se anything but without money we cannot purchase. Past time money as a kind of paper only. Now day’s money very different kind. We know as a plastic money and use it. http://www.
blurtit. com/q216104. html Plastic money are the alternative to the cash or the standard ‘money’. Plastic money is used to refer to the credit cards or the debit cards that we use to make purchases in our everyday life. Plastic money is much more convenient to carry around as you do not have to carry a huge some of money with you.It is also much safer to carry it along or to travel with it as if it is stolen one can consult the bank whose service you are using and get it blocked hence saving your money from getting stolen or even lost. http://www.
rediff. com/getahead/2007/jul/27cards. htm A credit card is plastic money that is used to pay for products and services at over 20 million locations around the world.
All you need to do is produce the card and sign a charge slip to pay for your purchases. The institution which issues the card makes the payment to the outlet on your behalf; you will pay this ‘loan’ back to the institution at a later date.A credit card is an electronic, small plastic card issued to users as a system of payment which allows its holder to buy goods and services based on the holder’s promise to pay for these goods and services but pay for them at a later date.
When you buy something using a credit card, the credit card provider pays for your purchase. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. History of credit cardThe credit card market in India, which started out in 1981, is on the verge of an unprecedented boom. Between 1987 and 2000, the market has virtually grown to over 3. 8 million cards with almost 25-30 per cent growth in new card-holders. The credit card embodies two essential aspects of the basic banking function – the transmission of payments and the granting of credit. Therefore, in its true sense, a ‘credit’ card must offer the opinion of revolving credit.
This is very akin to the overdraft facility offered by banks to their account holders.A credit card holder does not necessarily have to settle his entire account at the end of the month for he has the option to make partial payment in subsequent months. In fact, when the card-holder makes the full payment at the end of the month he is said to be using his credit card as a ‘charge card’. Incidentally, the interest paid by the card-holder on the ‘credit’ utilized by him is what makes the business of credit cards profitable from the point of view of the bank issuing Basic information about credit card (http://www. buzzle.
com/editorials/12-6-2004-62590. asp)A credit card is a small plastic card with some numbers embossed on it and which helps to purchase the things with no requirement of cash in pocket. It is 3-1/8 inches by 2-1/8 inches in size and has identification information for example a signature or picture. It permits the person named on it to charge purchases or services to his account charges for which he will be billed periodically. This information is checked where we use it for example by automated teller machines (ATMs), store readers, Internet computers and banks. What is credit card- Front sideReverse side http://en. ikipedia. org/wiki/Credit_card) (http://www.
bustathief. com/credit-card-fraud-how-do-they-do-it/) 4 An example of the front in a typical credit card: 1. Issuing bank logo 2. EMV chip on “smart cards”( Europe , MasterCard, and Visa = EMV) 3. Hologram 4. Credit card number 5. Card brand logo 6.
Expiration Date 7. Card Holder Name 8. contactless chip An example of the reverse side of a typical credit card: 1. Magnetic Stripe 2.
Signature Strip 3. Card Security Cod What is EMV- EMV is the standard defining how to handle debit and credit card transactions based on chip technology.This standard, and the certification processes linked to it, will guarantee worldwide different for financial smart cards.
EMV migration is a common move for the whole banking sector, strongly supported by the international payment schemes Visa, MasterCard and American Express. http://answers. yahoo. com/question/index? qid=20090614105343AAFxc3V What is Hologram – Hologram is a photographic image that is three-dimensional and appears to have depth. Hologram doing the work by creating an image composed of two superimposed 2-dimensional pictures of the same object seen from different reference points.
http://www. isegeek. com/what-is-a-hologram. htm What is Magnetic stripe card – A magnetic stripe card is a type of card capable of storing data by modifying the magnetism of tiny iron-based magnetic particles on a band of magnetic material on the card. The magnetic stripe, sometimes called swipe card or magstripe, is read by physical contact and swiping past a magnetic reading head.
http://en. wikipedia. org/wiki/Magnetic_stripe#Financial_cards What is Card security code- Card security code (CSC) is a security feature for credit or debit card transactions, providing increased protection against credit card fraud.Sometimes it is called Card Verification Data (CVD), Card Verification Value (CVV or CVV2), Card Verification Value Code (CVVC), Card Verification Code (CVC or CVC2), Verification Code (V-Code or V Code), or Card Code Verification (CCV). http://en. wikipedia. org/wiki/Card_Security_Code What is Bank Identification Number (BIN) These numbers identify parts of both credit cards and merchant account numbers. Visa/MasterCard assigns unique, identifying numbers to each member acquiring or issuing bank.
Type of credit card and issuer – (http://www. economywatch. om/india-credit-cards/types/) In the India many types of credit cards being provided by banks and financial institutions. These cards provide a wide variety of financial benefits to holders. Following are some types of credit cards available in India:- India Credit Cards http://www. economywatch.
com/credit-card/ Types of credit card: Premium Credit Cards, Cash Back Credit Cards, Gold Credit Cards, Airline Credit Cards, Silver Credit Cards, Business Credit Cards, Balance Transfer Credit Cards, Co-branded Credit Cards, Low Interest Credit Cards, Lifetime Free Credit Cards and Rewards.The Rewards credit cards may be subdivided into Points, Hotels/Travels, Retail, Auto and Fuels cards. Issuers Major issuers: American Express, HSBC, ANZ, Macquarie Bank, Aussie, NAB, Bank West, St George, Bank of Queensland, Suncorp Metway, Citibank, Westpac and Commonwealth Bank. The major credit card providers in India are ABN Amro, HDFC, American Express, ICICI Bank, Axis Bank, SBI, Bank of Baroda, Canara Bank, Citibank, Visa, HSBC, MasterCard, Deutsche Bank, Amex, Barclays Bank, Diners Club, Standard Chartered and Kotak Mahindra Deferent between credit card and Debit card-Credit card: The name it also define the meaning of it. It will be provided to the person who is eligible to get credit by the financial institutions and banks. We can get credit through this card. It is a liability.
Debit card: It can be useful when our bank account has sufficient funds at the time of using it. Instead of cheques we can use this card to with draw our money. It is asset. http://www. allinterview. com/showanswers/66620.
html Numbering of credit card- (http://www. transactmoney. com/transaction-articles/accept-credit-cards-online. htm) example we will use a MasterCard.
