Hacked!

I think I've become an easy target for credit card fraud.

About a month back, my credit card was hacked and used to buy software and computer peripherals, apparently somewhere in the USA. This was done online, so there was nobody physically present while using my card. The bank, informed that I hadnt made those purchases, cancelled the credit card and issued me another. I was told that I wasnt liable for the theft - and a good thing, too! - and that the stolen money would be credited back to me. The refund would show up on my next statement from the bank. So that seemed all right.

Only, it wasnt.

I got my newly issued credit card within about 10 days and validated it as normal. I used it only once in the next couple of weeks, to buy a book on Amazon UK. Imagine my shock when I checked my credit card account online after 3-4 days, and found that somebody had been merrily using it to buy telecom items from a merchant in Istanbul, Turkey! What's more, it turned out that my new card had been hacked practically the day it had been issued - well before I got around to using it myself.

Again informed of the hacking, the bank said that the Turkish merchant hadnt been suspicious because the hacker's expenditure had been just below the store's maximum (beyond that amount, the store would, apparently, have checked the authenticity of the card before accepting it). And the bank could do nothing about tracking down the hacker, even though this time the purchases had been made with the "cardholder" present.

It's a good thing that the authentic cardholders arent held liable for falling prey to online hacking, and also that the banks reimburse the money lost in fraudulent transactions. Of course, if cardholders WERE held liable, credit cards would very quickly become useless. Who would bother with using credit cards if it meant that they could lose money to thieves? It's in the banks' interest to keep the customer happy and take on the responsibility for the fraud. (That way, they can keep making money from the interest on card purchases while still making customers feel that credit cards are an asset!)

So, dont make the mistake of feeling grateful to the banks or thinking that the banks are doing customers a favour. Banks dont take the loss themselves. They are doing nobody any favours. They make sure to get back the money from the shops or retailers who accepted the hacked cards as authentic in the first place.

In the end, it's really the high street retailers and shopowners who must bear the costs of credit card fraud... but then they should be more careful about what they accept. If their greed for higher sales figures overcomes caution and subverts security precautions, it would serve them right to be defrauded. The time and methods required to check the authenticity of cards might be a pain for customers and shopowners alike, but it would make fraud that much more difficult.
Debit cards would seem a better option, but they have a downside too. If you use your debit card online and it gets hacked, the money will not be refunded by the bank! Debit cards do not have the fraud protection (of sorts) that a credit card does, so any money stolen by unauthorised usage will remain stolen. Debit card holders need to be very careful when they use it online!

Anyway, once again the bank and I have been through the entire cancel-reissue-submit-revalidate process, and now I'm the rather nervous owner of a new credit card, third re-issue! Hopefully, when I get my next statement, it will only show my own use and not dozens of unfamiliar purchases made in Latvia or Peru. Maybe I'll be third time lucky - if I'm lucky!