1.

0 Introduction

Humans are now living in a world of credit. Every day, in every situation we become
increasingly involved with various aspects of credit. Credit encourages business development
and provides a way to handle business. Credit transactions occur in various forms. The credit
type is classified according to the purpose of the credit and the repayment method. The credit
card provides two services by acting as a payment method for goods and services and also as a
source of credit to the cardholder. Credit cards can also be used as an alternative to cash, checks
and other payment cards that provide services to cardholders as well as merchants who accept
credit card use.

Apart from being one of the credit card payment methods it also provides some other
benefits to the cardholder. First, credit cards can be used to get cash from an ATM. Secondly,
some purchases can be made without the need to present and submit credit cards, such as movie
ticketing or purchase of goods via telephone (Mail-order / telephone-order, MOTO). Thirdly, as
an activity for promoting the card by the issuing institution, the cardholder may be able to get
insurance for free or other rewards. For cardholders, choose to use a credit card or other means to
make payments depending on factors such as convenience and can avoid bringing in much cash.

The development of credit card usage in Malaysia is always monitored by Bank Negara
Malaysia and Malaysian Risk Management Task Force (MRMTF) comprising issuers and credit
card issuers, Royal Malaysian Police, Visa and MasterCard International representatives, but
crime incidents involving a credit card is still valid. A study should be undertaken to look at the
current situation of credit card fraud in the country and to propose measures to control this
criminal act as well as better enforcement of law enforcement.

Every facility offered to consumers will have its own risk. For the credit card industry one of
the risks is theft of public information or cardholder information to execute credit card
counterfeiting activities. The advancement of computer and telecommunications technology has
complemented criminals with new ways to steal people's information regardless of distance,
place and time. The old methods that are still being used effectively by criminals are through
dumpster diving by exploring the baskets to find personal information about a person such as
bank statements, pre-approved credit cards and utility bills.

Nowadays, the use of credit cards as a payment instrument is so widespread. In Malaysia,

credit cards were introduced in the 1970s in the form of charge cards. Now, payment cards
remain the most popular retail payment method for Malaysians. The involvement of financial
institutions in issuing credit cards has led to the rapidly expanding credit card industry in the
country. The number of fraudulent cases and criminal cases involving credit cards is also
increasing in tandem with the rapid development of credit card usage.

Since recently it has been widely spoken about the effects of credit card usage in the country.
This is not only published in electronic media or print media but also discussed by
parliamentarians in parliament. One of the issues touched was on the issue of credit card fraud
and counterfeiting which resulted in the loss of millions of ringgit to local and foreign banks.
These losses may be absorbed by credit card issuers or card-brand companies but this amount
remains and is quite consistent in recent years. Whereas if it is working hard, credit card fraud is
a crime that can be avoided. However, in terms of percentage of total loss compared to
transaction volumes is small but in terms of the value of loss in the ringgit amounting to millions
of ringgit. Losses in millions of dollars will fall into the hands of criminals and allow them to
commit other crimes such as money laundering and drug purchases.

2.0 Review of the journals

Researchers have analyzed four journals that cited the growing number of credit card frauds and
frauds in Malaysia. In Malaysia the issue of fraudulent credit card frauds involving credit cards is
considered to be a very tedious issue right now. The local newspapers of Malaysia and also some
foreign researchers often discuss about the credit card fraud that has taken place in Malaysia
widely.
 The four types that researchers have undertaken to carry out this study are general who are
directly involved with credit card fraud. The first journal to be reviewed is ‘Credit Card Fraud
and the Law: A Critical study of Malaysian perspective’. The writer if this journal is Dr.
Nehaluddin Ahmad Principal Lecturer, Faculty of Business and Law, Multimedia University,
Malaysia.

According to the journal there is a huge need to comprehend the law that identifies with
Visas, both common and criminal, particularly, with regards to consistently expanding Master
card cheats, and the manner by which the common law has added to it, and the deficient manner
by which the criminal law has looked to battle it. It can't be denied that charge card abuse is a
worldwide issue. It will likewise demonstrate a portion of the impacts of such criminal abuse.
The paper will investigate the lawful cures and compensation under criminal enactment that exist
against Master card extortion in Malaysia.

