5 mantras to prevent ATM and online banking frauds

Bharat Panchal, Head Risk Management, National Payment Corporation of India

Payment system in India has undergone a revolution in recent years. Today, there is hardly a need to visit a bank, as everything is either available at ATM or online. National Payment Corporation of India (NPCI) has made transaction banking simple, affordable, and secure with access to 200,000 ATMs under National Finance Switch (NFS) and Immediate Payment Service (IMPS).

The electronification of all payment channels has indeed made banking easy and convenient, but at the same time has led to security issues, with fraudsters stealing  customers’ account credentials using various modus operandi. In India, for instance, ATM and Internet banking fraud noticeably increased last year.

COMMON FRAUD TECHNIQUES

ATMs operate with mainly two important inputs, ie, physical ATM card and a PIN code. Information pertaining to your account and other detail is stored on the magnetic stripe, which is embossed on the back of the debit or credit card. Fraudsters are using a technique called skimming to read the information available on the magnetic stripe to collect data of your card.

In this technique, fraudsters attach a device to the ATM that can be very difficult to detect. When you swipe or insert your ATM card, the skimming device will skim (copy) the data from the magnetic stripe. At the same time, a tiny camera is also fixed in the ATM machine room in such a direction, so that the fraudster can record your PIN code. With this information,a duplicate debit card can be created using the information skimmed from the magnetic stripe. Combined with the PIN code, the duplicate card can be used to withdraw cash from ATMs.

Internet banking fraud is also rising rapidly. The major cause of this type of fraud is social engineering of vishing technique. Vishing is a fraud technique where fraudsters try to seek your personal information like customer ID, net banking password, ATM PIN, OTP, card expiry date, CVV,  etc, through a phone call. Most of the time they pretend as a representative of your bank. They give various reasons as to why they need this information.

For example, expiry of your card, blocking of PIN number, reactivation of account, encashing of reward points, sending a new card, etc. Sometimes, they even threaten to block the account permanently if these credentials are not shared. Out of fear, customers share their vital information, which is then used to conduct fraudulent activities/ transactions on the customer’s account.

While banks have taken adequate measures to protect customers from such frauds, there are important things which customers must remember and put in practice while doing transactions via ATM, POS or Internet. Following five mantras will help ensure robust protection against fraud:

1. COVER YOUR PIN CODE

By covering the keypad with one hand while you enter your personal identification number, you can make sure that no one collects this piece of information. This ensures that no one is able to steal your PIN even if there is any camera installed for recording. In case if you are using the card at any shop, restaurant or petrol pump, never let the shopkeeper or attendant take your card out of your sight. There is no need for him/her to do so, unless he/she intends to do something unlawful.

2.  REGISTER YOUR MOBILE NUMBER FOR TRANSACTION ALERTS FROM YOUR BANK

Today, all banks give you the facility to get alerts through an SMS or via email for every transaction you do. It is important to register your mobile number with your bank to get an immediate alert through an SMS. Once such registration is done, your bank will immediately send a text message to your registered mobile phone whenever any transaction is done using your ATM card or net banking. With such alerts, you will know right away if your card or account has been used for any fraudulent transaction.

3. CHECK YOUR ACCOUNT REGULARLY

It’s very important to know the status of your account periodically to verify the transactions you did recently. In many cases it is noticed that customers come to know very late about fraudulent transactions. Regular checking of bank account will enable you to notice any abnormal activity on your account.

4. USE TWO-FACTOR AUTHENTICATION FOR EVERY TRANSACTION

Most of the banks give the facility of two-factor authentication. This means username and password is not sufficient for signing into your account. Along with username and password, you may also require to enter OTP (One Time Password) in a text message sent to your mobile phone, or an email sent to your account. This is a very useful option to minimize the damage, as the value of OTP is dynamic and changes every time. Since it is sent on your mobile, even if your username and password are stolen, it’s not possible to misuse the account.

5. NEVER SHARE YOUR ACCOUNT OR CARD DETAILS WITH ANYONE

Banking system is very secure and requires minimal human intervention while you do transaction be at an ATM or online. Your password or PIN code is generated securely so that only you know it. There is no need for a bank or anyone to know about your password or PIN. Further, no bank asks its customers to reveal their password or PIN number in any condition. So never share any personal information like customer ID, ATM PIN, OTP, etc, over the phone, SMS or email.

There have been instances where fraudsters claim to be bank staff or representatives from organizations like RuPay, Visa, MasterCard, RBI, LIC, etc, and ask customers to  share their PIN no and password for verification purpose. It is advisable to disconnect such calls without sharing any detail.

Technology has its own limitation to prevent cases of fraud. Unless customers are not alert or cautious, it would be impossible to prevent it. In case you suspect any fraudulent activity, report it immediately to your bank as soon as it happens.