Bank Fraud or Credit fraud

Introduction
Credit card fraud is when someone uses your credit card or credit account
to make a purchase you didn't authorize. This activity can happen in
different ways. Fraudsters can also steal your credit card account number,
PIN and security code to make unauthorized transactions, without
needing your physical credit card.

How does fraud happen on credit cards?

Credit card fraud happens when consumers give their credit card number
to unfamiliar individuals, when cards are lost or stolen, when mail is
diverted from the intended recipient and taken by criminals, or when
employees of a business copy the cards or card numbers of a cardholder.

Case Study
Amit Tiwari had many names, bank accounts and clients. None of them
were for real. With a plan that was both ingenious and nave, the 21-year-
old engineering student from Pune tried to defraud a Mumbai-based
credit card processing company, CC Avenue, of nearly Rs 900,000.He was
arrested by the Mumbai Police on August 21, 2003 after nearly an year of
hide and seek with CC Avenue. He's been charged for cheating under
Section 420.
CC Avenue verifies and validates credit cards of buyers for over a
thousand e-commerce Web sites. It conducts checks like IP mapping, zip
code mapping and reverse lookup of telephone numbers. Amit Tiwari
found a way to bypass them.In May 2002, Col Vikram Tiwari signed up for
CC Avenue's services. In November, he requested the company to deal
with his son, Amit, who offered Web designing services on
www.mafiaz.com. CC Avenue's security team confirmed his credentials
through bank signature verification, driving license and his HDFC Bank
debit card. Everything was genuine. Amit processed several transactions,
worth Rs 311,508, via CC Avenue from November 2002 to February 2003.
Then the transactions stopped. In April 2003, CC Avenue began receiving
charge-backs from the credit card holders, who denied using
mafiaz.com's Web designing service. Amit had assumed the identities of
these 'customers', and purchased mafiaz.com's services with credit card
details that he found on the Net. He was both the buyer and the seller.
Calls to Amit's house in Lucknow went unanswered.

Legal notices came back unclaimed. Amit had disappeared without a

trace. In June 2003, Sachin Deshpande and Jeevan Palani signed separate
agreements with CC Avenue to provide Web designing services through
their sites www.infocreek.org and www.ewebsitestarter.com. The
company's risk-management team found that both these sites had ripped
off content and even the client list from foreign sites with similar names.
The modus operandi was similar to Amit's. Vishwas Patel, the CEO of CC
Avenue, spoke to Sachin over the phone and found that he sounded just
like Amit - "young and immature". They decided to hold back payment.
Then, a person called Shoaib Sharif sought the services of CC Avenue.
Vishwas and his team again spotted a similar pattern. They held back
payment on various pretexts. "He sounded desperate," says Vishwas. So
they decided to trap him. Trapped CC Avenue's accounts manager asked
Shoaib to come to Mumbai to collect a cheque of Rs 40,000. On August
21, a young man walked into Vishwas's office. He introduced himself as
Shoaib Sharif. Vishwas immediately recognized him as Amit. (He had seen
Amit's photograph from his driver's license). Vishwas then called the
Mumbai Police, who rushed to his office and picked up the lad. At the
Santa Cruz police station, the boy confessed right away.
Flaw in law

Despite his confession, Amit has not yet been booked under the cyber
crime laws. Senior Inspector Kishore Patil said they would treat it as a
case of fraud. Vishwas explains, "The biggest flaw in the IT Act is that
credit card fraud is not covered. The lawmakers have framed the Act
mainly to ensure the safety of individual digital certification companies."
Clad in t-shirt and jeans, Amit looks like any other collegian. But when this
21-year-old speaks of his exploits, he assumes the air of an expert. He got
some credit-card details through a popular hacker chat room. But he
created the rest. He explains, "Each credit card has a country code
number, a bank code number and then some other digits. If you find out
these first two sets of numbers, it is very easy to create a credit card
number. That's what I did." Amit then used proxy servers to camouflage
his real location and pass CC Avenue's IP checks. Talent misused "I am
Sachin Deshpande. I am Jeevan Palani," he says with a smile. He created
different accounts with the HDFC and ICICI banks with these names.
Posing as an office boy, he opened an ICICI bank account for his 'boss'
Shoaib Sharif. Says Vishwas, "This reminds me of Leo's movie, 'Catch me if
you can'." Amit seems proud of what he's done. Initially he did run a Web
designing business. But when he signed up with CC Avenue, he got
interested in their processes. He studied them closely and cut through
them. Elder brother Anil says they were aware that Amit had launched a
Web site. But they knew nothing of the fraud. In his confession, Amit
corroborated his brother's statement. Amit says he used the money to
pay capitation fees at the engineering college where he studies. But he
continued to defraud CC Avenue because "it was easy". Listening to him,
Vishwas is amazed at the boy's knowledge of the system. Vishwas says,
"He has tremendous talent. I don't want to ruin his career. That's why I
hope he will use his intelligence to plug security holes rather than exploit
them."
How To Avoid Credit Card Fraud?