The writer urges that, other than enduring misfortunes, deceitful exchange additionally
produce debate, when unfortunate casualties understand that the figures appeared in their
announcements are off base. For example, a question could emerge on the off chance that
somebody has stolen or utilized the points of interest of the card proprietor without his
authorization or assent. The other sort of debate would emerge when cardholders understand that
they have been charged for things or administrations that they have not gotten or that they have
been charged twice for a similar thing or administration. On such events, it might be fathomable
that all gatherings concerned (processors, banks, VISA/MasterCard, the shippers) might need to
move the obligation to somebody. The law authorization bodies might need to research if the
idea of the misrepresentation is broad generally rationale demonstrates that it isn't savvy. The
police can possibly complete the examination if the cardholder has made a police report.

Be that as it may, cardholders may not understand the mistake or the incorrectness right
away. This again may hinder or discourage a police examination for the wrongdoer may have
vanished. Be that as it may, in the United States, there is a Federal law that has methodical
strategies for recognizing and settling charge card debate that may emerge between the
cardholder and the card guarantor with regards to the exceptional amount. Under this Act the
purchaser can challenge a leaser's announcement on a record in his name. But Malaysia does not
have such an Act.
 It has been built up that the United Kingdom has one specific Act against misrepresentation
to disallow every single false offense and the United States has no less than one specific area to
forbid charge card fakes. Be that as it may, the Malaysian Government has not accepted such
measures so far. For it has not given a particular enactment to especially cover charge card
misrepresentation. There have been various such cases that have preceded the nearby courts and
at present the neighborhood courts are utilizing the general criminal laws to stop Master card
fraudsters. The essential wellspring of criminal law both in Malaysia and in Singapore is the
Penal Codes of the individual nations and these arranged laws are enhanced by custom-based law
standards. The primary writing overseeing this offense is still established under the customary
law which is the Malaysian Penal Code. It is fundamentally the same as the Indian Penal Code
which was ordered in India in 1860.27 This Code was initially sanctioned to supplant the
complex frameworks of criminal law which were in presence in British India amid that period.
The Malaysian Penal Code, similar to the Indian Penal Code forbids most crimes in Malaysia.

The second journal is about ‘Credit Card Frauds And Measures To Detect And Prevent
Them’ by Mr.K.Kathirvel, Assistant Professor In Commerce, Kongunadu Arts And Science
College, Coimbatore, Tamil Nadu, India. He wrote that the development in the electronic
installments segment is joined by various financial and value-based advantages. As exhibited by
Muhammad Yunus and the Grameen Bank, champs of the 2006 Nobel Peace Prize, gains from
monetary advancements can be broad, across the board, and formatively positive. Electronic
installments improve monetary wasteful aspects, make installments increasingly secure and
advantageous, and, as a culmination to the exercises gained from small scale account, give the
impulse to encourage financial and social advancement. For creating nations, those increases
could be critical, yet they would rely upon the simultaneous advancement of the proper system
and installments foundation, government guideline, shopper training, and rivalry inside the area.
As governments in created economies have scholarly, satisfactory administrative oversight in the
electronic installments part is basic to keeping up money related soundness, customer certainty,
and information protection and security of the division. Albeit electronic installments
development could speak to an open door for creating nations to rebalance their economies by
empowering residential utilization and it is fundamental to teach purchasers to utilize electronic
installments capably and safely.
 He segmented a few ways to identified to detect and prevent credit card frauds. As below:

There are diverse key measures, which are utilized for recognizing and avoiding Visa cheats.
Some of them are as per the following:

1. Address Verification Service (AVS): This system coordinates the cardholders' charging
address and ZIP code data given for conveying the buys against the bank record. This framework
is accessible in the USA and in a couple of nations of Europe. Be that as it may, this system has
distinctive shortcomings for example the location data is accessible on the web; it makes the
brokers work exhausting in keeping the misrepresentation; it can't check the whole educational
card. Just American Express bank has the office to check all the worldwide cheats through its
AVVS framework.