A Credit Card usually has 16 (some visa’s have 13) numbers embossed on their front, and every card has a BIN code. The BIN CODE is the first 6 digits of a credit card: (http://www. bustathief. com/credit-card-fraud-how-do-they-do-it/) * The first 4 digits stay for the country and credit card company * The 5th digit stays for the credit card type (debit card, gift card, credit card) * The 6th digits reveals if the card is a partnercard, secondcard, company card… * The remaining digits stay for the account number, with the last character being the check-digitNumbering of credit card is the primary account number. Purpose of this number is identification of user. Usually it denotes the particular banker and some sort of identity is also given for the individual customer on the basis of his locality or any other relevant factor that the bank considers fit. Whenever a customer loses his credit card he must inform the bank and quote the credit card number, so that the bank can block all further transactions until the credit card is given to the owner or a new one is issued. Function of credit card- ( http://www.
transactmoney. com/transaction-articles/accept-credit-cards-online. tm) Credit cards are not available to all those who maintain an account with the bank. They are available only to people who apply for these services and only after the bank approves to entertain the customer the same. When a customer swipes a credit card the merchant has to check three areas simultaneously before deciding to accept credit cards online.
Those functions are performed by the equipments like cart software and credit card processor. Initially it checks if the customer is the legitimate and genuine owner of the credit card (this is done by checking the details of his account).Then it checks if the customer is having sufficient funds in the account and also clarifies if he is eligible to operate the funds for the said purpose of buying goods on credit from the banker. Only then the merchant will accept credit cards online. ( http://www. creditcardratinginfo. com/) When a purchase is complied, the credit card user agrees to pay the card issuer. The cardholder indicates consent to pay by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a personal identification number (PIN).
Many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a card not present transaction (CNP). Electronic verification systems allow merchants to verify in a few seconds that the card is valid and the credit card customer has sufficient credit to cover the purchase, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or point-of-sale (POS) system with a communications link to the merchant’s acquiring bank.
Data from the card is obtained from a magnetic stripe or chip on the card, the system is called Chip and PIN . United Kingdom and Ireland, and is implemented as an EMV card. For card not present transactions where the card is not shown (e. g. , e-commerce, mail order, and telephone sales), merchants additionally verify that the customer is in physical possession of the card and is the authorized user by asking for additional information such as the security code printed on the back of the card, date of expiry, and billing address.
http://en. wikipedia. org/wiki/Credit_card What is Virtual Credit Cards- http://www. economywatch. om/credit-card/virtual. html A virtual credit card is a disposable payment card that can be used to make purchases or payments over the Internet. These cards provide protection to cardholders, since the user is provided a new credit card number every time s/he makes a purchase on the Internet. This is why this card is sometimes also called the “single-use card numbers.
” Virtual Credit Card: Features although a virtual credit card is very similar to a regular credit card, it has several distinguishing features, such as: * It works like a prepaid card, where the credit limits equals the amount you want to be available on the card. A new credit card number is issued every time a cardholder wants to make a purchase. Thus, there is no possibility of your credit card being used fraudulently. * Cardholders can set the monetary limit and the expiry date for their virtual cards. While the virtual number of a card is linked to a real credit card number only the cardholder has the knowledge of this information. What is Secured Credit Cards- (http://www.
transactmoney. com/transaction-articles/accept-credit-cards-online. htm) Secured credit cards are usually preferred by persons whose credit statements are not noteworthy and those who want to rebuild their credit.
A cardholder under this scheme will be required to pay an amount for availing the credit card. It should be understood that in a regular credit card an account holder is not required to pay any amount as most of them are issued at free of cost to the account holder and even if they are charged they are priced nominally. If the secured credit card holder does not pay his dues to the banker he has two options. Like any other credit card holder he can ask the banker to accumulate the interest or follow other penal actions as the case may be. Another option is requesting the banker to make adjustments from his eposits so and thereby not take any penal actions. The second option has different consequences. If the customer does not clear the subsequent dues the banker will be forced to withdraw money from the deposit amount.
Finally the customer will have no money left in his deposit. Therefore it is not desired to follow the second alternative unless the customer is able to repay the deposit at the earliest or unless it is unavoidable. Advantage of credit card http://www. pbs. org/opb/electricmoney/teaching_guide/eMoney_Lesson_two. pdf Credit Cards as Transactions Medium-Credit card is also a transaction medium in many situations.
It translates the money anytime anywhere, where the card holder is presents. Modern communications media have made it possible to order merchandise by telephone, mobile or over the via Internet. It is largely impossible to transmit cash or checks by these media. If you had to send a check by mail every time you ordered something over the phone, your transaction would be no faster than if you ordered by mail. Credit card as a payments medium- In the payment system credit card is a mostly worth fully for merchants that can easily recognize and authenticate the card.If a customer buy some goods and services and given the payment through the check, the merchant must worry about whether or not the customer actually has sufficient funds in his or her checking account to complete the payment. Reserve bank of India guidelines- (http://www.
rbi. org. in/scripts/NotificationUser. aspx? Id=2627&Mode=0) Credit card may be issued by a Bank and any Organization. Who want the credit card so open the account in the Bank and follow the guidelines of Reserve Bank of India. Issue of cards- a.Banks / NBFCs should independently assess the credit risk while issuing cards to persons, specially to students and others with no independent financial means. Add-on cards i.
e. those that are subsidiary to the principal card, may be issued with the clear understanding that the liability will be that of the principal cardholder. b. As holding several credit cards enhances the total credit available to any consumer, banks / NBFCs should assess the credit limit for a credit card customer having regard to the limits enjoyed by the cardholder from other banks on the basis of self declaration/ credit information. c.The card issuing banks / NBFCs would be solely responsible for fulfillment of all KYC requirements, even where DSAs / DMAs or other agents solicit business on their behalf. d. While issuing cards, the terms and conditions for issue and usage of a credit card should be mentioned in clear and simple language (preferably in English, Hindi and the local language) comprehensible to a card user.
The Most Important Terms and Conditions (MITCs) termed as standard set of conditions, as given in the Appendix, should be highlighted and advertised/ sent separately to the prospective customer/ customers at all the stages i. . during marketing, at the time of application, at the acceptance stage (welcome kit) and in important subsequent communications. Interest rates and other charges a. Card issuers should ensure that there is no delay in dispatching bills and the customer has sufficient number of days (at least one fortnight) for making payment before the interest starts getting charged.
b. Card issuers should quote annualized percentage rates (APR) on card products (separately for retail purchase and for cash advance, if different).The method of calculation of APR should be given with a couple of examples for better comprehension. The APR charged and the annual fee should be shown with equal prominence.
The late payment charges, including the method of calculation of such charges and the number of days, should be prominently indicated. The manner in which the outstanding unpaid amount will be included for calculation of interest should also be specifically shown with prominence in all monthly statements.Even where the minimum amount indicated to keep the card valid has been paid, it should be indicated in bold letters that the interest will be charged on the amount due after the due date of payment. These aspects may be shown in the Welcome Kit in addition to being shown in the monthly statement. c. The bank / NBFC should not levy any charge that was not explicitly indicated to the credit card holder at the time of issue of the card and getting his / her consent.
