Cards stacked against your plastic money

Data theft is enabling cloning of credit/debit cards and card-users are getting robbed with alarming frequency these days. Now, all hinges on a committee on safer payment technology constituted by RBI that will submit its report in July.

pratap

Pratap Vikram Singh | June 17, 2013



Use of debit and credit cards is no more a safer option. While your banking card is safely kept in your wallet, you might still get an SMS from your bank, stating details of the transaction which could have been performed in a city or a country that you might not have even been to in your lifetime. Thanks to ‘skimming’, a process through which fraudsters steal data from banking cards with the help of a pocket-size card reader, cases of fraudulent card-based transactions are being reported across the country.

The banking card data is stolen when a customer provides his card for transaction, which could be at a petrol station, hotel, restaurant and retail shop, among others. The card is swiped in the pocket-size card reader before it reaches the transaction terminal of the service outlet. Data stealing at ATMs is also widely in practice. A micro-device is fixed with the ATM for reading the magnetic strip and scanning the PIN of the card. This data is then put into a system and cloning is performed using another blank or expired magnetic (used in banking) card. 

There is spurt in these crimes, the increasing frequency with which reports of these appear in the media — the latest being the hacking of 37 Axis bank accounts through bugging of ATMs in Mumbai. Out of 37, 13 accounts were those of Mumbai cops. Transactions worth Rs15 lakh were done at ATMs located in Greece between June 10 and June 14. Mumbai police and Axis bank, both are investigating these cases.

Similarly, an NRI based in London has lodged an FIR complaining about fraudulent withdrawals from his bank account at electronic retails shops in Delhi. Sumant Kumar, the London-based NRI, lost Rs 2.5 lakh. In a similar incident in February, special investigation team of crime branch of Delhi Police arrested a 27-year-old law student, who ran a gang specialised in cloning banking cards.  The cops had recovered two card reader machines from the gang.

Another case was reported in Hyderabad where a call centre employee working for HSBC was apprehended along with his three accomplices for siphoning huge sum through skimming. The accused, in collusion with employees of petrol stations, cloned customers banking cards and robbed Rs 10 lakh.

To make transactions more secure, the reserve bank of India (RBI) has constituted a committee to select a better payment technology. Either of two technologies would be chosen: Aadhaar based transaction or EMV.  The latter, which is a collaborative initiative of Europay, Mastercard and Visa, is being strongly pushed by the banking community. If Aadhaar is chosen, the banks will have to procure biometrics devices and enable themselves for different security standards. The committee, according to media reports, is expected to submit its report next month. Until then, the fate of card-based transactions and of crores of people using these cards seems to be on shaky grounds.

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