2. Credit Verification Values (CVV): This innovation checks 3-4 digit number embellished
codes on charge card. This innovation has advantage that it requires physical ownership of card
however this favorable position can be invalidated by staging. It additionally can't shield the
dealer from exchanges set on physically stolen cards.

3. Negative Databases: This innovation checks the request against misrepresentation

endeavors.

4. Misrepresentation Rates: This innovation checks for perceived examples related with the
extortion. It conveys the preferred standpoint that it is anything but difficult to design and see,
yet the weakness is that in the event that the misrepresentation designs are changed. Another
extortion example may not be perceived.

5. Migration: This innovation checks the purchasers' geographic area dependent on IP

addresses. It is profitable as it can square or banner requests starting from high-chance nations.
Be that as it may, negative viewpoint is non-pertinence on IP intermediaries and satellite.

6. 3D-Secure: This innovation chips away at the rule of validating the buyer by means of
recently settled secret phrase. The positive side of this framework is that the fraudster needs
genuine cardholders' secret word to finish the exchange. Nonetheless, this preferred standpoint
can likewise be disregarded as the passwords can be hacked.
 7. Chip and PIN: The shrewd cards acquainted with avert Visa misrepresentation by utilizing
this innovation. The charge card has an encoded EMV chip putting away all data and a PIN
rather than a mark, which are utilized to demonstrate that you are the certifiable cardholder.
Therefore, this method limits extortion.

8. Biometrics: This is the latest and complex innovation to forestall charge card cheats. It
records a novel normal for the cardholder like fingerprints, voice, mark, iris, and other
comparable natural parts with the goal that a PC can peruse it. At that point the PC contrasts the
put away attributes and that individual who introduces the card for guaranteeing that he/she is the
real cardholder. Negative part of this innovation is that it conveys extra expenses and clients are
as yet hesitant to acknowledge it.

Third journal on the credit card frauds was written by Mohd Zaid bin Hassan. The title of the
journal is ‘Criminal Infringement Credit Cards In Malaysia’. The journal reviews about fraud
involving credit cards in Malaysia. The researcher said that the use of credit cards as a payment
instrument in Malaysia began in the 70’s. Historically, the first credit card was introduced in the
United States approximately in 1914 by some oil companies to its customers for the purchase of
gas, oil and additional equipment at company stations. In 1950 Diners' Club, Inc., may be the
first company to issue cards that can be used for various purposes. Approximately in 1958,
American Express companies and two major banks, Bank of America and Chase Manhattan have
joined the credit card field and the company has introduced its card to the United Kingdom. In
1966 Barclays Bank became the first British bank that introduced a credit card known as
Barclaycards. Then credit cards have expanded globally and are accepted globally. Acceptance
of credit card usage as a payment card contributes to card withdrawals and intense competition
among credit card issuing institutions.

Credit card frauds are among the biggest threats in today's business world and to combat the
fraud effectively, it is important to understand the mechanism of how credit card fraud is
executed. The pattern of criminal credit-related behavior is changing over time. Hence the modus
operandi of new credit card crimes are often found. Various ways the criminals exploit the
weaknesses inherent in credit card technology and systems and human weaknesses.
 In line with global trends, phishing or stealing information continues to be a major threat and
covers over 99% of Internet banking cases. Credit card criminals also often steal data or
information while users are doing credit card transactions at the store and on the vending
machines by installing chips on the terminal to collect account information, install skimmer,
make phone line shortcuts, repetitive receipt prints, form fraudulent responses or by stealing
account data through intermediaries such as bank clerks and establishing collusion with
shopkeepers. Here are the identifiable modus operandi of credit card counterfeiting:

i. Theft of details of credit card account information,

ii. The use of scanners,

iii. Installing the chip on the terminal of the electronic data detector,

iv. Phone line shortcuts,

v. Negotiation is difficult,

vi. Email phishing,

vii. False response by phone, and

viii. Card counterfeiting via extrapolation and cloning methods.

In Malaysia, almost all of the above types of crimes and tactics are used by credit card
criminals to obtain credit card information or to develop fake credit cards.

