Sharp rise in Internet related bank frauds: Banking Ombudsman

There was a sharp increase in complaints relating to Internet related bank frauds. The total number of complaints increased marginally from 3,486 in 2011-12 to 3,494 in 2012-13. The complaints related to credit card and Internet based transactions increased from 732 to 1,279 as per Banking Ombudsman for Karnataka M. Palanisamy.
Reserve Bank of India (RBI) has adopted new guidelines that require banks to ensure that customers authenticate through an alternative network typically via a text message which make Card based transactions more secure. The online transactions through net banking channels or using credit cards remain a concern for not only the banks but for the regulator also.

How did fraudulent transactions happen?

The scamsters who were mainly based overseas skimmed the details on the debit or credit cards of ordinary people including drivers, housewives and mechanics. The uncertified websites such as lyca.uk, sports.com, entropay.uk and denguemail.ru were among those that pilfered their victims by drawing money in foreign currency. There were a few cases of Indians as in one of the case a gang in Bangalore masked IP addresses to make it appear to the user that the website was based overseas. In most cases the banks have re-credited the disputed amounts to the victims. The possible explanation for the banks’ readiness to settle disputes could be the burden of proof on them to establish that they had not been responsible for the user id or password being compromised.

Month: Current Affairs - August, 2013