have your bank on the phone, ask if you need to change your PIN number so that it will work in the country you’re visiting, as some foreign ATMs often only accept four-digit PIN numbers. If it turns out you that you do need to change it, ask how to go about doing so.

* Make several photocopies of the front and the back of the credit and debit cards that you’ll be taking with you on your trip. Leave one copy with a relative or friend back home and carry the other with you. Also write down your bank’s emergency contact information. This way, if your card is lost or stolen, you can quickly provide your bank with all the necessary information needed to have it cancelled. Better still, contact MasterCard Global Services directly who will put you in touch with your bank.

* When making purchases, ask whether your card will be charged in the foreign currency or in your country’s currency. An increasing number of merchants are equipped to convert the cost of a transaction to the cardholder’s own currency, but they often will impose an additional service fee or use an exchange rate inferior to that used by the credit card companies.

* Consider taking more than one credit/debit card with you. You’ll want to keep them in different places. This way, if one is lost or stolen, you’ll have a backup.

* If your card is lost or stolen, you can cancel it and the money remains in your account, provided whoever stole your card didn’t use it before you were able to phone your bank and cancel the card. With cash, if it’s gone, it’s gone for good and cannot be traced.

* If you use a credit card to book a hotel or hire a car, the company may put a hold on your account for the total amount of your expected bill. This could be an inconvenience, especially if it ties up your entire credit card limit. Again, a second credit card might come in handy. Do make sure, though, that the company removes this hold once you’ve paid the bill.

* Some banks offer you free travel insurance if you pay for your overseas flights with your credit card. This means that you are covered in the unfortunate event of a medical emergency, trip cancellation or baggage losses.

It is advisable that you double check what your insurance covers and whether you will need additional top-up coverage, as most banks offer a basic travel insurance package.

It is of little wonder, then, that credit and debit cards have come to be regarded as the best way to pay for expenses while travelling abroad.

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Credit card Security - few things to be learned

Credit cards are loaded guns that can go off any minute emptying your life savings if you aren’t careful.

The Payment Card Industry (PCI) Data Security Standard, which has a set of regulations for credit card security over the Internet, is not a government regulation and therefore merchants or service providers cannot be held legally accountable when thin gs go wrong. Recently, the RBI issued a notification to all banks to implement a system of providing for additional authentication and online alerts to cardholders for all “card not present” transactions of the value of Rs 5,000 and above.

This system becomes mandatory from August 1, 2009, and banks have been advised to adhere to the instructions.

Amuleek Bijral, Country Manager, India and SAARC, RSA, the Security division of EMC, says, “These directives from RBI strengthen the need for looking at 3D Secure solutions. ”

RSA’s 3D secure technology is designed to reduce the possibility of fraudulent card use by authenticating the cardholder at the actual time of the transaction.

Bijral says, “3D Secure is an industry standard. It was Visa’s attempt to put the ‘signature’ into an e-commerce transaction. Card holders assign a password to the payment card through enrolment. The participating merchants and banks also require the password with each e-commerce transaction.”

How do 3D Secure solutions work?

3D Secure is the payment industry’s internet authentication standard and covers three domains: Acquirer Domain (the merchant and the bank to which money is being paid), the Issuer Domain (the bank which issued the card being used) and finally the Interoperability Domain (the infrastructure provided by the credit card scheme to support the 3-D Secure protocol).

Hence, the name 3D Secure; securing all three domains.

A significant proportion of chargebacks can arise as a result of the cardholder denying that they authorised a transaction.

The 3D Secure technology is designed to reduce the possibility of fraudulent card use by authenticating the cardholder at the actual time of the transaction and subsequently reducing the merchant’s exposure to disputed transactions and chargebacks, says Bijral.

3D Secure can be thought of as an online version of ‘Chip and Pin’ technology, whereby the cardholder has a personalised password registered with their card that is entered during the checkout process.

Enrolling for 3D Secure benefits both the enabled merchants and the cardholder as the former will avoid liability from chargebacks relating to fraud and clients can be assured that no one else can use their card, he says.

Basic do’s and dont’s

Bijral also stresses the often-listed security steps for credit card use.

According to Bijral, at an individual level, RSA is advising customers to give as little information as possible and, if a Web site insists on information that doesn’t seem relevant and can’t justify its request, to leave the site immediately.

The security specialists are also reminding customers to choose strong passwords and update them regularly and to clear the cookies to increase protection against potential hackers. Also, when visiting a Web site, RSA recommends that customers go with companies they have heard of and also make sure the Web site address doesn’t change or re-direct to another site.

A closed padlock or key should appear on the page being browsed, letting you know your personal information will be encrypted or scrambled.