The last journal is written by Hussein A Abdou and John Poiton. This fourth journal has been
discussing the issue of credit card fraud which is widespread in our country. Researchers have
stated some active cases in Malaysia. In addition, the author has also stated a number of common
credit card fraud techniques in Malaysia. This study covers the aspects of credit card fraud and
also the way it takes to address the problems faced. Researchers have also discussed some
methods that can be used to identify offenders who misuse credit cards. Among them,
researchers have noted that credit card counterfeiting can be analyzed by identifying the
recipient's address. If the recipient receives multiple cards at the same address, then it is said to
be a credit card counterfeiting step. In addition, if the name is the same for many cards, forgery
can also be done. In addition, other methods are Decision Tree, Genetic Algorithm, Cluster
Method and Braided Neural. He with his trademark stating that credit card fraud is a criminal
offense. Therefore, all parties need to work together to overcome this problem.

The creator distinguished a few areas under the Penal Code which could be utilized to charge
Master card wrongdoers under various conditions. The section incorporate s120A, s378, s411,
s415, s420, s463 and s474.21. The Current Law Journal uncovered that there were various
articles composed on the arrangements of the Penal Code. Nonetheless, a portion of these
arrangements have been changed and the investigation features the revisions made to a portion of
the arrangements. The Penal Code (Amendment) Act 1989 rolled out some minor improvements
to the wording of s411 and s420. The alterations are as per the following:

Amendment to section 411

Section 411 of the Code is changed by substituting for "three" "five", and embeddings after
"both" the words "; and if the stolen property is an engine vehicle or any segment some portion
of an engine vehicle as characterized in segment 379A, will be rebuffed with detainment for a
term of at the very least a half year and not over five years and will likewise be obligated to
fine".

Amendment to section 420

Se20 of the Code is changed by substituting for the word 'seven' the word 'ten'. The Penal
Code (Amendment) 1993 rolled out another improvement to s420.

Amendment to section 420

Section 420 of the Code is amended-

• by embedding’s following the word 'tricked' the words, regardless of whether the double
dealing rehearsed was the sole or fundamental actuation,"; and by substituting for the words 'may
reach out to ten years and will likewise be subject to fine' the words 'will not be short of what
one year and not over ten years and with whipping, and will likewise be at risk to fine.'
The latest case involving credit card fraud has occurred in a 62-year-old man. The incident
occurred two weeks ago where the elderly had received a call from an officer who introduced
him as a policeman and tried to threaten the victim that he had the remaining unresolved money.
Then he was connected to another section (Friend) to support the fact that there was a problem
with the payment. Ole thus, the victim has transferred a total of Rm 62000 into the account
numbers that have been given by predators and cheated. Police reports have been made...

3.0 Conclusion

Plainly, charge card extortion is a demonstration of criminal unscrupulousness. This article has
evaluated ongoing discoveries in the Visa field. This paper has recognized the diverse sorts of
misrepresentation, for example, insolvency extortion, fake extortion, robbery extortion,
application extortion and social extortion, and talked about measures to identify them. Such
measures have included pair-wise coordinating, choice trees, bunching methods, neural systems,
and hereditary calculations. From a moral point of view, it very well may be contended that
banks and charge card organizations should endeavor to distinguish every single false case.
However, the amateurish fraudster is probably not going to work on the size of the expert
fraudster thus the expenses to the bank of their identification might be uneconomic. The bank
would then be looked with a moral predicament. Would it be a good idea for them to attempt to
identify such fake cases or would it be a good idea for them to act in investor premiums and
evade uneconomic expenses? As the following stage in this exploration program, the center will
be upon the execution of a 'suspicious' scorecard on a genuine informational collection and its
assessment. The principle undertakings will be to fabricate scoring models to foresee fake
conduct, considering the fields of conduct that identify with the diverse kinds of Visa
misrepresentation recognized in this paper, and to assess the related moral ramifications. The
arrangement is to take one of the European nations, likely Germany, and after that to stretch out
the examination to other EU nations.
4.0 References

Akta Perlindungan Data Peribadi 2010 (Akta 709)

Akta Sistem Pembayaran 2003(Akta 627)

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Bank Negara Malaysia. (2011). New Measures on Credit Cards to Promote Prudent Financial
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Gartner Group Ras Sources (1992). OAS: R-104-101, March 12, 1992.

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