Assignment of Management of Financial

Services

“Evolution of Plastic Money using scanned

documents as evidence andmovie clips
also discuss the scams attached to usage of
plastic money”

Submitted to: Submitted by:

Dr. Navjot Kaur Gautam Sharma
Geetika Sharma
The evolution of plastic money dates back to the 1920s, when the first payment
card was introduced in the USA. 

Diners Club and American Express launched the world's first plastic card in the
USA, in 1950. The first credit card was introduced by Diners Club in 1951.
However, the plastic cards began to be widely used only after 1970, when the
specific standards for magnetic strip were set. 

In the late 1990s, plastic cards became very common and by 2001, plastic money
had become an essential form of 'ready money'

Types of Plastic Money frauds:-

Lost and stolen card fraud

a card is physically stolen from your wallet or home, or it is lost, and is then used
by a criminal, posing as you, to obtain goods and services. Most fraud of this type
takes place before you have reported the loss. Ideally it is better to carry your
cards separately from your wallet, preferably in a zippered compartment or
pouch. If your credit cards are lost or stolen, contact the issuer(s) immediately.
Most credit card companies have toll-free numbers and 24-hour service to deal
with these emergencies -- they are eager to avoid credit card fraud. Note down
their number and inform them the details of your lost card at the earliest. Ask
them for some confirmation code for having received this message from you. This
will enable them to hot list the card and prevent its further misuse. Invariably
follow it up with a letter to the card issuer. Legally the moment you have made a
written complaint to the card provider and the provider has acted upon your
complaint then you no longer have to make a payment for the unlawful
purchasing.

Counterfeit card fraud (also known as Skimming)

 A counterfeit, cloned or skimmed card is one that has been printed, embossed or
encoded without permission from the card company, or one that has been validly
issued and then altered or recoded. Most cases of counterfeit fraud involve
skimming, a process where the genuine data on a card's magnetic stripe is
electronically copied onto another card, without the legitimate cardholder's
knowledge.

Skimming can occur at retail outlets particularly bars, restaurants and petrol
stations where a corrupt employee puts your card through a device, without your
knowledge, that electronically copies the data from your cards magnetic stripe.
Sometimes skimming takes place at cash machines where tampering has occurred
and a skimming device has been fitted (see below). The information is usually
then sold on higher up the criminal ladder where counterfeit cards are made.
Often you will be unaware of such fraud until your statement arrives, showing
purchases that you did not make. Therefore it is imperative that you open credit
card bills promptly and make sure there are no bogus charges. Treat your credit
card bill like your checking account- reconcile it monthly. Save your receipts so
you can compare them with your monthly bills.
This type of fraud more common in western countries is slowly on the raise here
too. Chennai, Bangalore, Mumbai & Delhi have reported their share of this scam.
In June this year the Bangalore police have busted a well-networked international
credit card fraud, which they stumbled upon while investigating some other case.
The police arrested three people who had connections with agents in the US and
recovered materials, that includes 114 original colour credit cards and 15 white
cards. The gang operated with the help of agents in the US, who sent them stolen
and lost credit cards, mostly belonging to NRIs. At the same time, they send them
white plastic cards, which are plain counterfeit cards, containing a magnetic strip
with data of some other credit card user, whose card has been skimmed. The
agents send the cards to people in Bangalore. Using a software, they transfer data
from the white card to the original card. They use these cards to purchase
electronic goods and later sell the goods at cheaper rates. 20 percent of the profit
is sent to the agents in the US. Malaysia & Singapore are two major hubs in Asia
where basic cards are imported and sent through agents for use in our country.
The latest is the Skimmer, a small palm-held device in the shapes of cigarette
packets or pagers, widely used abroad to counterfeit cards and they are sure to
have reached India too. The number of skimmed cards that are flooding our
country provides an indication for this.
Card-not-present (CNP) fraud

This includes fraud conducted over the Internet, by telephone, fax and mail order.
It is perpetrated when criminals obtain card details through the theft of your card
details from discarded receipts or by copying down your details during a
transaction. It is now the largest type of fraud in the UK. 

The problem in countering this type of fraud lies in the fact that neither the card
nor the cardholder is present at a till point in a shop. This means that:CNP
businesses are unable to check the physical security features of the card to
determine if it is genuine. Without a signature or a PIN it is not easy to confirm
that the customer is the genuine cardholder card issuers cannot guarantee that
the genuine cardholder has given the information provided in a card-not-present
environment.