Do not respond to e-mail or click on Internet advertisements that promise you free gifts on special days. You should switch on the anti-phising feature of your browser, he stresses.

RSA also recommends avoiding the use of shared computers for financial transactions.

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Card Protection Program (CPP) Clarified

Here are the answers to some of the general questions that people ask about CPP. For any other queries, please call the CPP helpline number - 6000-4000 (Prefix city STD code if calling from a mobile phone).

Why should I buy a CPP Card Protection membership?
When you realise that your wallet is missing, it's a race against time to have all your cards stopped immediately. With CPP Card Protection, all it takes is one free call to the customer service team and they will contact your card issuers to have your cards cancelled within minutes. So no matter where you are in the world, CPP will take care of it for you.

*CPP History

What does my membership cover?
A summary of the benefits you are entitled to is as follows:

• One free call to block all your cards
• 24 hour toll free helpline
• World wide cover
• Emergency travel & cash assistance
• Fraud protection
• Valuable document registration

Lost card replacement assistance The details are contained in the membership guide and terms and conditions which come with your welcome pack.

How can I purchase a membership?
To buy Card Protection call CPP on 6000-4000(Prefix city STD code if calling from mobile phone)

------ Classic plan Premium plan
Single - Rs. 995/- Rs. 1295/-
Joint - Rs. 1495/- Rs. 1945/-

How can I pay for my membership?
CPP accept payment by Visa and MasterCard. The annual fee is deducted as one lump sum at the beginning of the membership and is automatically applied each year until you advise otherwise

When will I receive my welcome pack?
Normally, you should receive the welcome pack within one week from the date the payment is confirmed.

What is in the welcome pack?
The welcome pack contains the following items:
-A confirmation letter outlining your membership details.
-A registration form for you to register all your card details.
-Terms and conditions of the membership.
-A membership guide listing all the benefits you are entitled to.
-Key fobs and reminder stickers which will help serve as reminders of CPP contact numbers.

How long is a membership period?
Your membership runs continuously for one year from the membership effective date.

How do I renew mu membership?
Six weeks prior to the expiry date of your membership, CPP will send you a reminder letter advising that your membership is due for renewal. CPP will take payment from the same credit card as in the initial membership unless otherwise advised by you to debit an alternate.

Can I cancel my membership anytime?
When you first purchase the membership, you have a 30 day cooling off period when you can cancel the membership and receive a refund if no claims have been made.

How do I register my cards?
There are 2 options for registering your card details.
Mail - You can complete the registration form, found in your welcome pack and return it to : CPP Assistance Services Pvt. Ltd.PO Box No. 4337,Kalkaji Post OfficeNew Delhi - 110019
Phone - You can call CPP on 6000-4000 (Prefix city STD code if calling from mobile phone)

Why do I need to register my cards?
Your cover starts as soon as CPP have confirmed payment. Therefore, we recommend that you register your card details with CPP as soon as possible. By doing so, CPP will be able to cancel your cards right away to avoid card fraud taking place.

If I lose my cards, how do I report the loss?
As soon as you have discovered the loss, you should call CPP's lost and stolen card helpline on 6000-4000 (Prefix city STD code if calling from mobile phone) as soon as possible to report your loss. CPP will then contact your card issuers immediately to cancel your cards.

If I am abroad and I find that my wallet, travel tickets and passport have been stolen, what should I do?
When you discover the items are missing, immediately call CPP's lost and stolen card helpline on 6000-4000 (Prefix city STD code if calling from mobile phone). CPP's specially trained agents will be able to guide you through the whole process. It's first priority will be to cancel the lost cards. CPP will then advise you how and where to receive a replacement passport. Finally, CPP will assist in the re-issuing of travel tickets so that you may return home.

How can I pay for my hotel expenses?
You should inform CPP that you would like assistance with the hotel payment. CPP will then liaise with the hotel and advance the expenses to pay the hotel directly.

How do I make a claim?
Should you ever need to make a claim, please call CPP on 6000-4000 (Prefix city STD code if calling from mobile phone) and they will send you a claim form. The form needs to be completed with as much detail as possible and then returned to CPP with original documents for processing.

Is there any time period limitation for submitting a claim?
All claims must be received within 28 days from the date of reporting card loss. Please remember to include all the documents that CPP ask for, including original receipts (not photocopies) for any expenses claimed for. If you do not, CPP will not be able to process your claim until we have received them.

Who can I contact if I have any questions relating to my membership?
You can call the customer service helpline on 6000-4000 (Prefix city STD code if calling from mobile phone). The lines are open 24 hour a day, seven days a week.

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Citibank Platinum Select Credit Card - Launched

Citibank India has announced the launch of the Citibank Platinum Select Credit Card, which offers customers a powerful combination of preferential privileges, priority service and superior protection.

