Protecting Our Identity

Today plastic is the convenient, easy and fashionable alternative to wads of paper. With one swipe, credit cards have changed the way we live. Unfortunately, along with the convenience has come related crime. Thus, the primary objective of this article is analysing this problem in a global as well as Indian perspective. An attempt has also been made to enlist the various legal provisions available as remedies if a person suffers from such fraud.

 Credit card fraud involves withdrawal of funds and obtaining of goods and services by using an unauthorized account. Otherwise inaccessible personal information stored on computers is stolen in order to use a card. Due to the virtual explosion of credit card business throughout the world, security has become critical in the entire process. There were about 60 million credit card holders in the sixties and according to an estimate, the number has gone up to more than a trillion now.

In India, credit card companies make a provision in their contract with the client that they, the company, would not be liable for the fraudulent transaction unless the client loses his/her card and reports the loss immediately. Sometimes the banks and credit card companies try to save their skin by inserting a clause in the relevant contract. This is purported to absolve the company in case a fraud occurs on the stolen card and the client fails to notify the loss in time. This unilateral provision however has not stood the test of legal scrutiny. The courts have placed the burden of loss on the issuers.

In India, the Mail Order Telephone Order (MOTO) type account for the bulk of credit card frauds. This occurs when the card is not actually presented, but the details are given on the application form to buy goods or services or when the transaction is done on the telephone.

Fraud through fake cards is not as rampant in India as in the USA. Techniques have been developed whereby the number and other information on the magnetic strip is erased and a new number is embossed. When the card does not work on the swiping machine, the merchant manually processes the details of the card to complete the sale. This procedure is called skimming of the cards.

In the USA, identity theft is also quite prevalent and is supposed to be one of the fastest growing offences in America. The fraudsters adopt another person’s identity to gain access to their monetary sources. In the case of online transactions, ‘site cloning’ is resorted to where the site clone created is made to look like the original site in order to obtain the credit card details of unsuspecting customers. Similarly, false merchant sites are also created where cheap goods lure customers into giving their card details.

Scared by the ever increasing cases of credit card fraud, the affected companies and banks have taken various steps to minimize it. Manual reviews of the transactions on the card are undertaken, but this requires a high level of human intervention and increases costs. In the USA, Address Verification System (AVS) has been developed for use in the ‘card not present’ scenario. The system is designed to check whether the address given by the buyer matches with the one on record.

Visa has devised a Payer Authentication System based on PIN similar to the system used on ATM cards. This is a channel between the bank and the customer used to authorize online transactions. With the increase in cross border ecommerce the issuers in India will have to update their arsenal to combat the forgers on the same lines as their Western counterparts. The Information Technology Act and Rules, passed in 2000, provide penalties for the tampering of computer source documents and hacking of computer systems. No specific mention has, however, been made of Credit cards or financial transactions. The RBI has formed the Credit Information Bureau of India (CIBIL) in collaboration with Dun and Bradstreet who will maintain the records of all individuals who want to avail of finance from banks and credit card companies in India.

The Indian Penal Code contains provisions to check economic crimes such as Bank Fraud, Insurance fraud, Credit card fraud, stock market manipulation, etc. The local police deal with the IPC crimes falling under the broad categories of ‘Cheating’ (Section 415-424), ‘Counterfeiting’ (Coins & Stamps Section 230-263A and Currency Section 489A-489E) and ‘Criminal Breach of Trust’ (Section 405-409).

 

Online Credit Card Offence & Indian Law:

 

So far as Indian legal position is concerned, any offence pertaining to online payment through credit cads will come within the purview of Information Technology Act, 2000 read with relevant provisions of Indian Penal Code, 1860. Section 378 of the Code defines the term “theft” as follows:

 

“Whoever intends to take dishonestly, any property, out of the possession of any person without the consent of that person moves the property in order to such taking, is said to commit theft.”

 

In order to commit theft following elements are required to be satisfied:

(a) The intention must be dishonest.

(b) Such property must be movable in nature.

(c) Such property must be taken out of the possession of its owner.

