Have you ever lost your credit/debit card? If you have, how did you react? Did you panic? What is the first thing you did? However, do you really need to worry? Don’t credit cards have inbuilt security features?
For instance, when you swipe your credit card, you must enter your credit card PIN. And unless you have shared your card PIN with others, no one can swipe your credit card without your knowledge.
Or when you purchase an item on a domestic website, you must enter CVV and validity along with the One-time password (OTP) received on your email or mobile.
Now, CVV and card validity are printed on your credit card. Hence, unless you have redacted those details on the credit card, anyone with physical access to your credit card can see it. But only you get the OTP on email or mobile. So, unless you have lost your mobile phone too along with your credit card, your money is safe.
Hence, the real safety in case of a card loss comes through card PIN (for physical transactions) and OTP (for online transactions).
However, there are 2 types of transactions where card PIN and OTP are not required.
- Tap-and-pay transactions (RBI has capped the per-transaction limit of Rs 5,000)
- Transactions on foreign websites (No regulatory cap)
For tap-and-pay transactions, there is no need to enter card PIN. You just have to tap your card on the card machine to make the payment. Thus, anyone in possession of your credit card with enabled tap-and-pay transactions can use your card for payments. While the regulatory cap of Rs 5,000 per transaction offers relief, the fraudster can make multiple transactions to loot your money.
Your lost credit card won’t always fall into the hands of bad people. If a nice and honest person gets your credit card, you won’t have to worry. But you don’t know that and hence you must plan for the worst. And in that case, you are racing against time. You must block the card before it is misused.
How Do You Block Your Lost Credit Card?
You can call the bank’s customer care number to inform the bank about the loss/theft of the card and block/cancel the card.
You can (and must) send an email to have a proper time-stamped record of communication with the bank.
I prefer installing mobile banking apps. If you have the banking app on your mobile, you can quickly log in and block the credit card. Guess this is the fastest way to block a credit card.
Note that your liability in case of a credit card fraud gets frozen once you report the loss/theft of card to the bank. i.e., you are not liable to pay for any fraudulent transaction done after you have reported the loss of card to the bank.
Installing banking application on your mobile phone has multiple benefits. Not only is it easier and quicker to block your card in case of loss, but you can also set per-transaction limits (ATM, UPI, physical, tap-and-pay), daily transaction limits, and adjust credit limits. The miscreant does not know what transaction limits you have set. Or about your credit limit. He/she does not know whether you have enabled or disabled international transactions.
And this may help you buy additional time.
You get SMS/email for every successful and failed transaction. If the fraudster tries to use your credit card for a transaction and overshoots the transaction limit, you will get a SMS or email for the failed transaction. And you can quickly report the loss of card or fraudulent transaction to the bank.
Even if the fraudulent transaction is successful, quick reporting limits further damage. Moreover, the bank may be able to block such payments since the credit card settlements are not instant.
How Do You Find Your Credit Card Is Lost?
If you lose your wallet with credit cards, you quickly know that you have lost your cards. Quite objective.
However, there may be instances when you do not realize instantly that you have lost your credit card. For example, you forget your card on the payment counter. Or you drop your credit card while taking out cash or identity proof from your purse or wallet. If you are as unorganized as I am, you already know that this is a serious possibility.
In such cases, it may take hours or days to find that your credit card is missing. And unless you know, you won’t take remedial action.
That’s why it is extremely important that you have your mobile number and email address updated in your bank account details. And that you check your SMSes and emails regularly.
For every successful/failed transaction on your credit card done by the charlatan, your bank will send you a message. Such a message would indicate that something is not right.
By setting transaction limits for different types of transactions, you increase the odds that the fraudulent transaction is rejected by the bank. As mentioned earlier, your liability in case of a fraud will also depend on how soon you report the fraudulent transaction to the bank.
Additional Precautionary Measures
- If you do not travel abroad much or usually don’t use your credit card on foreign websites, disable foreign currency/international transactions on your credit card.
- You can enable/disable different kinds of transactions (ATM/Online/Merchant (physical)/Tap-and-Pay) on your credit card. And you can have a different setting for domestic and international transactions. For instance, you can enable domestic-online transactions but disable international-online transactions.
- You can set per-transaction limits for different kinds of transactions (both domestic and online). For instance, if you must enable international-online since you have purchased a subscription, you can keep the per-transaction for international-online transaction just enough to honour the monthly payment. For instance, if the monthly payment is Rs 450, you can set the per-transaction limit at Rs 500.
- You can lose your credit card. And you can lose your mobile phone. However, I really dread a situation where I lose both my credit cards and mobile phone to the same person. Why? Because the OTPs will come on phone. And with access to OTPs, all bets are off. While such a possibility cannot be eliminated, you can limit the damage (or buy more time) by keeping a keypad/biometric lock on your mobile phone.
Additional Work for You
Once you have blocked the lost credit card, you need to call the bank’s customer card to request a new credit card. You may have scheduled auto-debits on your credit cards. You will have to set those up again on your new credit card.