Keep Your Credit Cards Safe

One of the simplest ways to avoid credit card fraud is by keeping your
credit cards safe from thieves. Place your credit cards in a purse or wallet
close to your body where it can't easily be snatched away.

If you're shopping in a high traffic area, carry a smaller purse because it's
harder to steal or sneak into. For both men and women, carry only the
one or two credit and debit cards you'll be using that day. Leave all your
other credit cards at home.

Thieves can take pictures of your credit card with a camera or cell phone,
so don't leave your credit card exposed any longer than necessary.

After you make a purchase put your credit card away immediately.
Confirm you have your credit card back in your possession before you
leave the store or restaurant.

Shred Anything with Your Credit Card Number on It

Don't loss your credit card billing statements directly into the trash; they
typically have your full credit card number printed on them. Shred them
to keep dumpster divers from getting their hands on your credit card
number. The same thing applies to old credit cards that have expired or
been canceled.

You can go a step further and put the shredded pieces in different trash
bags for the extra eager thieves who might put shredded pages back
together.

Don't Sign Blank Credit Card Receipts

Always verify the amount on your credit card receipt before signing it. If
you get a credit card receipt that has blank spaces in it, write $0 in those
spaces or draw through them before putting your signature on the card.
Otherwise, the cashier could write in an amount and send the purchase
to your credit card issuer.
Avoid Giving out Your Credit Card Information
Only give your credit card number or other sensitive information on calls
you initiate. Not only that, when you call your credit card
issuer's customer service , use the number on the back of your credit
card. Don't return calls to a phone number left on your answering
machine or sent to you in an email or text message. It's hard to be sure a
scammer hasn't left a fake number for you to call.

Don't give your credit card number to anyone who calls you requesting
the number. Credit card thieves have been known to pose as credit card
issuers and other businesses to trick you into giving out your credit card
number.

Be Safe with Your Credit Card Online

Don't click on email links from anyone that looks like your bank, credit
card company, or other business who uses your personal information,
even if the email looks legitimate. These links are often phishing scams
and the scammers want to trick you into entering your login information
on their fake website. Instead, go directly to that business's website to
login to your account.

Make sure you're cautious when you're using your credit card online.
Only enter your credit card number on secure websites that you can be
100% sure are legitimate. To be sure a website is secure, look for https://
in the address field and a padlock icon in the status or address bar of your
internet browser. Taking these extra steps will help you avoid credit card
fraud.

Report Lost or Stolen Credit Cards Immediately

The sooner you report a missing credit card the sooner your credit card
issuer can cancel your credit card and prevent fraudulent charges.
Reporting your lost or stolen credit card as soon as possible lowers the
likelihood that you'll have to pay for any fraudulent charges made on
your credit card. Write down your credit card companies' customer
service number now so you'll have them if your credit cards are ever
missing.
Review Your Billing Statements Each Month
Unauthorized charges on your credit card are the first sign of credit card
fraud. If you notice a charge you didn't make, no matter how small, report
the charge to your credit card issuer immediately. Your credit card issuer
will tell you whether you should close your account and get a new
account number to avoid credit card fraud.

Make Strong Passwords and Keep Them Safe

Your credit card number may be stored in a number of places online. For
example, you may save your credit card on Amazon so you can make one-
click purchases. Make sure you use strong passwords with a combination
of upper- and lower-case characters, numbers, and even characters, and
avoid writing or sharing your password.

Check Gas Stations and Atms for Credit Card Skimmers

Credit card thieves sometimes place credit card skimming devices onto
the credit card readers at gas pumps or ATMs. These skimmers capture
and store your credit card information and credit card thieves come back
later to get the device. Skimmers are placed on the regular credit card
swipe, so if anything looks off about the place you're swiping your credit
card, go to another gas station or ATM.