However, this would not be applicable to charges like service taxes, etc. hich may subsequently be levied by the Government or any other statutory authority. d. The terms and conditions for payment of credit card dues, including the minimum payment due, should be stipulated so as to ensure that there is no negative amortization.
e. Changes in charges (other than interest) may be made only with prospective effect giving notice of at least one month. If a credit card holder desires to surrender his credit card on account of any change in credit card charges to his disadvantage, he may be permitted to do so without the bank levying any extra charge for such closure.Wrongful billing a. The card issuing bank / NBFC should ensure that wrong bills are not raised and issued to customers. In case, a customer protests any bill, the bank / NBFC should provide explanation and, if necessary, documentary evidence to the customer within a maximum period of sixty days with a spirit to amicably redress the grievances.
b. To obviate frequent complaints of delayed billing, the credit card issuing bank / NBFC may consider providing bills and statements of accounts online, with suitable security built therefore.Use of DSAs / DMAs and other agents a. When banks / NBFCs outsource the various credit card operations, they have to be extremely careful that the appointments of such service providers do not compromise with the quality of the customer service and the bank / NBFC’s ability to manage credit, liquidity and operational risks.
In the choice of the service provider, the bank / NBFCs have to be guided by the need to ensure confidentiality of the customer’s records, respect customer privacy, and adhere to fair practices in debt collection. . The Code of Conduct for Direct Sales Agents (DSAs) formulated by the Indian Banks’ Association (IBA) could be used by banks / NBFCs in formulating their own codes for the purpose. The bank / NBFC should ensure that the DSAs engaged by them for marketing their credit card products scrupulously adhere to the bank / NBFC’s own Code of Conduct for credit card operations which should be displayed on the bank / NBFC’s website and be available easily to any credit card holder. . The bank / NBFC should have a system of random checks and mystery shopping to ensure that their agents have been properly briefed and trained in order to handle with care and caution their responsibilities, particularly in the aspects included in these guidelines like soliciting customers, hours for calling, privacy of customer information, conveying the correct terms and conditions of the product on offer, etc. Protection of Customer RightsCustomer’s rights in relation to credit card operations primarily relate to personal privacy, clarity relating to rights and obligations, preservation of customer records, maintaining confidentiality of customer information and fair practices in debt collection. The card issuing bank / NBFC would be responsible as the principal for all acts of omission or commission of their agents (DSAs / DMAs and recovery agents).
RBI guidelines given some protection of customer right-sRight to privacy a. Unsolicited cards should not be issued. In case, an unsolicited card is issued and activated without the consent of the recipient and the latter is billed for the same, the card issuing bank / NBFC shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed. b. Unsolicited loans or other credit facilities should not be offered to the credit card customers.In case, an unsolicited credit facility is extended without the consent of the recipient and the latter objects to the same, the credit sanctioning bank / NBFC shall not only withdraw the credit limit, but also be liable to pay such penalty as may be considered appropriate.
c. The card issuing bank / NBFC should not unilaterally upgrade credit cards and enhance credit limits. Prior consent of the borrower should invariably be taken whenever there are any change/s in terms and conditions. .
The card issuing bank / NBFC should maintain a Do Not Call Registry (DNCR) containing the phone numbers (both cell phones and land phones) of customers as well as non-customers (non-constituents) who have informed the bank / NBFC that they do not wish to receive unsolicited calls / SMS for marketing of its credit card products. The DNCR should be set up within two (2) months from the date of this circular and wide publicity should be given to the arrangement. e.The intimation for including an individual’s telephone number in the Do Not Call Registry (DNCR) should be facilitated through a website maintained by the bank / NBFC or on the basis of a letter received from such a person addressed to the bank / NBFC.
f. The card issuing bank / NBFC should introduce a system whereby the DSAs/ DMAs as well as its Call Centers have to first submit to the bank / NBFC a list of numbers they intend to call for marketing purposes. The bank / NBFC should then refer to the Do Not Call Registry (DNCR) and only those numbers which do not figure in the Registry should be cleared for calling. . The numbers cleared by the card issuing bank / NBFC for calling should only be accessed.
The bank / NBFC would be held responsible if a Do Not Call Number (DNCN) is called on by its DSAs / DMAs or Call Centre/s. h. The card issuing bank / NBFC should ensure that the Do Not Call Registry (DNCR) numbers are not passed on to any unauthorized person/s or misused in any manner. I.
Banks / NBFCs/ their agents should not resort to invasion of privacy viz. , persistently bothering the card holders at odd hours, violation of ‘do not call’ code etc. Customer confidentiality a.The card issuing bank / NBFC should not reveal any information relating to customers obtained at the time of opening the account or issuing the credit card to any other person or organization without obtaining their specific consent, as regards the purpose/s for which the information will be used and the organizations with whom the information will be shared.
Banks / NBFCs should satisfy themselves, based on specific legal advice that the information being sought from them is not of such nature as will violate the provisions of the laws relating to secrecy in the transactions.Banks / NBFCs would be solely responsible for the correctness or otherwise of the data provided for the purpose. b. In case of providing information relating to credit history / repayment record of the card holder to a credit information company (specifically authorized by RBI), the bank / NBFC may explicitly bring to the notice of the customer that such information is being provided in terms of the Credit Information Companies (Regulation) Act, 2005. c.
Before reporting default status of a credit card holder to the Credit Information Bureau of India Ltd. CIBIL) or any other credit information Company authorized by RBI, banks / NBFCs may ensure that they adhere to a procedure, duly approved by their Board, including issuing of sufficient notice to such card holder about the intention to report him/ her as defaulter to the Credit Information Company. The procedure should also cover the notice period for such reporting as also the period within which such report will be withdrawn in the event the customer settles his dues after having been reported as defaulter.
Banks / NBFCs should be particularly careful in the case of cards where there are pending disputes. The disclosure/ release of information, particularly about the default, should be made only after the dispute is settled as far as possible. In all cases, a well laid down procedure should be transparently followed.
These procedures should also be transparently made known as part of MITCs. d. The disclosure to the DSAs / recovery agents should also be limited to the extent that will enable them to discharge their duties.Personal information provided by the card holder but not required for recovery purposes should not be released by the card issuing bank / NBFC.
The card issuing bank / NBFC should ensure that the DSAs / DMAs do not transfer or misuse any customer information during marketing of credit card products. Fair Practices in debt collection (a) In the matter of recovery of dues, banks / NBFCs may ensure that they, as also their agents, adhere to the extant instructions on Fair Practice Code for lenders (circular DBOD. Leg.No.
