Preventing credit card fraud
By SRIWIPA SIRIPUNYAWIT
Srifah recently looked at her monthly credit card statement and her heart almost skipped a beat at the sight of a 150,000 baht expense that she never spent.
In another part of town, Sompong almost fainted when he put his ATM card into the machine and realised that his savings account was wiped clean.
Both Srifah and Sompong are victims of financial crime.
ATM and credit card fraud problems have long been one of the bank's most-concerned issues.
Somchai Pichitsurakij, chairman of the fraud working group Credit Card Club, said that the fraudulent transactions caused a total loss of $21 million in 2005, $34 million in 2006 and $24 million last year.
In 2006, of the total loss, 70 per cent was caused by counterfeit credit cards, while another 18 per cent were lost and stolen cases. In 2007, 65 per cent were counterfeit cards and 18 per cent were lost and stolen cases. Of the total, 80 per cent of victims were foreigners or tourists, while the remaining 20 per cent were Thais.
However, according to Somchai, the amount of loss has sharply reduced after the switching of non-microchip to microchip-embedded cards.
According to Kattiya Indaravijaya, first vice-president at Kasikornbank, fraud problems have greatly dropped when the bank started to use microchip cards. Since the beginning of the year, a total of loss caused by credit card frauds dropped to less than two million baht.
The reason is that the microchip-embedded cards makes it much harder for criminals to steal information, which is stored in the microchips.
"And by the end of this year, almost 100 per cent of all bank's credit cards will be microchip-embedded cards, except some of the co-brand cards," Kattiya explained.
However, criminals have started to use different methods to commit credit card fraud. For instance, they apply directly for a credit card through identity theft, using fake identification cards and documents.
"More and more criminals are resorting to this method as they are finding it difficult to use their old methods because of the microchips," she said, adding that all cardholders must be more cautious particularly during economic turmoil. "We have detected the rise in this type of crimes whenever the economy starts to fall."
Pongsit Chaichutpornsuk, senior vice-president and head of fraud management division at Siam Commercial Bank, said that though credit card fraud is on the decline, problems with ATM cards continues to rise.
"ATM cardholders should be cautious, particularly when they are withdrawing money. They should use their hands to hide the keys being pressed when entering their PIN number," he said.
According to Somchai, fake cards are usually used at gold and jewellery shops, discount shops and travel agencies. Most fraudsters are from transnational crime networks.
"Members of these gangs always travel from one country to another to commit the fraud. When one country implements tighter policies and monitors the problems, they will move to the next country," Somchai explained.
How they do it
- There are several ways to commit fraud
The simplest way is to steal a credit card and use it to buy as many goods as possible and as quick as possible before the owner realises and cancels the card.
Another way is to steal the information stored on the card's magnetic strips by using skimmers and make a counterfeit card. Basically, fraudsters will install the skimmers at shops, shopping centres or gas stations. And when the cardholder hands the card to the vendor, he or she will swipe the card on the skimmer in which will save all the holder's information. Then the fraudsters can use it to make a counterfeit card.
Sometimes the fraudsters may use other electronic device such as wire-tapping to tap information of the cards while it is being used.
Moreover, some apply directly to the bank for credit card's approval with the use of fake pictures, identification cards and other information.
For an ATM card, the fraudsters will steal the information stored on the cards' magnetic strips and pin codes with the use of a card skimmer that is installed in the ATM's card insertion slot on the machine.
They may also install a small camera above the ATM's keypad to capture the pin code of the cardholder.
- Do victims have to pay?
According to Somchai Pichitsurakij, chairman of Fraud Working Group at Credit Card Club, the victims do not pay for transactions they don't make. As soon as they receive the credit card statements and notice unusual transactions, they must report it to the bank that has issued the card.
The banks will investigate the case and the banks will be responsible for the loss, not the cardholders.
However, the case will be different for lost or stolen cards. The cardholders will be responsible for the transactions made before they call to cancel the cards. But the banks will be responsible for the loss after the holders call to cancel the cards.
Therefore, it's necessary to notify the banks as early as possible.
-Advice to cardholders
To protect yourself from the possible fraud problems, advice from the experts:
- Cross all the copies of your personal documents such as a copy of identification card, house registration, passbook and the like and verify the purpose or objective of the use of these copies. For instance, you may put something like "This document is for the bank X's credit card application only."
- Always avoid using black-ink pens whenever you cross and verify the copies of your personal documents. Black ink makes it harder for bank officials to distinguish the original from photocopied documents.
- Never keep your credit card or ATM card in the same place with your pin code. Separate them. Keep the pin code in the safe place where nobody knows.
- Always keep a close watch whenever you hand your credit card to the vendors to make transactions. The best thing is to follow the vendors or the salespersons who have your card and have a close watch when they are operating the transactions.
- Try to switch to the microchip-embedded credit cards in order to obtain higher protection.
- Examine the ATM before you insert your card into a slot. It's not impossible to notice the skimmer device if it is installed in the insertion slot. Don't use the ATM that seems to have anything odd.
- Cover up your pin number while you're pressing on the ATM's keypad to avoid being tapped if the camera is hidden.
- Whenever you're shopping online or trying to make online payment, make sure you're on the high security web site and reliable e-payment channel.
- Notify the bank as soon as you notice something unusual. The sooner, the better.
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