To prevent this type of frauds, cardholders need to be cautious. Be very careful to

whom you give your credit card. Don't give out your account number over the
phone unless you initiate the call and you know the company is reputable. Never
give your credit card info out when you receive a phone call. (For example, if
you're told there has been a 'computer problem' and the caller needs you to
verify information.) Legitimate companies don't call you to ask for a credit card
number over the phone. Never respond to emails that request you provide your
credit card info via email -- and don't ever respond to emails that ask you to go to
a website to verify personal (and credit card) information. These are called
'phishing' scams. Never provide your credit card information on a website that is
not a secure site. Do not click on links in email seeking details of your account,
they could be phishing emails from fraudsters. Most reputed companies will ask
you to visit their website directly. While using a credit card for making payments
online, check if the website is secure. The CVV will also be required.

Mail-intercepted cards:

This type of fraud involves your card being stolen in transit, once it has been sent
out to you from your bank. If both you and your spouse are working, there will be
nobody at home to receive the mails. Such people are at greater risk for this type
of fraud. If both of you happen to be working, then better give your office address
for delivery of cards. Several cases of billing without getting the cards have been
reported. Investigations in one case revealed that a newly issued card was used
by the delivery boy of the courier firm to go on a spending spree with his friends.

Identity theft on cards

This occurs when a criminal uses your fraudulently-obtained personal information

to open or access card accounts in your name. There are two types: 

Application fraud

Stolen or false documents are used to open an account in your name. Criminals
steal documents such as your utility bills and bank statements to build up usable
information. Alternatively, they may use counterfeit documentation for
identification purposes. 
In one case reported from Chennai, the accused had allegedly cheated the bank
right from the stage of submitting the application — the first step to obtain a
credit card. An agent from Triplicane submitted 100 applications with a bank
seeking credit cards in January. When verification officials visited the households,
the resident would confirm that they had applied for the card. It transpired that
the agent had given some money to each applicant and used the cards in their
name to siphon off nearly Rs 1.39 crore before absconding. However, he was
arrested later. In another case, police found that the accused had withdrawn
money and purchased goods after forging the signature of the genuine card
holders. Frequently, unwitting residents receive bill statements from banks for
cards that they do not hold.

Account take-over

This by obtaining key personal information criminals are able to take over the
running of your account. By pretending to be you the criminal will try to deceive
your bank or card company and arrange for payments to be taken from the
account. The criminal may also instruct the bank to change various details of the
account, such as the address, and then ask for new cards and cheque books to be
issued. 
In many cases the fraudster uses the telephone to inform the bank of a card loss
and requests the bank to send the card to a new address as he is on the move.
Actually an MNC bank which is one of the biggest players in India went on air
some time ago advertising their customer friendly nature by delivering the card to
the customer at a new location. " Banks are more customer oriented these
days even when there is a change in address. 

Precautions:-

Sign at the back of Credit Card

To start with when you receive a new credit/debit card. ensure that you affix your
signature in the space provided for the same at the back. An unsigned card gives
more scope for manipulation. A separate communication is also mailed to you
providing a PIN-Personal Identification Number. Memorize this PIN and destroy
that communication to avoid this number being seen by others. All ATMs have a
provision for changing the PIN if desired by the cardholder. Those of you who
wish to do so ensure that the changed number is something you can easily
remember. Do not use numbers that can be guessed by anybody like your date of
birth or employee id number etc. Never write down the PIN anywhere. I have
seen people writing down their PINs in their Pass Books and also a few on the
back of the card itself with marker pens. Such habits do not augur well for the
safety of your money.

The CVV Number of the Credit Card

The next important area of your card is the CVV number, which is the last three
digits (or, four in some cases) of a number printed on the back of your card. This is
the card verification code that is used in on-line transactions and also presently a
major area on which frauds occur. Any one can use the card for on line purchases
if this information is available with them. If you are in the habit of making online
payments from a secure connection, say, your home, it will be ideal if you note
down this number and keep it in a secure place for use while at home and to blot
it out immediately on the card. For example if you give your card to a waiter at a
restaurant, what is there to stop the waiter from writing down your credit card
number and placing orders on the phone with it later? Any dishonest employee of
a departmental store can do the same if he can remember your CVV number,
since the entire card details like number & name are available in the billing
system of the super market.