BC. 104 /09. 07. 007 / 2002–03 dated May 5, 2003) as also IBA’s Code for Collection of dues and repossession of security. In case banks / NBFCs have their own code for collection of dues it should, at the minimum, incorporate all the terms of IBA’s Code. (b) In particular, in regard to appointment of third party agencies for debt collection, it is essential that such agents refrain from action that could damage the integrity and reputation of the bank / NBFC and that they observe strict customer confidentiality.
All letters issued by recovery agents must contain the name and address of a responsible senior officer of the card issuing bank whom the customer can contact at his location. (c) Banks / NBFCs / their agents should not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude the privacy of the credit card holders’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations.Redressal of Grievances a. Generally, a time limit of sixty (60) days may be given to the customers for preferring their complaints / grievances.
b. The card issuing bank / NBFC should constitute Grievance Redressal machinery within the bank / NBFC and give wide publicity about it through electronic and print media. The name and contact number of designated grievance redressal officer of the bank / NBFC should be mentioned on the credit card bills. The designated officer should ensure that genuine grievances of credit card subscribers are redressed promptly without involving delay.
. The grievance redressal procedure of the bank / NBFC and the time frame fixed for responding to the complaints should be placed on the bank / NBFC’s website. The name, designation, address and contact number of important executives as well as the Grievance Redressal Officer of the bank / NBFC may be displayed on the website. There should be a system of acknowledging customers’ complaints for follow up, such as complaint number / docket number, even if the complaints are received on phone.
d.If a complainant does not get satisfactory response from the bank / NBFC within a maximum period of thirty (30) days from the date of his lodging the complaint, he will have the option to approach the Office of the concerned Banking Ombudsman for redressal of his grievance/s. The bank / NBFC shall be liable to compensate the complainant for the loss of his time, expenses, financial loss as well as for the harassment and mental anguish suffered by him for the fault of the bank and where the grievance has not been redressed in time.Internal control and monitoring systems With a view to ensuring that the quality of customer service is ensured on an on-going basis in banks / NBFCs, the Standing Committee on Customer Service in each bank / NBFC may review on a monthly basis the credit card operations including reports of defaulters to the CIBIL, credit card related complaints and take measures to improve the services and ensure the orderly growth in the credit card operations. Banks / NBFCs should put up detailed quarterly analysis of credit card related complaints to their Top Management.
Card issuing banks should have in place a suitable monitoring mechanism to randomly check the genuineness of merchant transactions. Right to impose penalty The Reserve Bank of India reserves the right to impose any penalty on a bank / NBFC under the provisions of the Banking Regulation Act, 1949 for violation of any of these guidelines. Appendix  1. Most Important Terms and Conditions (MITCs) (a) Fees and Charges  i.
Joining fees for primary card holder and for add-on card holder ii. Annual membership fees for primary and add-on card holder iii. Cash advance fee iv.Service charges levied for certain transactions v. Interest free (grace) period – illustrated with examples vi. Finance charges for both revolving credit and cash advances vii. Overdue interest charges—to be given on monthly and annualised basis viii.
Charges in case of default (b) Drawal limits i. Credit limit ii. Available credit limit iii.
Cash withdrawal limit (c) Billing i. Billing statements—periodicity and mode of sending ii. Minimum amount payable iii. Method of payment iv. Billing disputes resolution v. Contact particulars of 24 hour call centres of card issuer vi.Grievances redressal escalation—contact particulars of officers to be contacted vii.
Complete postal address of card issuing bank viii. Toll free number for customer care services (d) Default and circumstances i. Procedure including notice period for reporting a card holder as defaulter ii. Procedure for withdrawal of default report and the period within which would be withdrawn after settlement of dues iii. Recovery procedure in case of default iv. Recovery of dues in case of death / permanent incapacitance of cardholder v.
Available insurance cover for card holder and date of activation of policy (e) Termination / revocation of card membership I) Procedure for surrender of card by card holder – due notice (f) Loss/theft/misuse of card i. Procedure to be followed in case of loss/ theft/ misuse of card-mode of intimation to card issuer ii. Liability of card holder in case of (i) above (g) Disclosure i. Type of information relating to card holder to be disclosed with and without approval of card holder 2.
Disclosure of MITCs – Items to be disclosed in stages i. During marketing – Item no: a i. At application – Item nos:all items from a to g iii. Welcome Kit – Item nos: all items from a to g iv. On billing – Item nos: a, b and c, v. On an ongoing basis, any change of the terms and conditions Note: i. The font size of MITC should be minimum Arial-12 ii. The normal terms and conditions communicated by the card issuer to the card holder at different stages will continue as hitherto.
About Credit Card Fraud- Introduction of credit card fraud http://www. seminarprojects. com/Thread-credit-card-fraud-detection-using-hidden-markov-models–5664#ixzz12KHf5P00The use of credit cards has significantly better due to development in the e-commerce technology. In the Case of Credit card fraud are also increasing. Credit-card-based purchases can be categorized into two types: 1) Physical card the cardholder presents his card physically to a merchant for making a payment. An attacker has to steal the credit card to show fraud in this case. 2) Virtual card. Here, card number, expiration date, secure code or similar information is required to make the payment.
The only way to detect his kind of fraud is to analyze the spending patterns. Most simple and common form of credit card fraud is identity theft.It can be happen when some other person stolen your person information and whose use it unauthorized accesss. What is credit card fraud- Credit Card fraud happens when someone steals your credit card, credit card information, or personal identification number (pin), and uses it without your permission to make purchases in stores, online or by telephone, or to withdraw money from an automated bank machine (ABM). How fraud is committed worldwide- When card Lost or stolen is the most common type of fraud. It is include identity theft, skimming, counterfeit card, mail intercept fraud and others.Method Percentage Lose of stolen card 48% Identity theft 15% Skimming (or cloning) 14% Counterfeit card 12% Mail intercepts fraud 6% Other 5% 1 Methods of Credit Card Fraud and their percentage of occurrence, Source: Celent Communications, January 2003) )2%stolen (http://www.
popcenter. org/problems/credit_card_fraud/images/piechart. gif) Impact of credit card fraud (http://www. creditcardsweb.
co. uk/200906/peterborough-consumers-%E2%80%93-impact-from-credit-card-fraud/) In the recent years credit card fraud is an issue that has become a matter of concern for our life. Many people are worried about using their credit cards online and in various other ways due to the risk of falling victim to this type of fraud.We discuss about the impact of credit card fraud to the cardholders, merchants and card issuers- Impact of Fraud on Cardholders If cardholder lost/stolen credit card and some other person unauthorized use it than its effect of cardholder to have economic loss and physically stresseds. Damages the cardholder’s reputation through the unauthorized use of credit card. Impact of Fraud on Merchants Merchants are the most affected party in a credit card fraud; it is a more difficult problem in the card-not-present transactions, as merchants have to accept full liability for losses due to fraud.