The key differentiators of the Card are its best-in-class rewards program with superior earn rates, low interest rates, a service platform dedicated exclusively to its cardmembers and enhanced security and fraud covers. Citibank Platinum Select aims to provide cardholders a highly individualized experience based on the key themes of gourmet dining, rewarding shopping, recreational family time and peace of mind.

The Card will be launched initially in New Delhi and Mumbai and will carry an annual fee of rupees Four Thousand. Globally, Citibank Platinum Select is a well-established and popular credit card platform. India is one of only two countries in Asia-Pacific - the other being Thailand - to offer the Citibank Platinum Select Card.

Announcing the launch, N. Rajashekaran, Country Business Manager, Global Consumer Group, Citi India, said, "The Citibank Platinum Select is a fine demonstration of our strategy to offer the right product propositions for maximum customer engagement and activity on our products, supported by strong customer experience and service initiatives.

" Speaking on the occasion, Sandeep Bhalla, Business Manager, Cards, Citi India, said, "Recent research has revealed that a strong majority of Indians believe that money can't buy happiness, ranking peace of mind, good health and a happy family life over money. It is such decisive insight that has contributed to the design of the Citibank Platinum Select proposition. Each element of the package is carefully selected to make customers feel indulged. We are confident that the bouquet of preferential privileges, priority service and superior protection will make the Platinum Select the card of choice in the customer's wallet."

The Citibank Platinum Select Card benefits include: Preferential Privileges

-- Accelerated Earn Rates: Customers earn 5 times the reward points on lifestyle spends such as those on apparel, dining and books. Reward Points earned on the Citibank Platinum Select Card can be redeemed in-store; from the rewards catalogue; converted to airline miles; for customized holiday packages or against any purchase on the statement.

-- Exclusive dining privileges: Citibank Platinum Select Cardmembers will be placed on priority for table reservations at over 150 of the finest outlets besides being offered complimentary beverages and desserts and a year-round discount of upto 20%.

-- Complimentary access to swimming pool, spa and health club: Customers can enjoy weekend experiences centered on complimentary access to the swimming pool, spa and health club at some of the best hotels, and complimentary golf lessons. Customers with substantial spends on the Card will be eligible to enjoy the complimentary services of a chauffer-driven sedan or free tickets to a movie show at select multiplexes.

-- Discounted access to signature golf courses: Cardmembers and a companion can enjoy golf at 15 signature domestic golf courses at upto 50% discount on green fees with no black-out days, advance payments and cancellation charges.

-- Citibank Platinum Select Card members will be able to enjoy a 50% discount on weekend stays at Taj Properties and a 50% discount on buffet lunches at any Taj property for up to six persons at a time.

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Online Credit Card deals protected by SMS alert

CREDIT card frauds through online transactions may soon see a dramatic decline. From August 2009, banks will clear online card transactions only after they are authenticated by a separate password. The Reserve Bank of India has also made it mandatory for banks to send SMS and online alerts for all online transactions exceeding Rs 5,000.

The central bank will also shortly prescribe security measures to be employed for card usage in interactive voice response (IVR) transactions, where cardholders punch in their card details into the telephone to make payments.

At present, anyone who has access to information printed on credit cards, such as the card number and the Credit Verification Value number, can misuse the card online. This loophole will now soon be blocked. With the increased use of credit and debit cards in the country, RBI has been reviewing various options to enhance the security of online transactions.

After consulting with banks and card companies, the RBI has decided to make an additional online authentication compulsory for all banks. “It would be mandatory to put in place with effect from August 2009 a system of providing for additional authentication/validation based on information not visible on the cards for all online card not present transactions,” the RBI said, in a circular issued to all banks.

IT experts have been highlighting this security risk for a long time now. Some banks have already put in place a credit card verification process for online transactions. Now, with the passage of the Payment and Settlement Systems Act, 2007, the central bank has got the power to regulate all online transactions.

In the same circular, the RBI has asked banks to provide customers with online alerts on every transactions over Rs 5,000 where the card is not required to be presented physically. The directive on online verification has been issued under Section 18 of the Payment and Settlement Systems Act, 2007.

Section 18 of the Act gives the RBI broad-based powers to give directions to “system providers or the system participants or any other person either generally or to any such agency and in particular, pertaining to the conduct of business relating to payment systems”. These orders can be given by the RBI if it is satisfied that it is in public interest.

Online, credit card frauds cost banks 42cr

Banks across the country reported a loss of over Rs 42 crore to internet/online banking and credit cards frauds during April-December last year with the maximum amount being fraudulently withdrawn using credit cards.

Though the states collectively reported 233 such crimes in 2008, Maharashtra reported 23 incidents — the maximum — during the ninemonth period last year. Tamil Nadu, on the other hand, has topped the list in terms of losing the maximum amount (Rs 2.09 crore) to internet frauds.