(d) Such property must be taken without the consent of the owner.

(e) Such property must be removed from its original place to another.

Now we have to examine whether online credit card theft satisfies the abovementioned requirements in order to book the offender to justice. This definition, if interpreted in strict sense, does not include the online theft of credit card information. But, if a merchant dishonestly obtains the blank purchase slip and forges the signature of the cardholder’s signatures on it and thereafter obtains the payment from bank, he can be booked under the offence of forgery.

 

Hacking has become an important tool in the hand of cyber criminals to take away the confidential information relating to credit cards and use it illegally for their personal advantage i.e. purchasing goods or online transaction of money etc.

 

To deal with this menace, our Parliament has been enacted the Information Technology in the year 2000. Following penal provisions of this statute are relevant to mention here.

 

Section 66- This section provides the following penalties for hacking with computer systems:

 

(1) Whoever with the intent to cause or knowing that he is likely to cause wrongful loss or damage to the public or any person destroys or deletes or alters any information residing in a computer resource or diminishes its value or utility or affects it injuriously by any means, commits hack.

(2) Whoever commits hacking shall be punished with imprisonment up to three years, or with fine which may extend up to two lakh rupees, or with both.

The offence under this Section is cognizable and non-bailable.

 

Section 43- Clauses (a), (b) and (g) of Section 43 state that if a person has unauthorized access or secures access to computer, computer system, computer network or downloads copies or extracts any data from such computer, computer system, computer network or even assists another person to facilitate access in the aforesaid manner respectively, he shall be liable to pay damages by way of compensation not exceeding one crore rupees to the person so affected.

It is quite apparent from the above that besides legal protection it is necessary to carefully examine the technological and contractual protection existing within the system because law is not an alternative to other security measures required to be taken by the cardholder while making online payment.

 

 

 

 

 

 

 

 

Conclusion

In India, credit card fraud is mostly limited to the physical space. Online con jobs make up just about 1% of the total numbers here, unlike 40% in the developed world.

But, as consumers graduate to the shop-easy internet and pay with their cards, instances of fraud are bound to rise. While we don’t have statistics, as access to the web increases, reported cases of card fraud are estimated to  rise at 20-30 % every year. In online transactions, contracts are one-sided and the customer is always held responsible in case of fraud.

Phishing, where a consumer gets a fictitious email from a fake site or blog seeking sensitive card information, is a commonly-used defrauding mechanism. To top it, people are careless in offering their card details.

Almost all the banks issuing credit cards issue various guidelines and suggestions to the customers from time to time in order to cut short the rate of credit card frauds and misuse to a minimum possible level.

Thus, we can conclude that with the help of the legal remedies available as cited earlier in the Article, penal action can be brought against the offenders who are held liable for credit card frauds and misuse.

 

 

 

 

 



By: kinshuk jha

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Once you learn about what the different types of identity theft are and what a criminal does with your information, it is easier to protect yourself from becoming an identity theft victim. Because credit card theft is the number one identity theft crime in America, this article will discuss what it is and talk about some ways to reduce the probability of becoming a victim.

Credit card fraud is the number one fraud committed by identity theft criminals and possibly one of the easiest crimes to commit. Credit card fraud is split into two categories with the first method being a thief who actually steals an existing credit card. This is by far the easier crime to commit and luckily is easier to catch. The other option the thief may use is to gain access to your personal information and open a new credit card account that the victim will know nothing about. Many times the thief will use an alternate address and phone number so the victim never sees a bill and will not be aware of a problem until it is too late. There are steps you can take to prevent this type of fraud.

To prevent a thief from stealing your existing credit card you should cancel any credit cards you don’t need or use, pay close attention to your monthly bills, and above all else contact your financial institution immediately if you fail to receive your monthly billing statement. If a thief opens a new credit card account with your social security number it is harder to catch but there are steps you can take to prevent this from happening as well. Number one is the contact the Credit Reporting Agencies and request that no new lines of credit be approved without first seeking your approval. You should also request to be removed from any pre-screened credit offer mailing lists as thieves can steal such offers out of your mailbox or trash.

