 "Defrauded? Don't always blame your bank")
When one loses money during a transaction, one is often quick to blame her/his bank. But most such cases relate to the use of technology in banking. While technology has undoubtedly made life easier, it could prove costly if one isn't cautious.
Sharing credit card PIN, OTP
There are several ways in which fraudsters clone credit card details. Skimming (a point-of-sale terminal or a website copying details from the magnetic strip of a card) and phishing (customers being directed to fraudulent websites that store details such as PIN and password) are common. So is vishing, or fraudsters calling customers and convincing them to divulge personal details, such as name, date of birth and expiry date on the card (details required for online transactions). Using these, fraudsters generate a one-time PIN (OTP) that is sent to the customer's mobile number. Then, the customer is convinced to disclose this, too, along with the CVV number (the three-digit number on the reverse of a card); fraudsters might say it is a verification process to redeem reward points, etc.
If the customer discloses these details, there is nothing the bank can do about the transaction.
"If your card has been compromised and the money withdrawn using a correct PIN or OTP number, for all legal purposes, that person is someone who knows the number and therefore, the customer. The possibility of the OTP, which has come only to the customer's mobile, being compromised at three or four levels is very difficult," says Anil Ramachandran, head (retail unsecured assets-credit cards and personal loans), IndusInd Bank.
However, all isn't lost. In most cases, banks help in filing a police complaint, as well as in other legal matters.
Kartik Kaushik, country business manager (consumer banking), Citibank India, says, "For certain categories of disputes, Citibank might provide provisional immediate credit to customers as a service gesture. This could be made permanent, on the basis of the facts of the case and investigation findings. The bank provides support and information to law enforcement, as appropriate."
One should never disclose one's PIN to strangers at automated teller machines (ATMs) or use a public Wi-Fi network for online transactions. Many customers, especially those in rural areas and senior citizens (who aren't tech-savvy) have been cheated by strangers swapping ATM cards and asking for PINs. "This could be a security hazard, as it could reveal sensitive account information to strangers and hackers. Such instances could compromise the security of the account without the bank being at fault," says Adhil Shetty, chief executive of BankBazaar.com.
Kaushik says, "Ensure you use an official mobile banking application by downloading it from the official website. Remember, official apps never ask for storage of personal information on the phone or sharing it with a mail ID."
Transferring funds online to a wrong account
Today, most of us use net banking to transfer funds. If you enter a wrong account number, you have to convince your bank it was an error on your part. All the bank can do is put you in touch with the unintended beneficiary. As banks check only the account number while transferring funds, not the name of the beneficiary, customers should exercise caution while entering the details.
"The bank does not take any responsibility and shall not be liable for claims for incorrect details or data keyed-in by the customer. Since the bank has already remitted the funds to the beneficiary, the transaction will be considered valid," says an official at a private bank.
That is why while transferring funds, banks ask one to key in the beneficiary details twice. As a precaution, most banks don't allow instant transfer of funds. The customer has to first add the beneficiary, which takes up to a day. As such, another level check is introduced.
"Most banks also send SMSes to customers, informing them of the beneficiary being added. If you notice any anomaly, alert your bank immediately. Don't wait till you actually make the transfer because once that is done, reversing it can be a hassle," added the official.
If you enter an account number or IFSC code that is not valid, the transaction is reversed by the second or third day. If that does not happen, contact your bank, which could help get you in touch with the beneficiary branch.
While transferring funds through the Immediate Payment Service or mobiles, customers must be careful about keying in the right mobile number, mobile money identification number, account number and the IFSC code.
Pending credit card payments
There are cases in which customers, seeking to cancel a credit card, stop using it after making the final payment. But if at that point, there are unbilled transactions not reflected in the credit card bill, the card isn't cancelled. Since the customer assumes the card is cancelled, she/he doesn't check the subsequent credit card statements.
"There could be a one- to three-day gap between a credit card transaction and it being reflected on the bill. It might happen that a customer is unaware of this and assumes she/he has repaid all dues. But the amount concerned will continue as outstanding and the customer could be declared a defaulter. This will also impact the customer's credit bureau records. Through a period of, say, five years, the amount could add up to quite a bit," says Ramachandran.
To cancel your card, send a mail to your bank and insist on a written confirmation, he adds.
Not removing hypothecation on your car loan
When you repay your home loan, your bank returns all the original documents relating to the property. Similarly, when you repay a car loan, you must ensure the hypothecation is removed from your car's registration certificate (RC) book. Until this is complete, you will not be able to sell your car. "This document shows who owns the vehicle. So, as long as it remains in the name of the bank, it could be construed the bank is the owner," said the bank official quoted earlier.
Once a car loan is repaid, ensure you get a 'no objection certificate' from the bank. After this, you have to go the regional transport office to get the hypothecation removed from the RC. Also, you have to inform your insurance company the hypothecation has been removed. If not, there could be hassles in case of an insurance claim.