Whenever a rightful cardholder disputes a credit card charge, the card-issuing bank will send a chargeback to the merchant (through the acquirer), reversing the credit for the transaction. In this case, the merchant does not have any physical evidence (e. g. delivery signature) available to challenge the cardholder’s dispute, it is almost impossible to reverse the chargeback. Credit card fraud impacts the merchants business and loss of his reputations. Impact of Fraud on Banks (Issuer/Acquirer) Bank is the most of the effective party of credit card fraud.It is very difficult to bank recover the all amount which expand to unauthorized person because bank have no any evidence to which person expends this amount, which person have no identification and have no any original address. So in this reason bank have a loss and its impact on his reputations.
The issuers and acquirers also have to make huge investments in preventing frauds by deploying sophisticated IT systems for detection of fraudulent transactions. Card related fraud – (http://www. billshrink. om/blog/8457/the-most-prevalent-types-of-credit-card-fraud-how-to-protect-yourself/) Application related fraud- Image Source When a person fills out a fraudulent application by using other person name and information, but using a fake address. That is committed fraud because (your address) facts were “misrepresented” when the person applied for the card. Application fraud can be committed in three ways: * Assumed identity- where an individual illegally obtains personal information of another individual and opens accounts in his or her name, using partially legitimate information.
Financial fraud- where an individual provides false information about his or her financial status to acquire credit. * Not-received items (NRIs)-It is also called postal intercepts fraud when a card is stolen from the postal service before it reaches its owner’s destination. Lost/stolen card- When a legal account holder receives a card and loses it or someone steals the card for criminal purposes. This type of fraud is in essence the easiest way for a fraudster to get hold of other individual’s credit cards without investment in technology.It is also perhaps the hardest form of traditional credit card fraud to tackle. Account takeover – This type of fraud occurs when a fraudster illegally obtains a valid customer’s personal information. The fraudster takes control of (takeover) a valid account by either providing the customer’s account number or the card number.
The fraudster then contacts the card issuer, concealed as the genuine cardholder, to ask that mail be redirected to a new address. These types of fraud done by using some techniquess. Phishing The most modern form of credit card and bank fraud is the “phishing” attacks.Phishing is a type of trick designed to steal your identity. Online it is carried out by sending spam e-mail that appears to come from popular Web sites or sites you trust, like your bank or Credit Card Company. Phishers try to get you to disclose valuable personal data like credit card numbers, passwords, account data, or other information by believable you to provide it under false pretenses. http://www. microsoft.
com/athome/security/bank/PhishingVictim. mspx Skimming Image Source Skimming is the form of credit card fraud it is most difficult to avoid its.Where an employee or merchant makes a second copy of the person’s credit card details before processing the payment. This copy is then sold on the black market to professionals who clone illegal copies of these cards.
Fortunately, skimming has become less of a problem since the introduction of CVV and CVS codes. These are not encoded on the card strip but are physically written on the back of the card. This is a required three digit code to finalize all transactions. Without this code even a cloned credit card will not work. (http://ezinearticles. om/? Credit-Card-Fraud—Part-I&id=123783) “Card Not Present” Orders These types frauds done via internet and mail. We’re doing the Transactions the credit card and cardholder are not present are referred to as card not present transactions, for example where a customer provides their credit card number by mail order, telephone order, fax or Internet. http://www.
banksa. com. au/business/payment-solutions/existing-customers/card-not-present The anonymity of the card not present environment can make it difficult to detect fraud. ard not present fraud penalizes two parties: the original consumer who had their card stolen, and the merchant who unknowingly processed fraudulent orders and will, in all likelihood, have them charged back when the original consumer protests. http://www.
billshrink. com/blog/8457/the-most-prevalent-types-of-credit-card-fraud-how-to-protect-yourself/ Fake and counterfeit cards The creations of counterfeit cards, together with lost / stolen cards pose highest threat in credit card frauds. Fraudsters are constantly finding new and more innovative ways to create counterfeit cards.Some of the techniques used for creating false and counterfeit cards are listed below:- 1. Erasing the magnetic strip: – A fraudster can tamper an existing card that has been acquired illegally by erasing the metallic strip with a powerful electro-magnet. The fraudster then tampers with the details on the card so that they match the details of a valid card, which they may have attained, from a stolen till roll. 2.
Creating a fake card: – A fraudster can create a fake card from scratch using sophisticated machines. This is the most common type of fraud though fake cards require a lot of effort and skill to produce.Modern cards have many security features all designed to make it difficult for fraudsters to make good quality forgeries. Holograms have been introduced in almost all credit cards and are very difficult to forge effectively.
Embossing holograms onto the card itself is another problem for card forgers. 3. Altering card details:- A fraudster can alter cards by either re-embossing them by applying heat and pressure to the information originally embossed on the card by a legitimate card manufacturer or by re-encoding them using computer software that encodes the magnetic stripe data on the card. . White plastic: – A white plastic is a card-size piece of plastic of any color that a fraudster creates and encodes with legitimate magnetic stripe data for illegal transactions. This card looks like a hotel room key but contains legitimate magnetic stripe data that fraudsters can use at POS terminals that do not require card validation or verification (for example, petrol pumps and ATMs).
Credit Card Fraud Detection for Online Transactions-http://www. internetmarketingsolution. com. au/credit_card_fraud_detection. htmlWe can say that credit card fraud is a fact-of- life for all merchants who accept credit card payments as part of their business operation. With the increasing transition to online merchandising via the Internet, online credit card fraud is a serious issue.
A business requires a sound order-confirmation-system if you want to avoid getting ‘ripped-off’, being subject to bank ‘charge-backs’ and/or constantly arranging refunds for fraudulent transactions. There are some processes that will help to avoiding being the victim of online credit card fraud. Method of avoiding online credit card fraud- Confirm all orders via email, and request telephone and street address details.
* Do not accept transactions from web-based email addresses, eg. Hotmail, Yahoo, Gmail, etc. press your ‘customer’ for their ISP email account, eg. [email protected] com, [email protected] com. au, etc.
