More Credit Card frauds in store

Recently a fraud of Rs 63 lakhs involving  gross negligence by Bank employees not ruling out their involvement. It is said that the Bank believed that the customer had a sore throat and executed large transactions including closing of FDs and remitting the amount to other accounts based on e-mail requests which were obviously not digitally signed.

See report

This incident indicated how current day Bankers have no idea of their responsibilities to the customers. It is as if a bunch of data entry operators have been designated as “Bankers” not withstanding some of them having MBA qualifications. They think that the entire banking is just punching some keys on the computer. For those of us who have undergone a rigorous training in Banking both on procedures and law, the current situation is completely unacceptable. This is not merely negligence but “Recklessness” for which they alone should be held liable.

Close on the heels of this Banker’s negligence comes a report about how many credit card/debit card accepting merchant establishments are reacting to the latest RBI guidelines that all POS systems should be able to accept the Pin entry for authenticating card payments. Many Banks have made ATM PINs also PINs for debit cards and hence the customers are using one single PIN with which they can pay with debit cards as well as withdraw money from ATMs.

Now it is reported that  many establishments are continuing to keep the POS in the cashier’s counters and asking customers to write the PIN on the back of the bill so that the card entry can be completed by the cashier without the customer needing to move to the counter. Some are asking the PIN orally so that the cashier can enter the PIN in the POS kept some where not easily reachable by the customer.

Any ordinary person should realize that if PINs are being revealed to everyone then any fraudster can easily clone the card, use the PIN and empty the Bank accounts within minutes.

It is clear from the report which comes from Pune but may be happening elsewhere that merchant establishments are expressing their ignorance on the risks. If this is not corrected immediately, we will be seeing that hundreds of card frauds would be happening in the coming days.

Merchant establishments which want to serve their customers at their table have to use WIFI enabled POS systems. Otherwise customers have to be called to the counter and provided with facility to confidentially enter the PIN. If this does not happen, then customers have to be indemnified by the Banks and the Merchant establishments.

Naavi

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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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