Thursday, July 24, 2008


Plastic makes purchase easy, but there may be pitfalls. How to protect your transactions .

NINE times out of 10, retailers accept credit card payments without a second glance at the signature. Given the long queues at the billing counters, many merchants overlook signature verification despite the gravity of this issue.

“Signature is just for the validation process. It does not prevent misuse of the card,” says Subrat Pani, Business Head — Cards, Kotak Mahindra Bank.However, the liability always lies with the merchant if he processes a fraudulent transaction. Hence, always keep a photocopy of your credit card (along with the signature) to help you in case of disputed transactions which has to be reported within 60 days.

If the signature on the charge slip mismatches with yours then the merchant has to bear the liability and you get your money back. Most card issuers have dispute forms either online or in their branches.

• Erase the CVV

E-commerce has opened up a new avenue for fraudsters. Online transactions require only the number, validity date and the 3-digit CVV number printed on the reverse of the card. This three-digit number has to be kept confidential to prevent card misuse. Since cardholders often part with their cards during payments, the CVV number should be scratched off or masked with ink to prevent misuse.

However, a CVV can’t be regenerated like a PIN, so ensure you remember it or else you have to apply for a new card altogether. Most e-commerce websites have a Verified by VISA programme or a MasterCard Secure Code programme.

This is a two-level authentication process which validates an online transaction. After keying the card number and the CVV number, the website asks for a net pin, which banks offer on request. Although you can complete the transaction by merely filling your birth date, it is recommended that you obtain a separate net pin to ensure a secured transaction.

Virtual card for online transactions

Banks such as HDFC , Kotak Mahindra and Axis offer a virtual card which can be used for online shopping. You have to fill some personal details along with the card number on the bank’s home page and you will be given a card number along with the CVV number for a onetime use.

You have to key in these details, which is exclusive to that transaction. In a virtual card, you should also specify the transaction amount. So the virtual card will be loaded with the required credit limit. You can pay for this virtual card either through your credit/debit card.

Sign up for mobile alerts

Moblie alerts available in the form of an SMS confirmation for credit card transactions help in checking frauds. Often these services have to be subscribed to. “Also the call centre immediately calls the customers if the bank notices an unusual transaction,” says Sachin Khandelwal, head — cards product group, ICICI Bank.

Your liability

If you lose a credit card, you are liable for any fraudulent transaction unless you have covered this risk by signing up for an insurance cover. Some banks like Standard Chartered Bank and HDFC Bank offer this insurance cover but most players don’t have any such options. So ensure your card is protected for a safe and secured shopping all the time.

If you travel to Thailand, Malaysia or even Taiwan, bankers suggest you replace the plastic. The incidence of frauds is very high in these countries and even if the bank doesn’t call you, just replace the plastic. It’s worth the effort.

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