* Contact your bank’s merchant support people if you have the slightest doubt about a transaction, they are there to help you and would much rather have you seek their assistance prior to your initiating a ‘mini-disaster’. Fraud Labs Credit Card Fraud Detection Web Service Fraud Detection System (FDS) is a tool applicable in a web based business.The main goal is develop a tool to detect credit card fraud in web business operations and physical operations (real time).
http://sourceforge. net/projects/nnfds/)http://www. fraudlabs. com/fraudlabs.
aspx Fraud Labs Credit Card Fraud Detection Web Service is a hosted, programmable XML Web Service that allows instant detection of fraudulent online credit card order transactions. The Fraud Labs Credit Card Fraud Detection Web Service helps the Internet merchant to avoid loss of revenue, waste of productivity, and increase of operation costs in chargebacks and higher reserved funds as a result of online frauds.Simply provide Fraud Labs several non-intrusive online transaction data such as IP address, email address domain name, delivery address, credit card bank identification number (BIN), area code and ZIP code. Fraud Labs Web Service analyzes and scores the transaction information using proprietary Fraud Labs algorithm based on known risk factors derived from online fraud patterns. Merchants can automate business decision instantly based on the Fraud Labs XML results that are cross-referenced against multiple proprietary databases in real-time.A fraud validation score is directly proportional to the risk of the input values.
The higher the scores, the higher the risk of a transaction. This XML web service is used under authorized license to ZIPCodeWorld. com, the global leader in postal code service industry. How can we use it- * When a user submits an online order to your site, whether for goods or services, simply send the required non-intrusive information to fraud labs fraud detection web services, and get a quick and easy description, element y element of the likelihood of that purchase being false, fraudulent, or incorrect; along with an easy to read overall score.
Fraud Labs users can display the logo on their website to protect online credit card fraud. Use of HMM for credit card fraud detection http://www. seminarprojects.
com/Thread-credit-card-fraud-detection-using-hidden-markov-models–5664 An HMM(Hidden markov model) is a double embedded stochastic process with two hierarchy levels which can be used to model much more complicated stochastic processes as compared to a traditional Markov model.An HMM has a finite set of states governed by a set of transition probabilities. A FDS (fraud detection system) runs at a credit card issuing bank. It is sent the card details and the value of purchase to verify whether the transaction is genuine or not and tries to find any anomaly in the transaction. This calculation is based on spending profile of the cardholder, shipping address, and billing address, etc . If found to be fraudulent, it raises an alarm, and the issuing bank denies the transaction.
Secure Electronic TransactionSecure Electronic Transaction (SET) is a standard protocol to securing credit card transactions over the Internet. SET is not itself a payment system, but rather a set of security protocols and formats that enables users to employ the existing credit card payment infrastructure on an open network in a secure fashion. SET blocks out the details of credit card information, thus preventing merchants, hackers and electronic thieves from accessing this information.
http://www. investopedia. com/terms/s/secure-electronic-transaction-set.
asp SET consists of three services: http://www. informit. om/articles/article. aspx? p=26857 * Providing a secure communications channel among all parties involved in a transaction. * Providing trust by the use of X. 509v3 digital certificates.
* Ensuring privacy because the information is only available to parties in a transaction when and where necessary. Key features (http://en. wikipedia. org/wiki/Secure_Electronic_Transaction) SET incorporates the following features: * Confidentiality of information * Integrity of data * Cardholder account authentication * Merchant authentication A SET system includes the following participants: Cardholder * Merchant * Issuer * Acquirer * Payment gateway * Certification authority Transaction The sequence of events required for a transaction are as follows: * The customer obtains a credit card account with a bank that supports electronic payment and SET * The customer receives an X. 509v3 digital certificate signed by the bank. * Merchants have their own certificates * The customer places an order * The merchant sends a copy of its certificate so that the customer can verify that it’s a valid store * The order and payment are sent The merchant requests payment authorization * The merchant confirms the order * The merchant ships the goods or provides the service to the customer * The merchant requests payment Retrieved from “http://en. wikipedia.
org/wiki/Secure_Electronic_Transaction” Fraud Prevention Technologies When fraudsters are using difficult methods to gain access to credit card information and commit fraud, new technologies are available to help merchants to detect and prevent fraudulent transactions. Fraud detection echnologies enable merchants and banks to perform highly automated and sophisticated screenings of incoming transactions and flagging suspicious transactions. While none of the tools and technologies presented here can by itself eliminate fraud, each technique provides incremental value in terms of detection ability. Various fraud prevention techniques are discussed below: MANUAL REVIEW This method consists of reviewing every transaction manually for signs of fraudulent activity and involves an exceedingly high level of human intervention.This can prove to be very expensive, as well as time consuming. Manual review is unable to detect some of the more prevalent patterns of fraud, such as use of a single credit card multiple times on multiple locations (physical or web sites) in a short span. ADDRESS VERIFICATION SYSTEM This technique is applicable in card-not-present scenarios. Address Verification System (AVS) matches the first few digits of the street address and the ZIP code information given for delivering/billing the purchase to the corresponding information on record with the card issuers.
A code representing the level of match between these addresses is returned to the merchant. AVS is not much useful in case of international transactions. CARD VERIFICATION METHODS The Card Verification Method (CVM) consists of a 3- or 4-digit numeric code printed on the card but is not embossed on the card and is not available in the magnetic stripe. The merchant can request the cardholder to provide this numeric code in case of card-not-present transaction and submit it with authorization.The purpose of CVM is to ensure that the person submitting the transaction is in possession of the actual card, since the code cannot be copied from receipts or skimmed from magnetic stripe. CVM provides some protection for the merchant; it doesn’t protect them from transactions placed on physically stolen cards.
NEGATIVE AND POSITIVE LISTS A negative list is a database used to identify high-risk transactions based on specific data fields. An example of a negative list would be a file containing all the card numbers that have produced chargebacks in the past, used to avoid further fraud from repeat offenders.Similarly a merchant can build negative lists based on billing names, street addresses, emails and internet protocols (IPs) that have resulted in fraud or attempted fraud, effectively blocking any further attempts. A merchant/acquirer could create and maintain a list of high-risk countries and decide to review or restrict orders originating from those countries. Another popular example of negative list is the SAFE file distributed by MasterCard to merchants and member banks. This list contains card numbers, which could be potentially used by fraudsters, e. g.
, cards that have been reported as lost or stolen in the immediate recent past.Positive files are typically used to recognize trusted customers, perhaps by their card number or email address, and therefore bypass certain checks. Positive files represent an important tool to prevent unnecessary delays in processing valid orders. PAYER AUTHENTICATION Payer authentication is an emerging technology that promises to bring in a new level of security to business-to-consumer internet commerce. The first implementation of this type of service is the Verified by Visa (VbV) or Visa Payer Authentication Service (VPAS) program, launched worldwide by Visa in 2002.The program is based on a Personal Identification Number (PIN) associated with the card, similar to those used with ATM cards, and a secure direct authentication channel between the consumer and the issuing bank.
The PIN is issued by the bank when the cardholder enrolls the card with the program and will be used exclusively to authorize online transactions. When registered cardholders check out at a participating merchant’s site, they will be prompted by their issuing bank to provide their password. Once the password is verified, the merchant may complete the transaction and send the verification information on to their acquirer.LOCKOUT MECHANISMS Automatic card number generators represent one of the new technological tools frequently utilized by fraudsters.