While different private and public sector banks on their part collectively reported a loss of Rs 36.54 crore to credit card frauds , the states reported a loss of Rs 6.57 crore to internet frauds.
According to figures released in Lok Sabha in response to a question, the lending institutions in Maharashtra lost Rs 55.54 lakh to online fraudulent practices.

Rajasthan, Andhra Pradesh and West Bengal lost Rs 89.93 lakh, Rs 64.29 lakh and Rs 35.72 lakh, respectively while Kerala and Delhi lost Rs 17.60 and Rs 10.90 lakh, respectively, owing to cyber frauds.

Eleven cases of internet fraud were reported from Andhra Pradesh, eight from Delhi, seven from Tamil Nadu, six from Karnataka and five from West Bengal during April-December 2008.

However, banks in Bihar, Goa and Jharkhand did not lose a single penny to such fraudulent activities.

According to data updated till 2007, out of the total 355 people arrested across the country, a maximum of 156 people were arrested in Madhya Pradesh in connection with cheating-related cases under IT Act — fake digital signature (Section 64) and breach of confidentiality/privacy (Section 72) — and IPC — forgery and criminal breach of trust/fraud).

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ICICI Bank loses Rs 11.47 cr in Credit Card Fraud

One of the largest private sector lending institutions ICICI Bank lost more than Rs 11 crore due to over 8,000 cases of credit card

There were 8,280 cases reported by the ICICI Bank to the Reserve Bank of India, in which it lost Rs 11.47 crore between April and December 2008, Minister of State for Home Shakeel Ahmad said in reply to a question in the Lok Sabha.

A total of 703 and 2,484 cases were received by American Express Bank and HSBC Bank related to credit card frauds, in which they lost Rs 6.04 crore and Rs 4.90 crore, respectively.

According to the data, a total of 12,959 such cases were received during the said period in which various banks lost Rs 36.54 crore.

No cases were reported by IDBI Bank, Canara Bank and Indian Overseas Bank related to credit card frauds last year.

Other banks, which lost significant amount to such practices, were Citibank, which bore a loss of Rs 4.73 crore, Standard Chartered Bank Rs 2.39 crore and Deutsche Bank with a loss of Rs 2.09 crore.

Many nationalised banks were also affected by the fraudulent activities.

Card Protection Program. CPP

Here is a Great news for Credit Card Holders in India. Under pressure from regulator to introduce cover on lost card, fraudulent transactions etc - Kotak Credit Cards and Citibank have introduced Card Protection Programme.

What is Card Protection Programme - CPP ?

As a credit card holder, you are protected from liabilities arising from your credit card loss / theft on transactions before and after. Additionally, it covers fraudulent transactions without you losing the card [say a -commerce site gets hacked which has stored your credit card details and they are misused]

CPP comes at a small fee of Rs 950 p.a and can get coverage of upto Rs 50,000 on fraudulent transactions and for Rs 1,250 fee th coverage goes upto Rs 100,000. It also covers upto Rs 10,00,000 for transactions done after reporting of credit card loss / theft.

Kotak Bank has introduced CPP facility for its Platinum and signature card holders for FREE.

*Credit Card Protection Program FAQs

We recommend users to sign-up for CPP facility if their bank is offering the same. This comes for FREE in the US with your credit card. However, in India banks are charging a fees and we feel its OK to do so in the beginning and later the fees can be reduced. Share your experiences.

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CIBIL The Gateway

The truth is today people spend more than our grandparents or parents ever did. Increasing incomes, desire to own a house in one’s early twenties, availability of variety in lifestyle and brand choices, a booming economy, growing number of enterpreneurs, new business establishments etc., are leading to a tremendous amount of money outflow. Money rotation is a key factor in a progressive economy and this means there is a lot of lending. How does one keep a tab on all the credit lent and how does one identify defaulters and refrain from lending to them again and again?

The government of India and RBI got together to bring CIBIL into existence. Currently Banks, Financial Institutions, State Financial Corporations, Non-Banking Financial Companies, Housing Finance Companies and Credit Card Companies are Members of CIBIL.

The idea behind setting up CIBIL is to gather all exisiting consumer and commercial credit information and pool it in a one point source for reference. As in an individual or commercial establishment could have accounts in several banks and credit from different lending institutions. All such data can be pulled out for a quick reference check on the individual or commercial establishment, seeking loans, to be aware of the repayment track record of the loan seeker and quickly decide on loan eligibility.

CIBIL acts as weeding mechanism, that helps identify poor repayment track records. It helps protect lenders from giving credit to people and establishments who are unlikely to repay what is lent. Even if credit is provided, it is done so at a very high rate of interest, thereby ensuring that the bank is able to recover a considerable sum of money even if a default happens some time into the loan tenure.

