Online fraud and cash economy

Card issuers need to come up with a better way of preventing fraud but until then, caveat emptor
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First Published: Wed, Feb 06 2013. 04 23 PM IST
The latest RBI data on credit cards put them at 18.67 million in November. Photo: Thikstock
The latest RBI data on credit cards put them at 18.67 million in November. Photo: Thikstock
Updated: Wed, Feb 06 2013. 04 23 PM IST
Credit card frauds are on the rise. This when the Reserve Bank of India (RBI) is keen on encouraging people to use less cash and employ electronic transfers besides payment methods such as credit and debit cards. It’s easy to see why—this allows cash flow to be tracked and should make it less easy for unaccounted money to wash through the system.
According to media reports, credit card issuing banks in India have seen Rs30 crore of unauthorized transactions by an international syndicate in the last two months. According to RBI data, at the end of March 2012, there were 17.65 million credit cards with spending totalling Rs96,613 crore. The latest RBI data on credit cards put them at 18.67 million in November. Spending, obviously, has only increased. But card fraud discourages the use of plastic even as banks are at pains to explain that frauds take place with as much regularity in the offline world as well.
No amount of convincing, however, will prevent the likelihood of more electronic frauds being reported at a time when the popularity of tablets, Internet-enabled feature phones and smartphones is surging. Besides the speed at which such crimes take place, as unnerving is their scope.
For instance, in November, the Australian Federal Police busted a gang of Romanian credit card hackers who had allegedly made off with half a million credit card numbers in Australia. On 4 February, a Dutch hacker was sentenced to 12 years’ imprisonment for trafficking 100,000 credit cards in the US.
Prevention, to the extent possible, seems to be better than cure. Users should run and update anti-virus scanners on their mobile devices regularly, besides changing passwords regularly and making them more complex than the usual, hackable combinations. They also need to be aware of phishing expeditions, skimmers, cloning devices and keystroke loggers that track bank accounts, credit card numbers and passwords.
In short, criminals are prepared to go to extraordinary lengths to part an account holder with his or her hard-earned cash. Card issuers need to come up with a better way of preventing fraud but until then, caveat emptor.
How can online payments be made more secure? Tell us at views@livemint.com
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First Published: Wed, Feb 06 2013. 04 23 PM IST
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