Card skimming an epidemic!!!

A complex urban lifestyle has made technology advancement to ease the effort and time for carrying day-to-day activities in a busy schedule. Days have gone, when users use to carry a physical form of money for daily needs. Now, users are spending more time online for transactions and other payment related activities. This has lead to another form of fraud associated with cards i.e. skimming which may be described as creating an illegal replica copy of legitimate cards (Credit/ATM).

The scammers try to steal your identity details from the magnetic strip of card, so they can access your accounts and later propagate identity fraud. This may affect mass user community if planned and execute in public places like ATM booths. Fraud transactions are launched outside the boundaries which make even more difficult to enforce stringent laws.

Let’s understand how this is achieved by hiding fraud setup in the actual device of ATM -

Indian Banks are facing a tough situation as Card Skimming has led into a Massive scam and transactions occurring outside Indian Borders (like Mexico, Spain, and United States etc.) have led these financial institutions to face a loss up to Rs 30 Crore in the last one month. ICI Bank, Citibank, SBI Cards and Axis Bank. In fact, Union Bank has also requested some account holder to re-issue the card to mitigate risk raised by Visa.

RBI has already enforced some strict guidelines for the banks to established OTP as a second form of authentication which only users know.

Now, how did this Fraud happen? Fraud is executed by masking or copy the Victim card from the Transaction machine (Petrol Pumps, POS usage), ATMS, other Credit card agencies. Later it’s very easy to use for shopping and other transactions within and across the world.

How to Overcome

RBI made it mandatory to install EMV / Chips on the Cards and upgrade all Merchant Card Processing units to accept Chip-based cards only starting from July-2013.

Some alternative solution can also be implemented to minimize the fraud by enabling transaction approval over the registered number thru SMS. The owner of the card needs to approve the transaction by trying Yes/No. The user can immediately notify the branch if he received any approval notification for the transaction he has not performed.

Till the upgrade, users’ needs to be more careful while using cards and follow some standard checks during transactions 

Warning signs

• A shop assistant takes your card out of your sight in order to process your transaction.
• You are asked to swipe your card through more than one machine.
• You see a shop assistant swipe the card through a different machine to the one you used.
• You notice something suspicious about the card slot on an ATM (e.g. an attached device).
• You notice unusual or unauthorized transactions on your account or credit card statement.

Protect yourself from card skimming

• Keep your credit card and ATM cards safe. Do not share your personal identity number (PIN) with anyone. Do not keep any written copy of your PIN with the card.
• Check your bank account and credit card statements when you get them. If you see a transaction you cannot explain, report it to your credit union or bank.
• Choose passwords that would be difficult for anyone else to guess.