You should also take advantage of the fact that you can access your credit history twice a year for free to check for any fraudulent activity. For any accounts that have been fraudulently accessed or opened, contact the security departments of the appropriate financial institution immediately. Finally, if you are making purchases online you should use a credit card instead of a debit card. Let me explain.

Debit cards are legally riskier than traditional ATM cards or credit cards. While you are only liable for $50 if your credit card is used fraudulently, you may be liable for $500 or more if your debit card is misused plus the fact that the thief can drain your account dry and leave you broke until you get things worked out with your bank. In addition to this fact, debit cards offer much less protection then a credit card because with a credit card, you have certain legal rights to dispute fraudulent charges. If you suspect that your credit card or debit card has been compromised then you should contact your financial institution and cancel the card and put a hold on your funds.

You should now be aware that identity theft in general and credit card fraud in particular can happen to anybody. While there is no 100% guarantee that you wont become a victim of credit card fraud, taking the above steps can dramatically reduce the possibility. The important thing is that you take action to protect yourself now before it is too late. If you feel that you are not up to handling all the details then there are identity theft programs available such as the one offered by LifeLock which can take care of everything for a monthly fee.



By: Rick Churchill

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The rampant use of credit cards, and especially that use compounded by the secret avenues of the internet, can put the common consumer in a substantially vulnerable position to become a victim of fraud. Much like computer viruses and the necessary adjustments made by internet providers, card companies and merchants are vigilantly combating fraud as it occurs and thinking of new ways to pre-empt it before it can hit. The cost of fraud is high, over 500 million pounds in the UK alone in 2004 so finding ways to anticipate and curtail the damage caused by fraud, is like the credit card industry itself, very big business.

Everyone wants a piece of the fraud protection trade. Credit card companies offer their own incentives and programs and advertise them through clever ads starring Donald Trump, Viking marauders, and unwitting customers channeling the voices of the thieves who made them victims. Internet sites like Scambusters dot com and Merchant911 dot com protect consumers and merchants respectively. Often these services are free, or just provide a forum within which consumers and merchants can share information regarding recent scams. Even email, which can easily be harvested for numbers being sent back and forth in transactions, is a potent medium through which consumers can communicate with each other about impending threats or even scams in progress. Though the elimination of fraud is an impossibility, its reduction is possible due to recent innovations in fraud prevention such as security chips, picture id’s and the increasing awareness of online merchants.

Company databases often unwittingly supply massive amounts of credit card information to hackers, having conveniently kept it all in one place. Often, the merchant himself will be responsible for payment of the fraud if it is found that improper steps were taken to ascertain the purchaser’s identity and/or adequately protect the identity of their consumer’s. The purchases most at risk for fraud are “card not present” purchases. Sites like Merchant911.com list fraud screening sites like: preCharge, MaxMind, Cardinal Commerce, FraudSmack, WhyLabs and Merchant Sense all of them offering fraud-screening services to the merchant community, specifically e-merchants who deal exclusively with “card not present” scenarios. Consumers have other resources, including identity theft protection software, many of these offered by ClearCommerce.

Though the dangers of “card not present” shopping are manifold, the convenience and ease of shopping from home will likely do little do deter even the most nervous consumer. Though fraud may never be eradicated, online services, software and common sense go along way towards total protection.



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Identity theft is not limited to credit card fraud. This nasty cyber crime can steal your Social Security Number, your name, and even your retirement claims. Billions of Americans and Britons have been victimized by cyber thieves who prey on the unwary. So don’t wait to wake up to a pile of credit card purchases you did not make or to the horrors of a cleaned-out bank account. Do something now.

What is Identity Theft?

For every positive innovation, there’s always a sinister checkmate. If the Internet has made lives easier and convenient, it has also spawned a new breed of miscreants - the identity thieves and the hackers who bilk billions of dollars from the hundreds of thousands of people using the Internet for their online transactions.