FOR SAFE TRANSACTIONS
Sharing credit card PIN, OTP
There are several ways in which fraudsters clone credit card details. Skimming (a point-of-sale terminal or a website copying details from the magnetic strip of a card) and phishing (customers being directed to fraudulent websites that store details such as PIN and password) are common. So is vishing, or fraudsters calling customers and convincing them to divulge personal details, such as name, date of birth and expiry date on the card (details required for online transactions). Using these, fraudsters generate a one-time PIN (OTP) that is sent to the customer's mobile number. Then, the customer is convinced to disclose this, too, along with the CVV number (the three-digit number on the reverse of a card); fraudsters might say it is a verification process to redeem reward points, etc.
If the customer discloses these details, there is nothing the bank can do about the transaction.
More From This Section
"If your card has been compromised and the money withdrawn using a correct PIN or OTP number, for all legal purposes, that person is someone who knows the number and therefore, the customer. The possibility of the OTP, which has come only to the customer's mobile, being compromised at three or four levels is very difficult," says Anil Ramachandran, head (retail unsecured assets-credit cards and personal loans), IndusInd Bank.
However, all isn't lost. In most cases, banks help in filing a police complaint, as well as in other legal matters.
Kartik Kaushik, country business manager (consumer banking), Citibank India, says, "For certain categories of disputes, Citibank might provide provisional immediate credit to customers as a service gesture. This could be made permanent, on the basis of the facts of the case and investigation findings. The bank provides support and information to law enforcement, as appropriate."
One should never disclose one's PIN to strangers at automated teller machines (ATMs) or use a public Wi-Fi network for online transactions. Many customers, especially those in rural areas and senior citizens (who aren't tech-savvy) have been cheated by strangers swapping ATM cards and asking for PINs. "This could be a security hazard, as it could reveal sensitive account information to strangers and hackers. Such instances could compromise the security of the account without the bank being at fault," says Adhil Shetty, chief executive of BankBazaar.com.
Kaushik says, "Ensure you use an official mobile banking application by downloading it from the official website. Remember, official apps never ask for storage of personal information on the phone or sharing it with a mail ID."
Transferring funds online to a wrong account
Today, most of us use net banking to transfer funds. If you enter a wrong account number, you have to convince your bank it was an error on your part. All the bank can do is put you in touch with the unintended beneficiary. As banks check only the account number while transferring funds, not the name of the beneficiary, customers should exercise caution while entering the details.
"The bank does not take any responsibility and shall not be liable for claims for incorrect details or data keyed-in by the customer. Since the bank has already remitted the funds to the beneficiary, the transaction will be considered valid," says an official at a private bank.
That is why while transferring funds, banks ask one to key in the beneficiary details twice. As a precaution, most banks don't allow instant transfer of funds. The customer has to first add the beneficiary, which takes up to a day. As such, another level check is introduced.
"Most banks also send SMSes to customers, informing them of the beneficiary being added. If you notice any anomaly, alert your bank immediately. Don't wait till you actually make the transfer because once that is done, reversing it can be a hassle," added the official.
If you enter an account number or IFSC code that is not valid, the transaction is reversed by the second or third day. If that does not happen, contact your bank, which could help get you in touch with the beneficiary branch.
While transferring funds through the Immediate Payment Service or mobiles, customers must be careful about keying in the right mobile number, mobile money identification number, account number and the IFSC code.
Pending credit card payments
There are cases in which customers, seeking to cancel a credit card, stop using it after making the final payment. But if at that point, there are unbilled transactions not reflected in the credit card bill, the card isn't cancelled. Since the customer assumes the card is cancelled, she/he doesn't check the subsequent credit card statements.
"There could be a one- to three-day gap between a credit card transaction and it being reflected on the bill. It might happen that a customer is unaware of this and assumes she/he has repaid all dues. But the amount concerned will continue as outstanding and the customer could be declared a defaulter. This will also impact the customer's credit bureau records. Through a period of, say, five years, the amount could add up to quite a bit," says Ramachandran.
To cancel your card, send a mail to your bank and insist on a written confirmation, he adds.
Not removing hypothecation on your car loan
When you repay your home loan, your bank returns all the original documents relating to the property. Similarly, when you repay a car loan, you must ensure the hypothecation is removed from your car's registration certificate (RC) book. Until this is complete, you will not be able to sell your car. "This document shows who owns the vehicle. So, as long as it remains in the name of the bank, it could be construed the bank is the owner," said the bank official quoted earlier.
Once a car loan is repaid, ensure you get a 'no objection certificate' from the bank. After this, you have to go the regional transport office to get the hypothecation removed from the RC. Also, you have to inform your insurance company the hypothecation has been removed. If not, there could be hassles in case of an insurance claim.
FOR SAFE TRANSACTIONS
- Don't share your PIN with anyone
- If a card machine at a restaurant or retail store isn't portable, go to the machine to enter your PIN
- Don't respond to requests for personal information through emails. If in doubt, call the institution that claims to have sent the email
- Routinely review your credit card and bank statements
- Do not post your account details on public platforms