One of my acquaintances, running a travel agency, would frequently use his credit card to pay for his bills in shops and restaurants. He would always use his credit card at refuelling stations. In fact, he was so enchanted by the credit card usage that he would always act as an ambassador for credit card of his bank and would never lose an opportunity to suggest his friends, nears and dears to own one. For him cashless transactions  through credit cards or debit cards is a huge advantage, as these transactions are most convenient for card holders and mitigate several risks associated with carrying cash like chances of having a fake currency note etc.

One fine day, I found him upset. When I asked him about the cause of anxiety, he narrated a shocking tale. ‘These plastic cards are risky,” he said. Basically he had gone to Delhi on a business trip for a month or so and as usual paid for most of his bills through credit card. A few days back he received his credit card statement at the end of the month from his bank and was shocked to see his spending figures had almost doubled and there were transactions which were not done by him.
 
He approached his bank to file a complaint against the ‘wrong billing’. But there he realised that his card was being clandestinely used by someone else. In a state of frustration, he had argued with bank officials on the plea that he had not shared his credit card with anybody else. Evidently, my acquaintance was a victim of credit card cloning. Even as he was frequently using his plastic money to pay for his bills, he was least knowing about the kind of frauds associated with credit or debit card. Normally, cardholders are known to a plastic money fraud, when someone steals the card and PIN and operates it clandestinely to get through financial transactions. But making purchases through a credit card by someone else when the card is very much in your wallet is really shocking. And that is what had happened with my acquaintance.

How does it happen? It is through cloning - a process in which production of an exact copy of an original thing is done. Even as credit card theft itself is not new, the card cloning, which is also known as skimming, is a new technique whereby someone obtains your credit card details, copies them onto a bogus card and begins using the credit card. Now the question is how the information is stolen, when the card is in possession of a cardholder. Normally it has been seen that most of the time individuals working as salesman at business establishments or wait staff are often prime targets of the gangs that are involved in cloning or skimming of card. Notably, these individuals handle the sheer volume of credit cards at their respective work places.
 
How do they steal the credit card information? In the recent past many gangs involved in cloning of credit cards were busted by the police in different parts of the country and it was found that these individuals clandestinely swipe customers’ credit cards through a pocketsize device containing a scanning slot. This pocketsize device resembles a pager and can normally be worn on a belt. Because the process takes only a few seconds it can be done easily and inconspicuously without the customer or any other employee noticing it. Swiping the credit card through the device copies the information held on the magnetic strip into memory. That information is subsequently copied to a counterfeit credit card, complete with security holograms.

One should be very careful while paying for a bill through the credit card even at a shop. There have been instances that while passing on the card to the shopkeeper to swipe, he after swiping it on a Point of Sale (PoS) machine to adjust payment against his bill, clandestinely swipe it in the skimmer device which most probably will be placed near to the PoS device. This is here the cardholder fails to notice the mishandling of his card by the shopkeeper. On swiping in the skimmer device, all the necessary details on credit card will be revealed. The information is got and a new card is cloned with these details. So be alert and keep your eye on the card while it is being swiped on the credit card device at a merchant establishment. Precisely do not look anywhere when you handover your credit card for swiping.
 In India, with rapid increase in usage of plastic money, the problem has been more widespread than it was assumed to be. It is pertinent to mention here that credit card cloning has been quite rampant not just in the Delhi but in various metros, where plastic money is used in mass scale. People have been robbed of crores of rupees by cloning their credit cards across the country. Some recent cases of skimming gangs being busted is a proof of this. Two months back, an MBA graduate was held in Gurgaon for cloning cards. He allegedly stole data from 35 cards, duplicated three of them and did shopping worth Rs 3 crore.

With weak cyber laws in place, it is impossible to eliminate this style of fraud. But there are certain dos and don’ts which are simply precautionary measures against this kind of fraud. If you have applied for a credit card, ensure that it is delivered to you in a sealed enveloped. If the envelope is already opened or is tampered with, don’t accept it. There are more chances that the card could already have been cloned before the delivery. You must always be alert when your card is being swiped for payment. It can reduce the chance of card being put through a skimming machine. After making payment through your credit card, you receive credit card statement from your bank. Here again be careful and don’t just glance through the statement. You must look through each transaction carefully to spot illegal usage, if any. Last but not the least. Be careful when disposing of bank statements and credit card receipts. There are instances where criminals have obtained card information from these statement and receipts, as the card holder had disposed of these papers in dustbins.

Meanwhile, J&K Bank has asked the merchants using JK Bank PoS terminal to exercise extra caution and due diligence while accepting cards against sale proceeds. Merchants have been advised to invariably ask for certain documents from the card holder before swiping the card on POS terminal. If the cardholder is a foreigner, the merchant must ask copy of passport. In case of domestic cardholders, the merchants must ask for copy of Election Photo Identity card, PAN Card or driving license. Besides, merchants must examine the physical appearance of the card presented for payment and ensure that embossing on the card is clear and straight; four printed numbers match with first four embossed numbers and signature panel bears repeated words like ‘VISA’ on blue and gold or ‘Mastercard’ in pink, yellow and blue in angular form.

To ensure fair transaction and avoiding cloned card, it is of utmost importance that the merchants match the signature of the card holder on the charge with those on the Passport/ Identity Card. Moreover, they should accept single swipe for all transactions so that tech savvy alerts go to the original card holder.

(The views are of the author & not the institution he works for. Feedback at sajjadbazaz@greaterkashmir.com)

Lastupdate on : Sun, 4 Jul 2010 21:30:00 Makkah time
Lastupdate on : Sun, 4 Jul 2010 18:30:00 GMT
Lastupdate on : Mon, 5 Jul 2010 00:00:00 IST