How To Buy Online, Safely
Ever been hit by credit card fraud?
 
I have. Well….My wife has. 
 
Her phone rang at 1.35am. The bank’s credit card chaps were asking if she had done any transactions on her credit card from an East European country. 
Of course not, she said. 
 
But there they were, three transactions totaling Rs37,000 in the space of two minutes. 
 
Of course, the fraud detection system of the bank spotted these ‘suspicious’ transactions and blocked any further hits. 
 
But the damage had been done.
 
What followed was laborious and painful:
 
- The card was blocked. It took three weeks for a new card to arrive.
- I went to the police station to lodge a complaint. When the cops heard that it was a credit card, and not a debit card, they lost interest. They gave me a tiny (paper) cup of tea, though, and addressed me as ‘Kaku’ – very polite cops.
- I lodged a ‘chargeback’ with the bank. That became a long-drawn affair.
 
If you are not savvy about what a ‘chargeback’ is, it might help to know. 
 
If you find a transaction(s) on your credit card which you have not done, you can file a chargeback which is, essentially, denying the transaction and demanding a refund. 
 
Some banks give you the refund quickly, others don’t. 
 
In my wife’s case, the bank asked for proof that she was not in that East European country at the time. That meant showing her passport, bereft of visa, airport exit stamp, etc. 
 
Unfortunately, her passport was with the Spanish Embassy in Delhi awaiting a visit visa stamp. 
 
To cut a long story short – yes, she did get the refund, but only after protracted correspondence and many weeks.
 
Question was: How did the fraud happen?
 
My wife used her card only for online shopping and, hence, somehow the hackers had got hold of her card details from one such purchase.
 
To explain, my wife does all the shopping in my house, online. She was an early adapter of online buying. 
 
Now that COVID is firmly amongst us, buying online is a very attractive way to get what you need. 
 
More and more people are buying online these days and this may well become an ingrained habit even after COVID finally goes away.
 
So how can people buy online safely?
 
The problem with using a credit card for online transactions is – the unused limit. 
 
Your card may have a limit if, say, Rs1 lakh, of which some Rs15,000 may be outstanding now. That means you have a ‘free limit’ of Rs85,000. 
 
Your next online purchase using the card may be for just Rs2,000, but that still leaves an unused limit of Rs83,000. If a hacker gets hold of your card details, (s)he could gobble up most of it within a few minutes.
 
(Care – online vendors like to save your credit card details, except the CVV (card verification value) number at the back of your card, ostensibly to spare you the effort of filling in all the details every time you shop online. Often the details are saved by default, unless you specifically refuse. I suggest you do refuse.)
 
I asked several banks for a credit card with a small limit, based on the idea that if the limit was small, the unused limit would be smaller still, and the damage that a hacker could do would be ’limit’-ed.
 
Unfortunately, none of the banks would give me a credit card with a small limit, even as a supplementary card. The minimum limit for a card was of the order of Rs50,000.
 
My wife, an ex-banker herself, came up with an idea. She opened a new savings account in her name and got herself a debit card and online access. 
 
She put Rs10,000 in the account and used this debit card to do all her online shopping. 
 
When the balance in the account ran down to the ‘minimum balance’ level, she topped up the account (back to Rs 10,000) by transferring money into it from our main savings account – online transfer, of course.
 
This worked quite well. The risk of any fraud hitting the debit card or the bank account was now limited to Rs10,000 or less. Besides, I like to think that hackers are not interested in debit cards.
 
There were two small issues, though.
 
My wife loved the points and cashbacks that came with her credit card.
 
After months and months of online buying, some points would accumulate and then we would ponder over the list of gifts that could be exchanged for points, ultimately rejecting them all as either useless or beyond our reach with the points at hand.
 
The other issue was related to the account or card. 
 
Firstly, unless the minimum balance is maintained the banks hits you with a hefty penalty, and, hence, the risk of fraud cannot be brought down below the minimum balance level. 
Secondly, this method requires repeated topping-up of the savings account, a bit of a pain.
 
Then my wife, innovative as she is, found another method. 
 
She revived her unused Paytm account and started using it for buying online. To her delight, most of the online vendors accepted Paytm. 
 
Now she could run down her Paytm balance to almost nothing before topping it up through her phone. The funding of a Paytm account takes much less effort than doing an online transfer to a bank account. 
 
(Disclaimer – I am NOT in any way a canvasser for Paytm. Any virtual ‘wallet’ will do exactly the same for you. There are many choices, the RuPay card or the SBI EZ Pay card, for example. Some cards allow you to withdraw your balance money through an ATM. Please choose whichever wallet you like if you want to follow this route.)
 
Bottom line –if you are into online buying, protect yourself from fraud, as my wife has done after being burnt once. 
 
And if you are not, and prefer to go to the bazaar and the kirana shop, protect yourself against COVID and pickpockets.
 
(Deserting engineering after a year in a factory, Amitabha Banerjee did an MBA in the US and returned to India. Choosing work-to-live over live-to-work, he joined banking and worked for various banks in India and the Middle East. Post retirement, he returned to his hometown Kolkata and is now spending his golden years travelling the world (until Covid, that is), playing bridge, befriending Netflix & Prime Video and writing in his wife’s travel blog.)
 
 
Comments
Amitabha Banerjee
4 months ago
Hello Mr Ravi. I cannot answer your question. Hackers keep getting smarter, and security measures are continually enhanced. Hard to say what is safe and to what degree. All we lay persons can do is to use whatever presents the lowest risk with minimal effort. That is why wallets are a reasonably safe way to buy online.
Ch Ravi
4 months ago
How about net banking?
is it safer than Credit and Debit Card?
Dilip Modi
4 months ago
Dear Mr. Banerjee, ref use of CC article, I was under the impression that the cardholder can set the limit, downwards by log in to the account. At least 2 of my banks seem to have this feature of choosing, spend limit, type of transactions permitted like online, POS, international, ATM, etc. Yes, it does mean adjusting the spending limit after each transaction to minimize fraudulent use.
Amitabha Banerjee
Replied to Dilip Modi comment 4 months ago
You are right, Mr Modi. You can do this, but it does take a little more effort.
vinayvgk
4 months ago
Sir now many banks provide limit reduction in App itself for daily limit, transactions limit etc.

Nowadays exposing a new bank account, for online transactions with different mobile number is most needed .

One should use email id and mobile for main bank account where major savings are invested.

Rbi has customer friendly rules now.

Best way is use wallets for retail payments, petrol pump etc.
Small saving account for other retail payment.
Nahom
4 months ago
Seems you have left lot of Carbon footprints.
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