CIBIL to maintain Fraud database

On the flip side, if you have an impeccable repayment track record, you can reap benefits from it! Banks provide a lower interest rate for sound credit profiles and these `Credit Information Reports’ can work to your advantage. It also helps lenders and Banks quickly process a loan, without wasting valuable time on research and background check of the loan applicant.

To protect creditors information CIBIL has stringent security measures in place. Only members of CIBIL can access the info and even they can do so only on a requirement basis.

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Banks offer card protection schemes to attract customers

Faced with increasing credit card losses and a shrinking card base, some banks are offering schemes that provide customers coverage of fraudulent transactions in case of loss or theft of credit and debit cards.

In India, two banks currently offer the scheme — Citibank and Kotak Mahindra Bank — jointly with CPP Assistance Services Pvt Ltd, a UK-based firm. Card Protection Programme (CPP) is one that assists customers by blocking all cards — debit and credit — in case of theft and loss, both before and after reporting. CPP also assists customers with emergency cash, travel and hotel assistance, thus taking care of all their needs in any exigency.

Coverage

Customers can sign up for any number of cards and of any bank for the programme.
Under the two plans offered by CPP, for an annual fee of Rs 950, customers can get coverage of up to Rs 50,000 of fraudulent transactions before notification. For Rs 1 lakh coverage, the annual fee is Rs 1,250. Once the cardholder signs up for the scheme, transactions done seven days prior to the date of reporting, are covered.

In case transactions occur after notification of the theft or loss, the coverage is as high as Rs 15-20 lakh.

Kotak Bank launched the scheme about two weeks ago as a pilot project and over 1,000 of the bank’s existing cardholders have already registered for the scheme, said Mr Subrat Pani, Business Head (Cards), Kotak Bank.

e-Commerce frauds

The bank already offers a protection programme for its Platinum and Signature credit cards, he said.

Kotak Bank is looking at a card base of 2.5 lakh by 2009. The next step for the bank is to cover e-commerce frauds that happen in internet transactions.

Citibank also launched a similar scheme earlier this month. A press release announcing the launch of the programme had quoted Mr Sandeep Bhalla, Business Manager (Cards), Citibank India, as saying, “Regulators have strongly recommended that banks introduce a cover to take care of the liabilities arising out of lost cards, and Citicards has provided such a solution to our customer base”.

Citibank launches card protection plan

Citibank has launched a credit card benefit that protects against any misuse due to lost/stolen card. Amongst other benefits, it safeguards and protects them against card loss, theft and resultant fraud.

Launched in partnership with CPP Assistance Services Pvt Ltd (CPP), a global leader in assistance services marketing, this service is extremely convenient as it protects the cardholder’s entire wallet of cards, credit and debit, including those of other issuers, and even non-financial ones such as store, loyalty and membership cards. Further, the cardholder is protected from any fraudulent use that may have occurred seven days prior to discovery and within 24 hours of notification of card loss, the bank said.

Additionally, the CPP Card Protection offers benefits such as a single number to call to cancel all lost cards, replacement assistance, emergency travel and hotel assistance in India and overseas due to card loss, valuable document registration and retrieval, reminder services and access to a 24 Hour toll-free CPP helpline.

Cardholders can choose from a set of distinct plans, depending on their lifestyle and spend behaviour. Depending on the plan selected, customers can be covered for fraud loss on their cards up to Rs 1 lakh prior and Rs 20 lakh post notification; overseas emergency assistance for payment of hotel expenses of up to Rs 1.2 lakh and Rs 60,000 in India; and replacement travel ticket advance of Rs 1.2 lakh while overseas and Rs 60,000 whilst in India. The annual fee applicable is Rs 995 for the Classic plan and Rs 1295 for the Premium plan. Citibank Cardholders can now enrol themselves for CPP Card Protection membership by calling the Bank’s 24X7 customer service channel CitiPhone in their city.

Losing one’s wallet can be devastating, especially if its contents are stolen and abused. With this protection offer, consumers can now travel and use their cards with a peace of mind, anytime and anywhere knowing that their card is protected. Also, regulators have strongly recommended banks to introduce a cover to take care of the liabilities arising out of lost cards, and Citicards has provided such a solution to our customer base.”

In addition to providing Citibank cardholders protection against fraudulent usage of their cards at home or overseas, CPP Card Protection also serves as a repository of valuable personal information such as passport details, driving license number, share certificates, insurance policies and other such important documents. Once these are registered with CPP, cardholders need only to make a single phone call to retrieve these instantly.

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What's the first thing you should do if you lose your credit card?

