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CRIME: CREDIT CARD FRAUD
High Risk Factor
How vulnerable
is a credit card holder to fraud? As vulnerable as he lets himself to
be. He can count himself in the high-risk group if he leaves his cards
lying around, doesn't bother to scrutinise his monthly statements and
freely parts with the card number to anyone asking for it on the phone
or the Net.
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| CARD SHARP: Mathew made purchases worth Rs 15 lakh
on stolen card number |
That's one side of it. There's also porous technology
and the lack of legal safeguards to contend with. Most foreign banks claim
they have the technology to detect card fraud. Standard Chartered, which
has over 10 lakh customers in India, has a system which pinpoints abnormal
attempts on a credit card. "We send out an advisory to the customer
if we see him buying say 10 shirts or indulging in low-denomination transactions,
usually done by card criminals to check the card's validity," says
Shyam Srinivasan, head of the credit cards division, Standard Chartered.
Citibank too boasts of a similar check system. But it is obviously not
enough. Neither bank will reveal the losses they suffer from card fraud,
preferring to call it "well within globally acceptable norms".
While multinational banks can afford to absorb
the hits-at the current levels at least-many Indian public-sector banks
have shied from entering the technology and volume-driven card industry.
Some fight fraud by maintaining modest user levels and thus bypass the
sophisticated technology required to protect huge card bases.
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| EXPOSED: Chaddha (in red shirt) with six others
arrested in Mumbai |
Taking note of the growing foul play, however,
the Reserve Bank of India recently issued a circular advising all major
Indian banks to set up internal control systems and participate in fraud-prevention
task forces to formulate stringent laws. At present, whenever a fraud
is detected it is registered as a case of cheating under Section 420 of
the IPC. But that's more of a formality. With no fool-proof protection,
victims of fraud often find themselves helpless. While their liability
to pay up is reduced if the theft of a card is reported in time, there
is little they can do in other cases. Rajesh Dalvi, an executive with
a Mumbai TV software firm, for instance, wanted to protect himself from
fraud. He asked Standard Chartered for a photo credit card. A bank "representative"
came to his house one evening to collect his old credit card and do the
needful. Within a week Dalvi was slapped with a bill of Rs 18,000 for
shopping he hadn't done. Dalvi had no option but to pay up. For bitter
cardholders like him, credit is a taboo word now. At least till technology
and legislation to tackle plastic crime are fully in place.
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