What is Fraudulent Transaction and How it can be Avoided

A transaction fraud or a payment fraud occurs when a fraudster or a cybercriminal carries out a fraudulent payment or transaction through your stolen Credit Card, Debit Card or NetBanking. This type of purchase is an unauthorised transaction and purchase. The fraudster divests the victim of personal property, funds, interest or any sensitive information through the internet.

Payment fraud is described through the ways below:

  • Stolen payment instruments such as Credit Card or Debit Card. 

  • Fraudulent online transactions that are unauthorised. 
  • Fake requested through links, messages or emails for a refund request, return of cheques or free cash wins.

With the rampant use of online platforms and e-commerce websites, the influx of electronic transactions has grown tremendously. With an increase in digital payment modes, there is a proportionate surge of online banking fraud.

Types of Frauds:

  • Phishing: Suspicious emails or SMSs using a brand name or logo of known companies that require you to share sensitive information such as Credit Card details, bank account number, login credentials are prone to a phishing scam. SMS with illegitimate links to update know-your-customer details. This type of transaction fraud aids the fraudster to collate and steal all your personal and bank information to carry out online fraud.

    You can read more about phishing here.

  • Identity Theft: though this type of fraud exists externally, that is away from the digital realm, it is a common means of transaction fraud. Identity theft can occur when the fraudster steals your Credit or Debit Card and impersonates you and uses the card to carry out multiple transactions through a Point of Sale POS machine. Additionally, the fraudster can also penetrate firewalls through outdated security systems or by hijacking the login credentials through public Wi-Fi.

  • Pagejacking: another type of occurrence for a payment fraud is when the fraudster reroutes the page traffic to a malicious website which is a replica of the brand. Herein the visitor enters their payment details, and the fraudster receives all of those details. This way, the hacker can infiltrate into a network security system and use the information to carry out unauthorised transactions.

  • ATM Skimming: this method is where the fraudster retrieves your Debit Card or Credit Card numbers together with the PIN No through a skimming device used on ATMs once you complete your transaction. Thus, when you complete a transaction through your ATM, make sure to press the cancel button multiple times before leaving the ATM.

At times these frauds are inevitable; there are numerous ways to protect yourself from them and avoid the unforeseen.

  • Sustain continuous awareness of the latest fraud trends. 

  • Be cautious when withdrawing money through an ATM.

  • Be sure to check the page encryption icon, that is a lock icon in the URL bar when processing and online transaction through your Credit or Debit Card.

  • Encrypt emails that contain confidential personal and financial information

  • Ensure that you regularly change the login and password credentials of your online bank accounts. 

  • Keep your antivirus software active with continuous updates and frequently run security checks. 

  • Minimise your Wi-Fi usage if it is an open and public network. 

With the know-how of what is a transaction fraud and how you can prevent it, the next time you splurge on an online shopping spree or going to your grocery store, be sure to keep in mind these pointers when using your HDFC Bank Credit or Debit Cards.

You can read more about security features of HDFC Bank and how you can stay protected by clicking here.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.