In FY2020, fraudulent transactions in India were estimated at Rs.1.85 trillion, which was more than double the value when compared to the previous year. With the ever-increasing number of online fraud cases, individuals need to enforce precautionary measures to prevent these instances. Otherwise, they may end up losing a significant portion of their savings.
Before proceeding to fraud prevention tips, one must know about the common techniques employed by fraudsters. Knowledge about such systems can help one be on a better guard against them.
Common credit card and debit card scams
The following are some of the ways in which your credit and debit card credentials may be compromised, leading to substantial financial loss.
- ATM skimming
In such a procedure, scammers collect credit and debit card data from an ATM machine directly. For this data collection, specialised equipment, known as ATM skimmers, is used. These machines are fitted over the card reader, thereby acquiring electronic data from a user’s card when swiped.
In some cases, fraudsters may spy on cardholders while they key-in their PIN on an ATM machine. They can hack the CCTV cameras present inside the kiosk to collect this data. Alternatively, they may place a camera of their own somewhere near this machine to steal the code.
- Scam calls to acquire sensitive data
To conduct online fraud, a scammer may pose as a representative from your financial institution. In these calls, the fake representative will encourage users to reveal the card number, PIN and other confidential details. If a cardholder is gullible enough to state them, the scammer can access his/her accounts and transact without any restrictions.
- OTP sharing
While transacting online, cardholders may get a phone call asking them to divulge the one-time password or OTP for the said transaction. Sharing this OTP may allow fraudsters to divert the payment from the e-commerce website to their own accounts. One of the basic steps for fraud protection is to avoid sharing such passwords.
A Wallet Care insurance policy provided by Bajaj Finserv under its Pocket Insurance & Subscriptions can help safeguard against financial losses arising from such unlawful transactions. It can keep one free from the risk of online fraud.
Apart from such insurance plans, individuals also need to keep a few things in mind when transacting online to ensure data protection.
How can you protect yourself from online fraud?
If you do not want to face unforeseen financial losses due to fraudulent activities, here are some tips to follow –
- Do not take calls from suspicious numbers
Using caller ID applications, it is possible today to predict whether a particular call is from a reliable source or scammers. If it is the latter, you should avoid attending such phone calls or texts. Even if you mistakenly pick up their calls, never divulge any personal or financial information.
- Avoid phishing emails
Even though email accounts have an integrated feature, which marks certain emails as spam, some phishing mails may still reach your inbox. Do not open such suspicious mails or click on links inside them. Doing so can lead to leaks in card credentials through malware. Individuals who own a fraudulent charges cover can recover financial losses because of such internet banking fraud.
- Avoid using cyber cafes or public terminals for online transactions
One of the types of internet fraud relies on pulling your card credentials from the public computers you use. While most individuals believe that logging out from their internet banking profile safeguards them from hacking or fraud, scammers can still access their card or account details. Remember that computers store the record of all activities at various places, which are known to such fraudsters.
- Change passwords after regular intervals
Keeping internet banking passwords constant for a significant period can be dangerous. Hackers with access to your password can keep accessing your account until you change it. Thus, one of the safest ways to reduce the risk of online fraud is to keep changing passwords for all your financial accounts.
- Block your lost or stolen cards immediately
As soon as you notice a misplaced or stolen credit/debit card, report it to the issuer. Doing so will ensure immediate card blocking, preventing further transactions from the same. Next, an individual must also file an FIR at the nearest police station. Following these steps can limit the chances of suffering from financial loss due to unlawful transactions.
Besides the online protection, opting for an ATM safeguard insurance plan can ensure financial safety in case of frauds at these kiosks. Policyholders can claim reimbursement based on the amount they lose due to such unfortunate incidents.