Credit card frauds became wide-spread a few years back, when the banks went on overdrive to provide credit cards to just about anybody with an income. It included many who were not too familiar with financial transactions and were the prime targets of fraudsters.
The most common modus operandi are where the target receives a phone call from the bank executive and they ask the target to reveal his credit card details either for verification purpose or other service purpose. These details were then used to do unauthorised transactions.
Other forms of fraud included fishing, where fraudulent emails(which looked very authentic) were sent to unsuspecting targets and attempts to extract their credit card details. Other high tech frauds include cloning machines installed in ATMs, or vendor machines. Whatever may be the fraud, the end result is to use the credit card details to do un-authorised transactions.
Thus most banks have come-up with 3D security concept. In fact, this should be one of the most important criteria based on which you should select which bank to apply for credit card.
The 3D security concept basically means that there is 3 layers of security for any transaction to be done using credit card. In other words, there are 3 steps of verification that is required for a transaction to be completed.
When using the credit card physically on the vendor’s machine, the first level of security is the card itself. Which means, to be able to do the transaction anyone must first have the card physically. So, if you do not lose your card, chances of fraud become less.
The second level of security is the PIN code that needs to be entered to complete the transaction. This means even if you have lost the card, no one can use it unless they know the PIN. This gives another level of protection.
The third level of security is mobile alert. As soon as the transaction is done a mobile alert is sent to the valid customer. Thus even if anyone has been able to use the credit card unauthorised, the valid customer gets to know of it immediately and take prompt action. In fact, in some banks if you immediately alert them of a fraudulent transaction, they immediately reverse the transaction, thus saving you from wrong billing.
Similarly, there are 3 levels of security while making online transaction as well. However, the security is little less effective. When doing online transaction, you first need to enter the card details. This includes not only the card number but also other info like expiry date and cvv code. This is supposed to be the first level of security as to do so one needs to have the card with him. However, a fraudster can easily copy these details, even if they get your card for a short time eg when you give your card to the waiter to pay your dinner bill, you don’t know if he is copying down your details or taking a snap on this mobile phone.
The next level of security is the OTP that the bank sends to the valid customer. This is probably the most useful security tool as customers normally keeps the mobile with them at all times. The third level of security is the transaction alert, which is same as already discussed above.
To summarise, the banks have a tricky job to balance the security aspect without making usage of credit card too inconvenient to the customer. It thus puts a lot of responsibility of the safe-keeping on the customer himself. As long as you are careful whom you are giving your card to and not disclose the PIN, you are reasonably safe when it comes to credit card fraud.
Hope you found this review useful.