The government is not even spared. Sensitive emails and information vanish without trace, putting at risk the credibility of government organizations to manage massive information.

Identity theft or identity fraud is a crime. The criminal uses your name, credit card, or Social Security number for his economic gain. All your money in the bank will be skimmed off by fraudsters who chance on your personal financial information. What if the money is all your life’s savings? This would be a tragedy indeed. Worse, the hackers can use your credit card to access child pornography websites. You can be charged and jailed for something somebody else did. The black hacker can destroy your life and reputation in minutes.

Fortunately, identity theft is now considered a federal crime and can draw stiff penalties. The move to make it a federal crime in 1998 provides victims the recourse for restitution

What to Do

Do you have several bank accounts? Are you paying for purchases online using your credit card? Are you using telephone calling cards? To counter identity theft before you amass mountains of credit or find out that you have no more money in the bank, these useful tips can help you guard against cyber predators.

Be vigilant and regularly monitor your bank statements and accounts every month. Review your credit card report and if it happens that you catch on to some suspicious purchases, report this immediately to the credit card company before more damage can be done.

Check your cyber banking accounts regularly and change your password frequently. For your passwords, do not use a word in the dictionary. Instead used words and numbers at random, and don’t give your password to anybody. You are in a secured page when you see the https:// prefix rather than the usual http://.

Watch out for fraudulent mails asking for your personal information. If the mails purports itself to come from a legitimate source, call the office and make inquiries, but never divulge information over the phone. Hackers have a way with the telephone network too.

Remember that banks never ask for information via emails, so be wary of any emails or telephone calls asking for your information, no matter how realistic these appear or sound. In addition, don’t throw your bank account information, bank withdrawal slips, or pre-approved credit card applications into your trash. Cunning fraudsters sweep the dumpsters looking for these slips. Once they find one, they’ll go on a credit card binge.

Read up on the laws on identity theft and ways to protect yourself. Once you’re snared, the damage is done. It is not easy to undo the damage of identity theft. It may even take years before you can restore your reputation and your sanity. So why wait until identity thieves take over your life?



By: Bradlley Mckoy

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Credit card fraud is a constant cause of concern for almost every credit card or debit card user. After all, having your credit card details stolen means that it’s more than your money that is in danger of being taken away from you - your name, personal address and your personal identity will all be under threat as well. The last major credit card scandal to rock news headlines, for instance, occurred in March 2007 when US company TJX, the owners of UK retail outlet TK Maxx, revealed that at least 45.7 million payment card details from its customers had been stolen by hackers.

While the TK Maxx credit card scandal sent shockwaves through the credit card statements of many UK consumers, it’s important to see the scale of this particular case as an anomaly rather than the norm. In fact, a recent survey by APACS, the UK payments association, shows that total card fraud losses have continued to fall between 2004 and 2006. Last year, total card fraud losses across the UK stood at £428 million - that’s three per cent lower than 2005’s figure of £439.4 million. In turn, the 2005 statistics were an improvement from 2004, at which time total card fraud accounted for over £500 million.

While fraud on stolen or lost cards and mail-non receipt fraud dropped significantly in 2006 - by a staggering 23 per cent and 62 per cent respectively - other types of card fraud are still on the up. The biggest increase in credit card fraud has been in the card-not-present category - by which card fraud that has occurred over the phone, mail or internet. This category saw fraud rise by a whole 16 per cent.

In fact, online card fraud has been a major concern for many consumers of late as the breadth of the goods and services offered on the internet means that more and more people are paying for products over the internet. However, many credit card companies are taking action to ensure that credit card fraud due to online payments is as minimal as possible.

Visa, for instance, have just launched Verified by Visa - a new service that, once activated, requires the cardholder to enter a personally-set password every time they make a payment online. By using this identity protecting format, Verified by Visa technology allows Visa cardholders to minimise the risk of having their card details stolen online and offers a new method of online payments that is sure to see results.

