Exposed: Credit card fraud in Malaysia
Beware of Exchanged Credit Card
Johan had a close call with credit card fraud recently when he visited a new restaurant. After finishing his meal, he asked for the bill from the waitress. And when the bill came, he passed his credit card to her to make the payment. After a few minutes, she returned with the credit card receipt to be signed by Johan.
Most of the time, Johan would just sign the receipt and put the card and his copy of the receipt back in his wallet. However, this time, he checked his card before returning it to his wallet and he realised that the card, though is from the same bank, is not his
card, but an expired card belonging to someone else.
He immediately told the waitress about the problem, and the waitress took the card back from him and quickly exchanged it with the actual card at the payment counter without batting an eye. This incident taught Johan something: the importance of checking your credit card every time it leaves your sight, even just for a few seconds.
The above is just one of the common ways people try to conduct credit card fraud. There are, unfortunately, thousands of credit card fraud cases committed in a dozen ways, many of which are much more sophisticated than the ploy Johan almost fell for.
Some credit card fraud victims reported that the cashier tried to capture the photo of their cards discreetly using their smartphone, while some tried to clone their credit cards on the go. Therefore, credit card users are advised to be alert and always check that the card is with them at all times and has not been tampered with.
In June this year, a Malaysian hairstylist landed in a RM200,000 debt due to credit card fraud. According to Michael Chong, the Department Head of MCA Public Services and Complaints Department, he had received 13 cases of credit card fraud this year with losses amounting to RM662,000.
In Bank Negara Malaysia’s effort to curb credit card fraud in Malaysia, almost all credit cards issued had been replaced with chip cards, and Point-of-Sale terminals have also been upgraded to accept chip cards, as of end 2004.
With the implementation of the chip cards, credit card fraud cases declined by 43.2% for the first half of the year 2005, compared to the first half of 2004. Malaysia is the leading country in the region adopting EMV chip infrastructure to address counterfeit fraud.
Since then, fraudsters have been getting smarter and have cracked the chip for credit cards. Therefore, credit cards users are still encouraged to be careful and alert with their credit cards and the transactions made. Credit card users are advised to inculcate good credit card habits to avoid credit card fraud.
Some of the habits to become a savvy credit user are:
1. Treat your cards like cash. Use your card prudently to avoid paying high amount on interest.
2. Keep your card number confidential. Do not write it down and share it with anyone, or let others take a photo of your card.
3. Sign at the back of your new card immediately using permanent ink pen.
4. Cut up your old credit cards when they expired.
5. Check your card when it is returned to you by the cashier to ensure that it is yours and it has not been tampered with in any way.
6. Keep your receipts so that you can check them against your statement.
7. Inform your card issuer immediately if unfamiliar transactions are posted on your statement.
8. Keep your statements in a safe place, or shred and dispose them.
9. Notify your credit card issuer of any change of address to avoid having your statements sent to the old address.
10. Notify your bank immediately if you have lost your card.
11. Carry out online transactions only with reputable companies. Ensure that the websites have security features.
12. Avoid responding to emails, SMSes or phone calls that request for credit card information.
If you suspect you have fallen victim to credit card fraud, the first thing you need to do is contact your bank (the credit card issuer) to cancel the card immediately. Then, the next thing to do is to lodge a police report.
Bank Negara Malaysia has set out in Clause 13.2 of Bank Negara’s Credit Card Guideline that they should not have to pay more than RM250, for fraudulent transactions carried out using their lost or stolen cards.
The cardholders will have to proof that they had not acted fraudulently and had informed the banks about the lost or stolen cards as soon as possible. Therefore, it is of utmost importance for cardholders to consistently and regularly check their cards to ensure that they are not lost or stolen.
If Johan was not careful and alert, his card would have been stolen and used for numerous insignificant transactions that can amount to a huge debt. Credit cards, a payment method that is supposedly safer than carrying around a bundle of cash, is vulnerable and prone to fraud. However, inculcating good credit card habits can make a difference in thwarting such attempts.
Learn more about the anatomy of a credit card transaction with this infographic to be a savvier credit card user.
Looking for a perfect credit card suited for your needs? Compare all credit cards in Malaysia here.