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Sunday, 3 March 2013

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SMS will help check credit card fraud

The number of credit and debit card theft and fraud is on the rise in Sri Lanka and globally due to the lack of a protective mechanism and the callous use of cards.

Though there are no statistics on the exact number of thefts and frauds and the amount of money card users have lost, bank sources said that card users have lost much money due to illegal credit card transactions.

Credit and debit card users said that while many banks have SMS alerts to inform card users of transactions, some banks do not have a systematic protective mechanism which is vital to trap those who engage in fraud and curb the number of illegal transactions.

Banks have protective mechanisms but officials of some banks declined to comment on the mechanisms. A Commercial Bank Card Centre official said that SMS alerts have helped in a big way to minimise fraudulent transactions and ensure the safety of credit and debit cards.The SMS alerts inform card users of transactions within a minute of the completion of a transaction.

“We have not had many instances of card theft or fraudulent transactions.The bank has refunded over 75 percent of illegal transactions depending on the bank's relationship with the customer. However, the customers have to pay a fee and register to get this facility,” a senior executive, who wished to remain anonymous, said. An official of the NDB Bank said that the bank's debit and credit cards have Visa facilities and added that the SMS alerts is also used as a protective mechanism to avert illegal transactions.

“The SMS alert is a protective mechanism which card users should ask for when applying for a card,” he said.A Bank of Ceylon, Credit Card Division official said that debit card users have the option to request the bank to permit only cash withdrawals which requires a PIN number.

“We have requested customers to inform the bank when they lose their cards to cancel its validity,” he said. Security from fraudulent transactions through cards are not always dependent on the bank that issued it and most cards systems are operated through major card networks, Visa, MasterCard, Discover and American Express.They boast zero-dollar liability guarantees for unauthorised credit card transactions and signature debit card transactions.

According to a consumer fraud liability study in the US, consumer liability for PIN debit transactions depends on the card network and the manner in which the transactions are processed.Discover extends zero-dollar liability to debit card purchases verified by PIN, while American Express does not offer debit cards with PINs.

Visa cardholders are covered only for unauthorised PIN debit transactions processed over Visa’s network, but consumers have no way of knowing how a given transaction will be processed. MasterCard does not provide additional liability coverage for PIN debit transactions.

-LF

 

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