Online Transaction Frauds in India

Online Transaction Frauds in India

Date : 15 Jan, 2019

Post By admin

Online transaction huh! Ring a bell? Yeah, the most used method of transaction of payments these days and unquestionably the easiest and hassle-free. With so many perks why wouldn’t someone be willing to choose other options, right? But with ease comes risk

Well to start with what exactly is an online transaction? Online transaction is a payment method in which the transfer of fund or money happens online over electronic fund transfer. Online transaction process (OLTP) is secure and password protected. Three steps involved in the online transaction are Registration, Placing an order, and, Payment.

Digital payments are evolving, but so are cyber criminals. The internet has become the breeding ground for cybercriminals to commit online crimes like data frauds, theft, and hacking. Criminals are targeting online banking facilities, credit/debit/ATM cards, payment gateways and other net banking techniques to commit illegal transactions. According to a recent survey, cyber crimes rank on #3 in common crimes in India.

Card-present transactions generally make reference to payments during which the card is present at the time of the purchase, such as in-store purchases. While many people associate fraud with digital payments, card-present transactions also display vulnerabilities that allow criminals to get use of their data.

Card-not-present transactions make reference to those transactions in which the cardholder does not present the card physically for a merchant’s visual examination at the time when the payment is effected. And although CNP payments can happen by Mail Order / Telephone Order or even fax, they are usually associated with payments made over the Internet.

Digital payments are classified as card-not-present transactions, and they are a huge target for cyber criminal because it is more difficult for merchants to verify that it is the actual cardholder who is making the purchase.

There are different types of online frauds in transactions: 

●      Friendly fraud: is the type of fraud, which is anything but friendly, happens when a customer makes a digital purchase with their own credit card, and then contacts their credit card issuer to dispute the charge.
In these situations, customers will contact the credit card issuer claiming that the item wasn’t delivered, the item was returned but they didn’t receive a refund, or they don’t remember making the purchase and their credit card has been compromised.
Of course, not all chargebacks are fraudulent – many times these claims might actually be true. However, Friendly Fraud has been a popular method for fraudulent activities in the last few years, and it not only causes direct loss to merchants but also gets them penalized by card issuers.

●      Clean fraud: What makes clean fraud so difficult to detect and prevent is that the fraudsters actually use real data to commit cybercrimes. While Friendly Fraud hides behind fake identities or stolen data, hackers that go for clean fraud usually have a great deal of knowledge about the cardholders and their credit card details, and they use real customer data to fool the systems.
In this type of fraud, the criminal has been able to steal all the necessary real data and uses it to make a purchase that looks legitimate.

●      Identity theft: Another type of online payment fraud that can be quite common is identity theft. In this type of fraud, the imposter obtains key details of personally identifiable information and uses them for fraudulent purchases on the Internet (or elsewhere).
This type of fraud often happens when cybercriminals penetrate firewalls through old security systems, that’s why it’s really important that merchants keep their network security systems always updated.

●      Phishing: is the process of collecting your personal information through emails or websites claiming to be legitimate. This information can include usernames, passwords, credit card numbers, social security numbers, etc. Often times the e-mails direct you to a website where you can update your personal information.   Because these sites often look “official,” they hope you’ll be tricked into disclosing valuable information that you normally would not reveal.

●      Card testing: When fraudsters obtain a bulk of stolen credit and debit card information, they may try to distinguish those already reported to issuers by “testing” each card with low-ticket transactions from trusted businesses and organizations.

However, there are steps that can be taken to avoid these such as:

1)    Who You Purchase Goods and Services From must be taken care of: Install security software, such as AVG, to alert you when a website is a threat - it is your first line of defense. Only buy from reputable websites that have a valid security certificate, otherwise, you may be dealing with a fake version of the actual business, or a dishonest business. A secure site will have a website address that starts with https:// vs. only https:// vs.

2)    Verify Physical Addresses and Reputation: Ensure that there is a physical street address for the company, and verify with the Better Business Bureau that there are no negative reports. Phone numbers are not as useful because with the current technology, it is possible to have a phone number in New Mexico, for instance, but really be based in Ohio, Florida, or even Nigeria. Be on the lookout for very poorly written sales copies – these are sure signs of careless, possibly fraudulent companies.

3)    Requests for Personal Information should be not responded to: There are numerous email scams requesting to verify your personal information. Typically, the email will be similar to a real bank or merchant, and may even take you to a fake website that looks like the real thing. This is called 'phishing' and should be reported to your internet service provider immediately. Never respond, but instead call the number on the back of your credit card or statement with any questions.

4)    Create Complicated Passwords
and change them often:
 Passwords are the gatekeepers of a great deal of information on the internet, and one of the most important to avoid online credit card fraud is to use complicated passwords that are not personally identifiable. Use acronyms or words that are meaningful only to you, then add numbers and alter the case throughout.

5)    Utilize Temporary Credit Card Numbers: Temporary or virtual, credit card numbers are for one-time use only, and cannot be used for any further transactions. Banks have different names for these virtual numbers, but most offer the service and have easy-to-find links on their websites to generate a temporary card number. Use the number like any other credit card number for an online transaction, and it charges your real credit card number one time.

6)    Protect Your Identity: While you can't completely protect yourself against fraud or identity theft, you can take steps to limit the damage should it occur. Many people are inclined to subscribe to credit monitoring protection services, when in fact, you can provide yourself with the first line of defense by simply being vigilant.

All of this can be very complicated and messy, all you need to know about these can be provided at Any issue or problem can be simply expressed via mail at or by calling on +91-9671633666 and we will help you in sorting out all your legal issues.


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