Debit Card payment or ATM cash withdrawal is very common these days. Trust me the payment systems in India is one of the securest in the world. Thanks to the Govt and RBI for the steps taken. In India, we have two step authentication for online payment, unlike outside India therefore it is more secure. As i shared in previous posts that the payment through debit card is same as a cash payment from your savings account. There is a big debate whether to use a credit card or debit card for online transactions. I discussed the same in my post, Why I Prefer Credit Card Payment over Debit Card?
Even though the RBI has taken very stringent steps but a financial fraud cannot be ruled. It is more painful in case of a debit card. Besides fraud, you should always remember that carrying a debit card is like carrying a cash in the pocket. For example, if have 5L in cash and i carry with me every day. In this case, i will be extra cautious and cash in the pocket will bother me till i safely return home. On the other hand, if i have 5L in my savings account and carrying a debit card with me then i will be very casual about it. The reason being, i am carrying a virtual money whereas cash is physical currency. Still, it is not 100% safe. Always remember that senior citizens and women are easy targets for financial frauds and such incidences. Some of the security experts suggest you carry a debit card with min/required balance. The debit card of savings account with high balance should be safely kept in locker at home :)
Trust me most of the times directly or indirectly we are responsible for financial frauds and such incidences. How? I will explain it later along with the real life examples. Before we proceed, i suggest you check my post, 11 Tips to avoid Credit Card Fraud. This post can be considered as an extension of said post but more relevant for debit cards.
5 Risky Places You Should Avoid To Swipe or Use Your Debit Card
1. Payment over IVR (Interactive Voice Response):
Many people are not aware that you can make debit card or credit card payment through IVR. Though it is 2 step authentication but tricksters find out the ways to cheat the customer. Even though IVR payment is not so common in India but tricksters use it. Recently, One of the readers of this blog shared his ordeal with me.
Mr. Prakash from Gurgaon is an IT professional. One day he posted his travel plans on social media site. He received a call and the executive pretends as if she is calling from the airline in which he was supposed to travel. She told that airline just received a message from payment gateway that the payment for his ticket booking has failed. The ticket was booked for approx Rs 6000. She gave him 2 options. The first one to book a new ticket for Rs 9500. The second one was to immediately make a payment of Rs 6000 over IVR to avoid cancellation. In such circumstances, you don’t have much time to think. Prakash agreed to make a payment over IVR. He entered his debit card details, CVV no, date of expiry and OTP so that it sounds genuine. Please note that OTP is valid for 15 mins so can be misused. There was nothing to suspect in this whole interaction.
After few hours, he received an SMS that his savings account is debited with Rs 75,000 for online purchase on some foreign website. The IP address was of an African country. Now, in this case, the modus operandi is that the call was made from laptop/desktop with a keylogger. All the details were captured and the debit card is used from outside India. The transaction can be easily tracked in India but outside India means the customer lost his money. The mobile no and SIM used for the call was stolen. It’s an organized mafia.
The golden rule is to never make any payment through IVR if the call is Incoming. You can call the helpline no mentioned on the official website and then make the IVR payment. It happens sometimes that the call gets disconnected and you receive a callback. Even in such cases you can politely refuse and tell the executive that you will call the helpline no and make IVR payment.
2. ATM’s at Isolated Places:
It is always advisable not to use ATM’s at isolated places. Recently, i observed that one of the leading banks has tied up with the local laundry chain in Bangalore. They installed their ATM’s in laundry shops and timings are fixed till 8 PM. In some cases, these laundry shops are located at isolated places or upcoming areas & ATM is open until 11 PM.
One day i was returning late from the airport and was running out of cash. I told the cab driver to stop nearby ATM in laundry shop and the place was isolated. The driver suggested against the same. He told that there is a high possibility of theft and loot. He shared a couple of incidences with me. Most of these low-value incidences are not reported to police.
As a golden rule, you should prefer to withdraw cash using a debit card from ATM’s located in the Bank branch and that too during day time.
3. White label ATMs:
In order to increase the penetration of ATM’s, RBI allowed White label ATM’s. In layman terms, white label ATM is the one that is not owned by the bank. You may find such ATM’s mostly in rural and semi-urban areas. ATM is a very lucrative business if you get it right. The break even period is very short.
From a customer perspective, i personally avoid white label ATM though the nearest ATM from my house is white label ATM :) The reason being, whom to approach in the case of a dispute? One of my neighbors had an issue in past. The bank that issued a debit card put the onus on ATM provider whereas ATM provider put the onus on the debit card issuer. As the amount was small therefore my neighbor give up. He took an oath that in future he will only use ATM of the bank that issued the debit card.
4. Small Stores or Retail Outlets:
Personally, i am scared of swiping or using my debit card on small stores or retail outlets. The probability of debit card skimming is high in such stores. I had a dramatic experience in a medical store. After entering details, my debit card payment failed. The retailer swiped my card on two other POS machines but every time payment failed. Finally, i paid cash. After that, i never used a debit card in small stores or retail outlets. Though some of the banks have launched contactless cards mostly credit cards but there are not many POS to support the same. It is very secure and safe payment.
Recently RBI has mandated all the banks to replace magnetic strip debit cards with EMV Chip + PIN debit cards by December 2018. No further extension will be granted to the banks. Therefore, if your card is not an EMV chip debit card, you may avoid using the same at small stores or retail outlets.
5. Mandatory to Save Debit Card details:
It is the most irritating part when the e-commerce site either save your debit card details without your consent or don’t allow payment without opting for the option to save card details. I am very careful and particular about all these issues. Many people think that it is safe. Always remember that your debit card details are stored on 3rd party server. If someone breaches security then your card will be at risk. In past, there are multiple instances when the card details of the customers stored by e-commerce sites were compromised.
One of the online food ordering sites is very notorious. At the time of 2nd order, i realized that the website stored my debit card details used to place first order. There was an offer to use debit card of bank A and get 20% off on first order. My nightmare begins when i was told that there is NO option available to de-link debit card through the website. It is possible only through a mobile app. I had to download the mobile app to de-link the card details.
Similarly, On the e-commerce site of one of the leading MNC’s, it is mandatory to store the card details. I hate it but as i shared in my post, Online Shoppers – 5 Trends that can burn a hole in your pocket that the approach is to take it or leave it. Now i am extra cautious during an online purchase. The alternative in such cases is to either use Mobile Wallet payment or Cash on Delivery.
The message is loud and clear that always use your card safely.
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