Just call up the bank’s 24 hour call centre and deactivate the card. This should
take precedence even over your attempt to track your wallet in the lost trail.

This is because very few banks in India offer protection against fraudulent use of credit cards. Of course, you can breathe a little easy if your bank insures your lost card from any misuse.

Standard Chartered Bank, for instance, has tied up with Tata AIG General Insurance Company to launch the ‘Plus Extended Protection Plan’ last week. This product, which has to be bought separately, will cover the card customers from any possible fraudulent use of the cards prior to reporting the loss. “We receive several lost card reports in a month. The product will ensure protection to our customers against any fraudulent use,” said RL Prasad, general manager, Credit Cards and Personal loans, Standard Chartered Bank.

The insurance cover will reimburse (up to Rs 50,000) per fraudulent transaction up to 12 hours prior to the customer reporting the loss to the bank. Also, the bank has extended this cover to all debit and credit cards. Similarly, even ABN Amro Bank offers this cover with a total coverage of Rs 2,000-Rs 5,000 at a monthly premium of Rs 100.
In case of SBI Cards, the credit card company caps the liability to a maximum of Rs 1,000 for non-gold cards once it receives a proper notification of the loss by the customer. The gold card customers enjoy zero liability once they notify the bank authorities.

Among the other leading credit card players, Citibank is still mulling the idea of offering a similar protection. ICICI Bank, however, doesn’t offer any such cover. Says Sachin Khandelwal, Head — Cards Product Group of ICICI Bank: “This cover is not very useful. We send mobile alerts whenever customers swipe in excess of Rs 2,000. That would help them keep a tab on all cards.”

HDFC Bank offers an insurance cover, which covers the customer from fraudulent transactions for up to 24 hours. Moreover, the cover comes free of cost. But you have to also file an FIR to hedge against these frauds. “For claiming insurance on any fraudulent transaction, you have to file an FIR with the police. Then you have to furnish the FIR along with credit card details to file a claim. Once the claim gets validated, it compensates for the fraudulent transaction, says Parag Rao, executive vice president — product, portfolio management and cards, HDFC Bank.
So, if the credit card company doesn’t offer any protection, then it holds the customer liable for any fraudulent transaction. You have to report the loss of the card immediately if you want to play safe. Once the customer communicates to the bank in telephone/writing the customer continues to enjoy zero liability on their lost cards. This means you don’t have pay a single penny if your credit card is stolen and has been subjected to fraudulent practices.

In the US, the maximum liability on the customer is capped at $50 per credit card. As the days pass by, this liability increases to $100 for the second day and $500 for the third day. If you don’t file a complaint with the bank for more than 60 days, then the customer is liable for every fraudulent transaction. However, the possibility of the customer being unaware of the loss for 2 months is very less, say experts.

This is an optional cover. But if your bank offers the cover to protect the lost card against fraudulent use, it is definitely not a bad idea. You will be spending a monthly amount of Rs 100 for saving a credit limit of may be a lakh from being misused. But most big banks are yet to offer this insurance cover. If it still pops out of the wallet, make a quick call and deactivate it. Follow the call with a written complaint and post it to the credit card company.

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Disha Financial Counselling - Review and Approach or Not To

Disha Financial Counselling was setup by ICICI Bank with pressure from the Reserve Bank of India to help and educate loan borrowers. RBI has done an excellent job persuading ICICI since the latter has a huge portfolio of retail loans most of which is sold to consumers without properly educating them about the terms and consequences on default.

We have seen so many people borrowing on their credit cards, personal loans etc for events like the wedding or some other extravaganza, just to maintain their status. Once they have defaulted, the Interest Rate on their loans and Fees shoot up and it simply becomes impossible. Now should you approach Financial Counselor like Disha ?

Disha's main purpose is to help the default customers by extending their loan period or giving them one time settlement option etc depending on the customer profile. Disha counselor discusses your income and expense profile and will patiently listen to your woes. They help you plan your lifestyle until you are out of the debt trap.

What if I am in the worst case secanrio ?    

The counselleor captures every debt / loan you have from a recognized financial institution in India from CIBIL. They have standard documentation format which runs into several pages and you have to carefully read and sign it. This implies you accept you are a defaulter, this is where many fraudulent borrowers who do not have the intention to repay run away.However, assuming you stayed and are willing to Pay what you owe to the banks, Disha will then approach all the banks who have lent you the loans asking for rescheduling and affordable terms so that you hav a second chance. Most banks take long time to reply and some initially ignored Disha. But gradually under pressure from the RBI, banks are helping customers to clear their dues and become current again.

