Banks should do more to prevent credit card fraud
A personal identification number could be introduced to authorise credit card payments and minimise fraud. Photo: Reuters
My family has been bothered by credit card fraud for the past 15 months. I have experienced fake transactions overseas, as have my wife, son and daughter with their respective cards (Contesting a credit card transaction; May 1).
In my daughter’s case, her card had not even been activated for use, while my wife’s card had only been used for payments in Singapore.
The banks viewed the fraudulent transactions as unusual, and alerted us via SMS.
Several of my friends have experienced similar incidents.
The banks did not, however, explain to us how these transactions could have occurred, or how we could avoid such scams.
These days, with payWave, a lost or stolen credit card can easily be used for small payments, which with multiple transactions, can prove costly to cardholders.
With smart chips — instead of only magnetic strips — being incorporated in credit cards these days, one wonders why credit card fraud is still so prevalent.
I suggest that credit cards have a personal identification number to authorise payments, like in Malaysia and Canada.
Banks should educate their customers on the ways to avoid credit card fraud and explain to cardholders the circumstances leading to their card being compromised.
Some cardholders are only occasional mobile phone users, so SMS warnings about a possible fraudulent transaction may only be seen much later and may not always be effective. Instead of a text message, a call could be better.
Of course, travellers can activate their credit cards when they are going abroad and deactivate them when they come home, although this is troublesome for frequent travellers. Can the banks offer a more practical solution?
These transactions create anxiety for cardholders, financial and other costs for banks, plus higher premiums for fraud insurance. We need a fix to these problems.