These programs, easily downloadable from the Web, are able to generate thousands of ‘valid’ credit card numbers. The traits of frauds initiated by a card number generator are the following: • Multiple transactions with similar card numbers (e. g. same Bank Identification Number (BIN)) • A large number of declines Acquiring banks/merchant sites can put in place prevention mechanisms specifically designed to detect number generator attacks.FRAUDULENT MERCHANTS List of merchants who have been known for being involved in fraudulent transactions in the past. These lists (NMAS – from Visa and MATCH- from MasterCard) could provide useful information to acquirer’s right at the time of merchant recruitment preventing potential fraudulent transactions. Recent Developments in Fraud Management The technology for detecting credit card frauds is advancing at a rapid pace – rules based systems, neural networks, chip cards and biometrics are some of the popular techniques employed by Issuing and Acquiring banks these days.
Apart from technological advances, another trend which has emerged during the recent years is that fraud prevention is moving from back-office transaction processing systems to front-office authorization systems to prevent committing of potentially fraudulent transactions. However, this is a challenging trade-off between the response time for processing an authorization request and extent of screening that should be carried out. SIMPLE RULE SYSTEMS Simple rule systems involve the creation of ‘if… then’ criteria to filter incoming authorizations/transactions.
Rule-based systems rely on a set of expert rules designed to identify specific types of high-risk transactions. Rules are created using the knowledge of what characterizes fraudulent transactions. For instance, a rule could look like – If transaction amount is > $5000 and card acceptance location = Casino and Country = ‘a high-risk country’. Fraud rules enable to automate the screening processes leveraging the knowledge gained over time regarding the characteristics of both fraudulent and legitimate transactions. Typically, the effectiveness of a rule-based system will increase over time, as more rules are added to the system.It should be clear; however, that ultimately the effectiveness of the system depends on the knowledge and expertise of the person designing the rules. The disadvantage of this solution is that it can increase the probability of throwing many valid transactions as exceptions; however, there are ways by which this limitation can be overcome to some extent by prioritizing the rules and fixing limits on number of filtered transactions.
RISK SCORING TECHNOLOGIES Risk scoring tools are based on statistical models designed to recognize fraudulent transactions, based on a number of indicators derived from the transaction characteristics.Typically, these tools generate a numeric score indicating the likelihood of a transaction being fraudulent: the higher the score, the more suspicious the order. Risk scoring systems provide one of the most effective fraud prevention tools available. The primary advantage of risk scoring is the comprehensive evaluation of a transaction being captured by a single number. While individual fraud rules typically evaluate a few simultaneous conditions, a risk-scoring system arrives at the final score by weighting several dozens of fraud indicators, derived from the current transaction attributes as well as cardholder historical activities.Transaction amounts more than three times the average transaction amount for the cardholder in the last one year. The second advantage of risk scoring is that, while a fraud rule would either flag or not flag a transaction, the actual score indicates the degree of suspicion on each transaction. Thus, transactions can be prioritized based on the risk score and given a limited capacity for manual review, only those with the highest score would be reviewed.
Neural Network Technologies Neural networks are an extension of risk scoring techniques.They are based on the ‘statistical knowledge’ contained in extensive databases of historical transactions, and fraudulent ones in particular. These neural network models are basically ‘trained’ by using examples of both legitimate and fraudulent transactions and are able to compare and weigh various fraud indicators (e. g.
, unusual transaction amount, card history, etc) to the occurrence of fraud. A neural network is a computerized system that sorts data logically by performing the following tasks: Identifies cardholder’s buying and fraudulent activity patterns.Processes data by trial and elimination (excluding data that is not relevant to the pattern). Finds relationships in the patterns and current transaction data. The principles of neural networking are motivated by the functions of the brain – especially pattern recognition and associative memory. The neural network recognizes similar patterns, predicting future values or events based upon the associative memory of the patterns it has learned. The advantages neural networks offer over other techniques are that these models are able to learn from the past and thus, improve results as time passes.They can also extract rules and predict future activity based on the current situation.
By employing neural networks effectively, banks can detect fraudulent use of a card, faster and more efficiently. Biometrics Biometrics is the name given to a fraud prevention technique that records a unique characteristic of the cardholder like, a fingerprint or how he/she sign his/her name, so that it can be read by a computer. The computer can then compare the stored characteristic with that of the person presenting the card to make sure that the right person has the right card.Biometrics, which provides a means to identify an individual through the verification of unique physical or behavioral characteristics, seems to super cede PIN as a basis for the next generation of personal identity verification systems. There are many types of biometrics systems under development such as finger print verification, hand based verification, retinal and iris scanning and dynamic signature verification. Smart Cards Smart card is a credit card with some intelligence in the form of an embedded CPU.This card-computer can be programmed to perform tasks and store information, but the intelligence is limited – meaning that the smart card’s power falls far short of a desktop computer. Smart credit cards operate in the same way as their magnetic counterparts, the only difference being that an electronic chip is embedded in the card. These smart chips add extra security to the card. Smart credit cards contain 32-kilobyte microprocessors, which is capable of generating 72 quadrillion or more possible encryption keys and thus making it practically impossible to fraudulently decode information in the chip.Smart chip has made credit cards a lot more secure; however, the technology is still being run alongside the magnetic strip technology due to a slow uptake of smart card reading terminals in the world market. The advantages are listed below: Stores many times more information than a magnetic stripe card. Reliable and harder to tamper with than a magnetic stripe card. Performs multiple functions in a wide range of industries. Compatible with portable electronic devices such as phones and personal digital assistants (PDAs), and with PCs.Stores highly sensitive data such as signing or encryption keys in a highly secure manner Performs certain sensitive operations using signing or encryption keys in a secure fashion. What to do in case of credit card fraud If you are a victim of credit card fraud, start a written log of what happened and how you first noticed the fraud. Keep all documentation that you think may be helpful in the investigation. Follow some steps- * Report a lost or stolen credit card, or any unauthorized charges that appear on your monthly statement immediately to your credit card issuer. * Contact your local police and file a police report.Guidelines to prevent credit card fraud Fraud is starts when some person stolen personal information, such as your name, address, dates of birth, and Social Insurance Number (SIN). Don’t leave any personal information lying around at home, in your vehicle or at the office. It is very important to choose a PIN that is also difficult to guess, and never write it down or give it to anyone else. It is also useful to keep, in a safe place. Following some guidelines that can also help to protect your credit card information:- In public places • Carry a limited number of credit cards. When entering the PIN, cover the keypad with hand or body so that no one can see the PIN by “shoulder surfing” – looking over shoulder. • When at a merchant, keep your card in sight at all times to prevent “skimming” or “swiping”. Skimming happens when a thief passes your credit card through a device that reads and records the information from the magnetic stripe. • If you notice something suspicious about a transaction or a credit card device at a merchant, report it to the merchant’s head office and to your credit card issuer. Fraud At home • Check the monthly statements. • Lock your mailbox if possible.This is a common place for thieves to find a credit card application, a replacement card or even monthly statements. • If you receive a replacement credit card, destroy any old card that is no longer valid. If you don’t receive a replacement by the time your card expires, contact your credit card issuer. On the phone • Never given the anyone information about your credit card because we use it unauthorized. But some reason given the information by the phone, conform about which a company or persons. Instead, get the caller’s name, number, and company name and check that they are legitimate, before calling back by following these steps: . Check the company’s telephone number these are legitimate or not. 2. Call the company and verify that the person that has contacted you is indeed a member of the company’s staff. 3. Contact the Better Business Bureau in your province or territory and ask questions about the company. Online * Don’t give out credit card information by e-mail because this is not secure. * Make sure the website are using is secure before transmitting personal Information, and keep your computer firewall, anti-virus and anti-spyware Systems up to date. * Do Not Submit Credit Card Numbers to Bank Emails. Method Percentage Investigation process-Case studies- Legal provision Credit card fraud involves withdrawal of funds and obtaining of goods and services by using an unauthorized account. Otherwise inaccessible personal information stored on computers is stolen in order to use a card. When someone stolen the credit card or other personal information of a person that is a crime. In Indian law given the protection agents the crimes. The information technology (Amendment) Act, 2oo8 provide the protection of unauthorized access (43(a) (b) (g), identity theft (section 66(c)) punishment for cheating by personation by using computer resource (section 66(d)).Penalty and Compensation for damage to computer, computer system, etc (section 43 a, b, g) If any person without permission of the owner or any other person who is incharge of a computer, computer system or computer network – (a) Accesses or secures access to such computer, computer system or computer network or computer resource (ITAA2008) (b) downloads, copies or extracts any data, computer data base or information from such computer, computer system or computer network including information or data held or stored in any removable storage medium; (g) provides any assistance to any person to facilitate access to a computer, computer system or computer network in contravention of the provisions of this Act, rules or regulations made there under, Shall be liable to pay damages by way of compensation to the person so affected. Punishment for identity theft (section 66(c) (IT AA, 2008) Whoever, fraudulently or dishonestly make use of the electronic signature, password or any other unique identification feature of any other person, shall be punished with imprisonment of either description for a term which may extend to three years and shall also be liable to fine which may extend to rupees one lakh.Punishment for cheating by personation by using computer resource (section 66(d)) (IT AA, 2008) Whoever, by means of any communication device or computer resource cheats by personation, shall be punished with imprisonment of either description for a term which may extend to three years and shall also be liable to fine which may extend to one lakh rupees. Conclusion We can say that today credit card fraud is a very danger . It affected a society and governments security system. Credit card doing the help of person to buying goods and services without the present money. But some people use of this system to misuse and damage to other person’s reputation and given the physical stresss. In Indian law available the remedies against the offenders who are held liable for credit card frauds and misuse. http://www. articlesbase. com/security-articles/credit-card-fraud-and-relevant-legal-provisions-in-india-539838. html The end | |In India, credit card fraud is mostly limited to the physical space. Online con jobs make up just about 1% of the total numbers here, unlike 40% in the developed world. But, as consumers graduate to the shop-easy internet and pay with their cards, instances of fraud are bound to rise. While we don’t have statistics, as access to the web increases, reported cases of card fraud are estimated to rise at 20-30 % every year. In online transactions, contracts are one-sided and the customer is always held responsible in case of fraud. Phishing, where a consumer gets a fictitious email from a fake site or blog seeking sensitive card information, is a commonly-used defrauding mechanism.To top it, people are careless in offering their card details. Almost all the banks issuing credit cards issue various guidelines and suggestions to the customers from time to time in order to cut short the rate of credit card frauds and misuse to a minimum possible level. Thus, we can conclude that with the help of the legal remedies available as cited earlier in the Article, penal action can be brought against the offenders who are held liable for credit card frauds and misuse. Read more: http://www. articlesbase. com/security-articles/credit-card-fraud-and-relevant-legal-provisions-in-india-539838. html#ixzz12tN8HdxK Under Creative Commons License: Attribution 0 WAYS TO REDUCE CUSTOMER CREDIT CARD FRAUD http://ezinearticles. com/? How-Merchants-Can-Reduce-Credit-Card-Fraud&id=5141319 1. Address Verification Service (AVS) – is a simple and easy to implement process to decrease your chances of accepting a stolen credit card. When you process a credit card transaction; make sure you capture the card holder’s billing address and zip code. Manual non-swipe (Internet and MOTO) transactions will require you to capture card holder information. However, card present (swipe) transactions will not. Once you capture the card holder’s billing address and zip code you’re ready to process the sale. Your point of sale system will verify AVS with the card issuing bank.You can receive a street address match only, a zip code match only or a match on street address and zip code. If you do not receive an AVS match you should consider declining the transaction. Approximately 80% of fraudulent transactions in the U. S. are AVS mismatches. Keep in mind, most AVS systems can be configured so be sure to check your AVS settings. Implementing AVS can have a major impact on reducing credit card fraud. 2. Card Verification (CVV/CVV2) – is similar to AVS. CVV is the 3 digit code on the back of a credit card (4 digits for American Express). Like AVS, CVV is entered at the point of sale. The card holder’s CVV code is verified by the card issuing bank when the credit card sale is being processed.If you do not receive a CVV match you should consider declining the transaction. Online merchants should make CVV a required field. 3. Use a Threshold Management Service – Threshold management allows the merchant to set parameters for the transactions they will accept. For example, transactions can be screened based on the amount of money charged per transaction, the number of transactions charged, transaction frequency, average user ticket, etc. Transactions that are marked as a potential fraudulent transaction will require additional review by the merchant. Threshold Management services are usually available an add-on service. 4. Scrutinize Orders from Free email accounts – Fraudsters and thieves like to hide.One of the easiest ways to hide the identity of a thief is to use a free email account. Most fraudulent transactions use a free email service. Merchants should not decline all transactions from a free email service. However, you may want to provide those orders with more scrutiny. 5. Scrutinize Orders with a different Ship to address than Bill to address – The thief with the stolen credit card may have the owners billing address and zip code. If so, you will receive an AVS and CVV match on their order. However, in order to receive your product they will request the order to be shipped to a different address. Merchants should review all orders with a different ship to and bill to address. If