Financial Daily from THE HINDU group of publications
Tuesday, Sep 06, 2005
Money & Banking
Credit card frauds get high tech
Coimbatore , Sept. 5
CRDIT card frauds are common, but in accepting the transaction swiped using a fake card, banks are letting thieves get away with several crores of rupees.
Fake cards apart, frauds do happen when a criminal misuses a stolen or lost card. The card is genuine, but the thief gets away unscathed. There have been a couple of such stray incidences, pending investigation.
If the cardholder is more alert, reports the matter without wasting much time, such frauds can be controlled to some extent. Bankers will need to device ways and means to insulate the system from such crimes, particularly when they lure customers to take a card and merchant establishments will have to be sensitised about such misgivings.
But the recent case that the city police here stumbled upon appears to be an organised white-collar crime. A group in Namakkal in Tamil Nadu is said to have chalked out the game plan.
The fraudsters employed Sri Lankan repatriates (mostly students) from London and other European countries for committing the crime. The rest of the action is as in a movie... These repatriates land in India enroute their homeland with a forged card of a foreign bank or are given a fake card by the group operating in India. The name on the card is suitably modified to an Indian name, while it will continue to go with a number of an original card of say, some billionaire abroad.
In a photo-card, the fraudsters go to the extent of changing the picture itself to synchronise with the face of the beholder. The criminals use the fake card to make huge purchases, which according to the police has run to several crores of rupees.
When fake cards are swiped in a manual swiping machine, the fraud goes unnoticed. But if presented at a merchant establishment that has an Electronic Data Capturing (EDC) swiping machine, it scans the details on the magnetic stripe on the reverse. One track has data such as the cardholder's name and other secret information.
(Duplicating the codes would require inside knowledge of the issuing bank's security procedures.)
Merchant establishments, unfortunately fail to cross check the details on the transaction slip. They blindly ask the cardholder to sign up, take one copy of the transaction slip for their records and allow the customer to collect his/her purchases.
Police sources say that in the case that they have been investigating since 2002, there has been no complaint from the original cardholder. On the other hand, the alert from a local shopkeeper (a jeweller) enabled them to apprehend the culprits, who later admitted the modus operandi.
The seized cards include that of American Express and Royal Bank of Scotland.
Police sources say that in the course of the trial, three foreigners got bail.
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