Changing face of Consumer Credit

Credit Card Basics

1. What is a Credit Card ?

A credit card often referred to as plastic money, is a card, which is handy to carry and use for shopping or buying goods and services. You use your card to BUY a pair of shoes. You now owe the credit card company the amount paid at shoe store which will be billed to you, at a regular time interval, usually 30 days. More detaisl available here.

2.How is Credit Card different from a Debit card ?
A debit card is authorized only if their are sufficient funds in the account. While on credit card it depends on the cerdit line the issuing company has provided you. The basic difference is in debit card, you pay your own money and in acse of credit card, the issuing company pays for you to whom you have to pay later.

3.What’s the difference between secured credit cards and unsecured credit cards? Secured credit cards are usually given to those with bad or no credit history. A deposit is made, say Rs5000, which gives the customer Rs500o limit. The customer isn’t allowed to spend more than the amount of the deposit. As the deposit decreases, so does the amount the customer is allowed to “charge”. That’s why these cards are sometimes called prepaid credit cards, or bad credit credit cards(In Western countries, every individual has a credit history, will come to India soon. A person with bad credit history is known to have "bad cerdit") An unsecured credit card is granted to those with a good credit record, because they have a history of paying their bills on time.

4. How are my credit card finance charges calculated?
This is something you need to check out before you apply for a credit card. There are three basic ways finance charges are calculated, and they range from favoring you to favoring them. That’s why you need to know what method they use.

The first method is the Adjusted Balance method, where the balance on your previous statement is added to any charges. Then any payments you’ve made are subtracted, and the result is multiplied by the interest rate. This method is the most favorable for you.

The second method works out fairly even. It’s called the Average Daily Balance method, with charges and payments being added and subtracted as they occur. Then, at the end of the statement period, these charges are averaged, with that average being multiplied by the interest rate.

The other method, which will cost you the most, is called the Previous Balance method. The balance on the previous statement is first multiplied by the interest rate, then your charges and payments are calculated. With this method, in effect, you’re paying interest on the same amount twice.

5.My credit card has been stolen – what should I do?
Stealing credit cards is a huge business these days. Credit card fraud is at an all-time high, with identity theft at the source of most stolen credit cards. The first thing you need to do when you discover you don’t have your card is call your credit card company. They’ll immediately cancel your card so no one else can use it. (Always keep the number to call your credit card company in a safe place)

If you’ve acted quickly, there probably won’t be any changes on it. But if it’s taken a while to realize your credit card is gone, then your identity may have already been stolen, with the criminal making charges in your name.

6. Am I liable to pay for charges not authorized by me because of stolen credit cards ?
This is a tricky question. Some cards put your liabaility at Rs500. Most others don't. They hold you accountable for charges made by others. This is only seen in India. In the US, if you call the company and tell them that your card is stolen, then you have no liablity on fraudalent charges. However, in India, our own financial institutions make their own customers scapegoats and haress them. I strongly object to these practices by Indian banks/FIs along with VISA, MasterCard & AMEX.

7. What’s a balance transfer?
A balance transfer is used as an advertising tool by credit card companies. To persuade you to use their credit card, they’ll offer to pay off any existing cards you have, and add the balance to a new card with their company.

Visa, MasterCard, and American Express, the big three of credit card companies, are constantly competing for your business by offering balance transfers at reduced interest rates.

8.What are pre-approved credit cards?
This is another method credit card companies use to get your business. They get a list from a CRA (credit reporting agency), or employers or Luxury car woners, of people who have good credit records and favorable payment histories(Mobile Bills, Club Memberships etc).
These people have a history of paying their debts, so they become prime targets for pre-approved credit card offers. In effect, that’s exactly what the credit card company’s done – they know you’ll pay, so they’ve already approved your application. And to further entice you, they’ll usually offer you a low interest credit card. But watch that interest rate – it could go back up within a short period of time!

9.Do credit cards have hidden costs?
Generally, credit cards don’t have hidden costs. What they do have is extra charges, such as application fees, annual fees or late fees. Although these fees aren’t hidden, you need to read the entire “Terms & Conditions” that comes with your credit card – all the fine print – to be aware of these charges.

10. Can I get a credit card if I’m under 18?
You can’t legally have a credit card in your name if you’re under 18, but there are other ways to get one. You can get a prepaid credit card, or a secured credit card. Or you can get a parent or legal guardian to get a credit card on their account, with your name on it. That’s a great way to start building a good credit record.

If you’re a student, 18 or over, you can get a student credit card. That’s also a good way to start working towards establishing a positive financial picture.

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Getting the most from your credit cards involves four main steps:

Use your credit cards wisely.

Protect yourself against fraud.

Review your credit history regularly.

Get the right card for your needs.

Use your credit cards wisely

Follow these simple tips to get the most from your card.