Do not give xerox copy of your card to any Agent

Another variant of this trick has been doing the rounds recently. There is any
number of Direct Selling Agents for these card-marketing companies. Some of
them ask for a Xerox copy of the front and reverse side of your existing card luring
you with an offer to provide increased credit limits. If you comply with their
request, the safety of your card vanishes in the cyber space. If you come across
such agents, flatly refuse to give a Xerox copy of your card. Also report the matter
to the concerned card-issuing bank.

Do not give your credit card number

Yet another con job on similar lines was recently reported at Chennai. Some of
the leading banks had provided a software facility to five-star hotels and certain
recreational clubs allowing them to debit a credit card account without swiping
the card. The establishments need to just key in the customers credit card
numbers with his or her consent before the transaction. In the instant case,
Janakiraman, a computer engineer, had not given permission for the transaction,
yet the amount was withdrawn from his account. He was among a dozen others
who were informed by a recreational club that they had been chosen to receive
gifts from it. They were asked to come to the organisations office in
Abhiramapuram where they were asked to provide credit card numbers and other
personal details. They were then persuaded to become members, paying
Rs.35,000 and in return, promised a free trip abroad. Mr. Janakiraman, who had
provided details, however, declined the trip offer. Yet, Rs.15,000 was charged on
his credit card account the next day. Based on the complaint of the victim, the
police have arrested the general manager of the club.

Aware about your Credit Card Number theft during ATM cash Withdrawal

When you use the card to draw money from any ATM center, stand close to the
machine and ensure that you are using your spare hand to shield the card number
and PIN input from any prying eyes are hidden cameras. Be aware of your
surroundings before you attempt to draw cash. If there is too much of a crowd
inside any such cash machine, better use another one. Do not accept help from
well-meaning strangers and never allow yourself to be distracted. Once you have
completed a transaction, discreetly put your money and your card away before
leaving the cash machine. Dispose of your cash machine receipt, mini-statement
or balance enquiry with care. Tear up or, preferably, shred these items before you
discard them. If the machine retains your card, inform the bank or service point
immediately. It is ideal to carry with you some proof of your id to claim the struck
up card from the bank.

Present Scenario

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. As J Y Umranikar, additional DG,
Maharashtra CID, says, While we dont have statistics, as access to the web
increases, reported cases of card fraud will rise 20-30 % every year. And this is
only a surmise based on past experience. Umranikar insists that 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,he adds.

Times of India reports the following: While consumer organisations TOI spoke to
had little information about online fraud, card companies say it is increasing in e-
ticketing, eshopping and the service sectors, where no physical delivery of goods
is involved. Shockingly, B Madhivanan, general manager at ICICI Bank, informs
that 60% of online card fraud occurs only while buying an air ticket. The following
case is also provided in the said report: 
In April this year, a 26-year-old Mumbai executive keyed in her credit card
number and the three-digit security code on the e-booking site of an airline. She
bought a ticket for Bangalore. In July, she was shocked to find a Rs 20,000
additional credit drawn from her account. Two tickets from the same airline were
booked on two different days in June using my card,she says. The first was a
Dwarka-Mumbai ticket for Rs 6,000, and the other, a Delhi-Dubai one for Rs
14,000. She did not get a response from her card company till August. Then I
approached the police to file an FIR. But they told me they did not know what a
credit card was. Exasperated, she went to the cybercrime cell, which in turn asked
her to first lodge an FIR with the police. 

She got a cybercrime officer to speak to the police and finally got her complaint
registered. On receiving a complaint, card companies say, a consumer is given a
temporary credit that matches the disputed amount, and a case is resolved in a
maximum of 60 days. The Mumbai executive , though, has been waiting for
almost three months now. For safer transactions, an advanced card such as
Verified by Visa (VbV) and Mastercard SecureCode comes in handy. Here, a
consumer requires a password during a transaction to validate his identity.

Nowadays the usage of credit cards has seen a significant rise and so has the
happenings of credit card fraud. People are shopping by sitting in the comfort of
their home with the help of credit cards. It is not easy for the victim of a credit
card fraud to get his/her credit card back as you have to go through a very
complex process, as revealed by the above case study. I have attempted to cover
various areas where a card holder can be tricked and also a few methods to avoid
getting trapped. Nevertheless, this is not an exhaustive analysis and can never be,
as newer methods are constantly devised by the con artists to cheat the gullible
public.