Axis Bank credit card users were recently affected by unauthorized international transactions despite deactivating international usage. Cardholders reported unauthorised transactions and receiving OTPs for transactions they didn’t make, including international charges on their Axis Bank credit cards. Many took to social media platforms to report the issue. So, what should you do if an unauthorized transaction occurs on your credit card?
Adhil Shetty, CEO of BankBazaar.com, explains the step-by-step procedure for dealing with fraud transactions, both domestic and international:
If an unauthorised transaction has been made using your credit card, take the following steps immediately to protect your card and bank account. Note that the procedure may vary slightly from bank to bank:
Step 1: Call your bank’s credit card helpline and block your card.
Step 2: Depending on the location of the fraud, submit the following documents:
For Domestic Transactions
Cardholder Dispute Form (CDF) with transaction details and your signature.
Incident Letter with the date and your signature, addressed to your bank, containing details such as account number, card number, date of loss, circumstances of the fraud, and any additional information.
Original FIR/Online FIR/Incident Letter with the police acceptance stamp if the fraudulent transaction is Rs.20,000 or above.
For International Transactions
In addition to a filled-in Cardholder Dispute Form and Incident Letter, submit the following:
FIR from the overseas local police if the fraud involves an international transaction and you are in the location of the fraud.
Complete visible passport copy including blank pages for fraudulent international transactions where geographical location is unclear.
Importantly, once your card is blocked, it cannot be used again. The bank will issue you a new replacement card with a different number, while your blocked card’s account will remain active.
Shetty further explains that to address the recent surge in fraudulent transactions, the Reserve Bank of India (RBI) has established a robust system to protect online transactions and provide recourse to affected customers. The level of protection depends on when the transaction is reported. The rules set by the RBI in 2017 are as follows:
Zero Liability is applicable in the following cases:
Contributory fraud/ negligence/ deficiency on the bank’s part regardless of the transaction being reported by the customer.
Third party breach where deficiency does not lie with the bank or customer, but the system, and the customer notifies the bank within three working days of the first fraudulent transaction.
Limited Liability:
If loss is due to customer’s negligence, such a sharing of payment credentials, the customer shall bear the entire loss until they report it to the bank. Any loss that occurs after the transactions has been reported to the bank, will be borne by the bank.
Third party breach where deficiency does not lie with the bank or customer, but in the system, and the customer has delayed reporting the incident to the bank by 4-7 working days. The customer’s liability will be as follows:
Source: https://www.rbi.org.in/commonman/English/Scripts/Notification.aspx?Id=2336#T1
Timeline for reversal of zero liability
• As per RBI’s guidelines, after the customer informs the bank of the fraud, the bank has approximately 10 days to credit the amount to the customer’s account.
• When deciding a customer’s liability in light of a fraudulent transaction, the bank must address the complainant within 90 days of receipt of the incident and compensate the latter based on the table above.
• In case of credit cards, the customer shall not bear additional interest.
Most banks offer a certain level if in-built protections against fraudulent transactions on their credit cards. This usually comes in the form of zero liability that is applicable when customers report the fraudulent transaction to the bank within 0-3 days of the incident. “However, the concerning frequency of credit card fraud has given rise a credit card protection plans that are now offered by various leading banks and financial institutions like ICICI Bank, Kotak Mahindra Bank, Standard Chartered Bank, Yes Bank, State Bank of India, Bajaj Finserv, and more. These plans typically kick in cases of card loss, theft, fraudulent transactions or emergencies, and come with a dedicated 24-hour helpline to report loss of card,” said Shetty.