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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 Delhi and part of an international racket in
which hundreds of genuine US credit card holders were skimmed to churn
out an assembly line of fake plastic. The mastermind behind the racket
was a New York-based Pakistani national called Fahad. Chaddha and his
friends were running his backroom operations in Mumbai and had colluded
with a grocer and travel agent to fabricate bills to siphon off over Rs
1 crore from bank accounts of 80 card users in the US. Indian banks are
also suffering: Citibank Rs 30 lakh, Canara Bank Rs 50 lakh, Bank of Baroda
Rs 60 lakh...
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CLEAN SWIPE
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CARD
SHARP: Mathew made purchases worth Rs 15 lakh on stolen card numbers
Clean swipe
LOST/STOLEN CARDS: The most common cause of card frauds.
POSTAL/MAIL INTERCEPT: Card criminal intercepts the new or renewed
card issued to cardholder and misuses it.
MAIL/TELEPHONE/INTERNET ORDERS: Fraudulent transactions in which
a cardholder's credit card number is quoted by an unauthorised person
to make purchases or use services.
COUNTERFEIT/DUPLICATE CARDS: Cards with counterfeit card association
logos, holograms with valid names, account numbers and encoded data.
MULTIPLE IMPRINTS/SALES DRAFTS: An unscrupulous trader generates
multiple imprints of your legitimate card submitted for payment
in his premises. The subsequent sales slips could be used to put
fraudulent charges on your card or are sold to other retailers.
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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 US hotel. For over
a year, he used the credit card numbers of US-based customers to import
lingerie and sports shoes worth Rs 15 lakh from e-commerce chains before
a foreign bank informed the local police.
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 India. The study pegs the
average loss per card at Rs 60,000 per annum and for ATM cards at Rs 30,000.
It estimates that 2 per cent of the Indian credit card base, or two of
every 100 persons owning a credit card, become victims of fraud at one
time or the other.
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 India to clients
in Madhya Pradesh. The cards were then sold to friends who bought computers,
clothes, refrigerators and mobile phones worth Rs 1.25 lakh. In August
2000, Delhi-based businessman Mohanjeet Singh applied for a Citibank ATM
card. The card was reportedly sent to him by post from the bank's headquarters
in Chennai but didn't reach him. It was intercepted and used by criminals
who in a series of rapid-fire cash withdrawals from various ATMs sucked
Rs 17.5 lakh out of Singh's account over 10 days. The culprits are yet
to be identified, let alone arrested.
"Going by the experience of developed countries,
card fraud in India will soon be an industry in itself," says CCMC's
Chief Consultant Vijay Mehta. "The bigger the bank, the bigger the
card base and the more vulnerable are customers." Card companies,
however, are circumspect. They have a clientele of over 50 lakh credit,
debit and ATM card users, a figure growing by an impressive 22-25 per
cent annually. That is, every year 10 lakh card holders join the legion
of plastic users. The growing crime, the industry fears, could act as
a major deterrent. "It inhibits card usage by customers who have
had a bad experience," admits Citibank spokesperson Madhulika Gupta.
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