Tips:-

Pay your credit card bills on time. This is the single most important thing you can do to preserve and enhance your credit rating. Always pay at least your minimum payment and allow time for your payment to reach the company if you are using the mail.

If possible, pay off your balance in full each month. If this is not possible, then make as large a payment as you can comfortably afford. Paying off or paying down your balance is a sound financial move—one that will save you money on interest charges.

If you can’t pay off your balance in full, then slow down on your credit card use for the next while. Take time to step back and have a careful look at how much you earn and how much you spend each month. A little budgeting can save you big money down the road.

Check your statement carefully each month. Review your statement carefully. Do all the charges look correct? Have any required credits been applied? Are there any unusual or unexpected charges? Your credit card company will correct legitimate errors, but only if you bring them to their attention in a timely manner before you pay your bill.

Transfer your balance to a card with a lower interest rate. If you have two or more credit cards with outstanding balances, consider moving the outstanding balances to the card with the lowest interest rate. You will save money each month and simplify your record keeping by receiving only one bill.

Negotiate for a lower rate with your credit card company. If you have a good credit history, you are a valuable asset to your credit card company. Call them and seek ways to lower your interest rate. This is often possible, but never advertised. If the interest rate you are currently paying is very high, imply you may cancel the card and go with a competitor unless they adjust your rate downward. It doesn’t hurt to ask, and you may be surprised at the results.

Protect yourself against fraud

While credit card fraud is a problem, here are a few simple steps you can take to greatly reduce the risk of becoming a victim.

Tips:

• Sign new cards immediately. When you receive your new or replacement card in the mail, sign it, in ink, right away. If it is a replacement card, destroy the old card by cutting it into many small pieces.
• Shred old credit card receipts. You can purchase an inexpensive paper shredder at an office supply store. All old receipts with your credit card number and any unneeded documents with your social insurance number or other sensitive personal information should be shredded before disposal. This prevents the common practice of criminals going through the trash to find receipts and stealing your identity
• Never fax your credit card number. Your credit card number can lie for hours in the fax basket at the other end. Anyone passing by can record your number and begin to use your card number fraudulently. It is even possible for criminals to intercept your credit card number while the fax is in transmission.
• Use caution when giving your credit card number out on the phone or on the Internet. Only give out your credit card number on telephone calls you initiate to business or organizations you trust. Never give your number out to callers who call unannounced, no matter how legitimate the call sounds.
• On the Internet, look for an Internet address that begins https:\\. The “s” indicates that it is a secure connection and a small padlock symbol should appear in the bottom right hand corner of your screen, indicating it is safe to transmit your credit card number.
• Call your credit card company instantly if you suspect trouble. All credit card companies have 24 hour lost and stolen help lines. If you lose your wallet or purse or have it stolen, call without delay! Much fraud happens within the first hour or two, before the victim realizes the cards are missing. Your credit card company will block your cards from being used and stop you from being responsible for any charges thieves incur.
• Take advantage of any security features your card offers. Many newer cards have the option of including your photograph on the card. This is excellent protection and is highly recommended.

Review your credit history regularly

After you have obtained the best credit card, and are using it wisely, review your credit history on a regular basis. This helps ensure your history is accurate and that any issues have been resolved to your satisfaction.

North America has three national credit-reporting bureaus. Your credit rating is held at one or more of these bureaus. When checking on your rating, be sure to contact all three, as your rating may be held on file at more than one bureau. The three national credit bureaus where you can check your credit report are Equifax, Experian, and Trans Union. Check the Yellow Pages, under Credit to find the numbers in your area.

Get the right card

With all the choices in cards available, chances are good,very good, you can find a better card for your needs. Today’s cards can save you money, offer better features, and even support a cause you believe in. Here are some tips on finding the right card and where to check that you have the best card for your needs.

Tips:

Be alert for companies offering a great interest rate for transferring your existing balance to their card. Usually these rates are only in effect for a short time, often six months. At the end of this time, the rate can revert to a much higher permanent rate. Keep your eye on the Annual Percentage Rate (APR); this is the figure that counts in the long run.

Lower is better: read the fine print and find the Annual Percentage Rate (APR). This is the interest rate the companies charge you if you carry a balance. You want the lowest rate possible; as each percentage point drop will save you money on the months you have an outstanding balance.

Nothing can be better: Try for a credit card that does not charge an annual fee. Many credit cards charge you a fee each year to use their cards. While this may be offset by other benefits the card may offer, you can find cards that do not charge this annual fee. Why pay for the privilege of using a credit card when you don’t have to?

Explore the options: Today’s cards offer a wide range of excellent features, including frequent flier points, programs that bank points toward a new car, and cards that support charitable organizations. Other options worth having include car rental insurance coverage, trip cancellation coverage, and extended warranty coverage.

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