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Credit cards have become a vital part of making day-to-day payments in India. However, with increased usage comes the risk of unauthorised credit card transactions. These fraudulent activities can lead to financial loss and stress. Knowing how to identify, report, and prevent such transactions is crucial for every cardholder. This article provides a comprehensive guide on what to do if you encounter unauthorised transactions on your credit card.
An unauthorised credit card transaction occurs when a payment is made using your credit card without your permission or knowledge. This could be a purchase, cash withdrawal, or any debit from your credit card account that you did not approve.
Quick action is essential when you notice such transactions because:
It helps limit your financial liability.
It enables your bank to block further fraudulent use.
It facilitates faster resolution and recovery of lost funds.
Always monitor your credit card statements and transaction alerts regularly to spot any suspicious activity early.
Several factors contribute to unauthorised credit card transactions. Understanding these can help you safeguard your card better and avoid financial losses:
Phishing Attacks: Fraudsters send fake emails, SMS, or calls pretending to be your bank or a trusted entity to trick you into sharing your card details or OTPs. These deceptive tactics often lead to unauthorised access to your credit card account.
Card Skimming: Criminals attach small devices called skimmers to ATMs, petrol pumps, or POS machines. These devices copy the magnetic strip data on your card when swiped, which can be used to clone the credit card or make online purchases fraudulently.
Malware and Spyware: Malicious software installed unknowingly on your computer or smartphone can record your keystrokes or capture card information when you enter it online. This data is then sent to fraudsters for misuse.
Data Breaches: Large-scale hacking incidents at merchants or payment gateways can expose your card details. Even if you have not shared your card online recently, your information could be compromised through such breaches.
Lost or Stolen Cards: Physical theft or loss of your credit card can lead to immediate unauthorised transactions if the card is used before you report it lost.
Account Takeover: Fraudsters may gain access to your online banking or credit card account by stealing login credentials. They can change passwords, add new payees, or make transactions without your consent.
Being aware of these causes helps you take preventive measures like avoiding suspicious links, using secure networks, and regularly updating passwords.
If you detect a fraud credit card transaction, follow these steps immediately to minimise damage:
Block Your Credit Card: Contact your bank’s customer care or use mobile banking apps to block your card instantly. This can help prevent further unauthorised transactions.
Alert Your Bank: Inform your credit card issuer about the suspicious transaction. Provide details such as transaction date, amount, and merchant name.
Change Online Passwords: Update your internet banking and mobile app passwords immediately to prevent account takeover.
File a Dispute: Request your bank to initiate a dispute or chargeback process for the fraudulent transaction and submit the required details or documents required.
Check Other Accounts: Review linked bank accounts and other cards for any suspicious activity.
File a Police Complaint: Lodge an FIR with your local police station and obtain a copy. This may be required by the bank during their investigation.
Monitor Your Account: Keep a close watch on your credit card statements and transaction alerts for any further unauthorised activity.
Prompt action increases the chances of recovering your lost funds and can protect you from falling for a fraud credit card transaction in future.
Reporting and disputing unauthorised credit card transactions involves a formal process with your card issuer. Here are the general steps you would have to take:
Review Your Statement: Identify and note down all unauthorised transactions.
Contact Customer Care: Call your bank’s credit card helpline immediately to report the fraud.
Submit a Written Complaint: Many banks require a written or email complaint detailing the unauthorised charges.
Fill Dispute Form: Complete the bank’s dispute or chargeback form with transaction details and your statement.
Provide Supporting Documents: Attach copies of your statement, FIR, and any correspondence with the bank.
Follow Up Regularly: Stay in touch with the bank’s fraud department for updates on the investigation.
Receive Resolution: The bank will investigate and, if satisfied, reverse the fraudulent charges as per RBI guidelines.
Timely reporting is critical to ensure your liability is limited and the bank acts swiftly.
Protecting your credit card from fraud requires vigilance and adopting secure practices:
Enable Transaction Alerts: Activate SMS and email alerts for every transaction to monitor activity in real-time.
Use Virtual Credit Cards: For online purchases, use virtual card numbers that mask your actual card details.
Activate Two-Factor Authentication (2FA): Ensure your bank account and credit card app use 2FA for login and transactions.
Avoid Public Wi-Fi for Transactions: Use secure, password-protected networks or VPNs when making online payments.
Regularly Update Passwords: Change your banking and shopping site passwords frequently and avoid using the same password across platforms.
Beware of Phishing Attempts: Do not click on suspicious links or share OTPs and card details over calls or messages.
Implementing these measures reduces the risk of unauthorised credit card transactions significantly.
The Reserve Bank of India (RBI) has laid down clear guidelines to protect cardholders in case of fraud:
Liability Limits: If you report the unauthorised transaction within three working days of receiving the transaction alert, your liability is zero. Beyond that, liability depends on the delay and negligence.
Bank’s Responsibility: Banks must investigate reported frauds promptly and resolve disputes within 90 days.
No Liability for Lost Cards: If your card is lost or stolen and reported promptly, you are not liable for fraudulent transactions.
Chargeback Rights: Cardholders can request chargebacks for disputed transactions under the RBI’s framework.
Fraud Monitoring: Banks are required to have fraud detection and prevention systems to safeguard customers.
Customer Education: Banks must educate customers on secure credit card transactions and fraud prevention.
Knowing your rights helps you take informed action and seek redressal confidently.
Unauthorised credit card transactions can be distressing, but swift action and awareness can minimise their impact. Always monitor your credit card transactions, report suspicious activity immediately, and follow your bank’s procedures to dispute fraudulent charges. By adopting secure transaction habits and knowing your rights, you can protect yourself effectively against credit card fraud.
Immediately block your credit card by contacting your bank. Report the fraudulent transaction, file a dispute, and change your online banking passwords to prevent further misuse.
Enable transaction alerts, use strong passwords, avoid sharing OTPs, and report lost or stolen cards promptly to your bank to stop unauthorised payments.
Contact your credit card issuer’s customer care immediately, submit a written complaint and dispute form with transaction details, and follow up until the issue is resolved.
Yes, if you report the fraud promptly and cooperate with your bank’s investigation, RBI guidelines ensure you can recover the lost amount.
Banks investigate reported frauds and, upon verification, reverse unauthorised transactions as per RBI rules within a stipulated timeframe.
File a complaint with your bank’s fraud department and lodge an FIR with the police. Provide all relevant documents to support your case for faster resolution.
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| 1min read
Posted on 16 May
Roshani Ballal
Academy by Bajaj Markets
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