If you’re looking for a new credit card provider online, and credit card security is one of your primary concerns, you’ll be able to compare credit cards over the internet to establish which credit card companies offer you the best safeguards against security and card fraud. Of course, whatever credit card company you ultimately opt for, it’s always crucial to adhere to basic preventative advice - such as not giving your credit card to any person you don’t trust, and not throwing away your card when it’s expired, but cutting it up instead. Taking these basic precautions against card fraud will minimise the risk of identity theft and will bolster any protection your credit card company might be able to give you.



By: Adam Singleton

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You heard right. Identity Theft is THE fastest growing crime wave in America. Why? Because it’s easy and doesn’t require someone to break into your home to make off with the goods. They can get them right out of your trash!

According to the U.S. Postal Service, one reason is the carelessness of how many of us handle sensitive documents. One of the best investments you can make for your home or office is a paper shredder. There are people who make a living out of looking for a copy of someone’s un-shredded bank statement, credit card bill, tax return or any number of documents with sensitive account numbers!

This article is an attempt to educate you of those dangers and give you some genuine facts and a solution or two. If you have ever known someone who had their identity stolen then you know what we are about to tell you is true.

Last year alone, more than 9.9 million Americans were victims of identity theft, a five billion dollar crime wave!

The number of id theft victims and their total losses are probably much higher. It’s hard to pin down, because law enforcement agencies may classify id theft differently - it can involve credit card fraud, Internet fraud, or mail theft, among other crimes. It can even involve your credit report because when you order a copy of yours unless you request that only the last 4 digits be listed, the entire number is there just waiting to be stolen! I know this myself because I recently ordered my credit report be mailed to me and there was my entire social security number on EVERY page for all to see!

The FTC (Federal Trade Commission) reported that only four percent of victims cited stolen mail as the source of personal information. Even so, U.S. Postal Inspectors, charged with protecting the nation’s mail system from criminal misuse, are leaders in the fight against identity theft.

What Should I Do If I Am A Victim of Identity Theft?

According to the FTC, if you are a victim of identity theft there are four steps you should take as soon as possible, and keep a record with the details of your conversations and copies of all correspondence.

Place a fraud alert on your credit reports, and review your credit reports.

Fraud alerts can help prevent an identity thief from opening any more accounts in your name. But one is too many.

One of the best favors you can do for yourself is order LifeLock the guaranteed Identity Theft program. When we set our site up we decided to only recommend vendors that we had confidence in personally.

What sold us on LifeLock? The fact that their founder and CEO Todd Davis does their advertising and gives his Social Security number in all their ads. When I first heard this I figured it had to be an advertising ploy. After further checking them out both my daughter and I both signed up. They have lived up to everything they said and as a bonus we stopped getting those pre-approved credit card offers and the majority of our junk mail also stopped.

Here is what LifeLock says about themselves:

Stop Identity Theft. Guaranteed.

By now you’ve heard the stories about individuals whose identities have been stolen by identity thieves. They’re not pretty stories . . . people working for hundreds of hours over many years to get their lives back in order, even innocent individuals ending up in jail! We can protect against this ever happening to you. Guaranteed. Up to $1 million.

LifeLock doesn’t just report unauthorized use of your credit information, we prevent it by working with the credit bureaus to make sure you’re contacted to approve any credit transaction before it takes place. We also remove your name from pre-approved credit card offers and junk-mail lists, where identity theft often gets started.

We’re the leaders in proactive identity theft protection as you’ve probably seen in coverage in The Wall Street Journal and Chicago Tribune, and on MSNBC, CNN, and many other national news outlets. We’re so sure of our system our CEO confidently publishes his own Social Security number in all our ads.

Is this fraud alert something you can do yourself? Yes however since this is not a priority with most people it will get put off until it’s too late. Then you have to un-do what could have been prevented in the first place for approximately 33 cents a day. That’s pretty cheap insurance. This is an investment in protecting your peace of mind and your good name as well.

If you’ve already become the victim of id theft you can contact them for help on getting your good name back!

With the increase of identity theft, I wouldn’t put it off another day. Once your identity is compromised it can take months or years to get it fixed. Contact LifeLock today.



By: Dewey Kearney

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