Banks step up efforts to prevent credit card frauds
SOMASROY CHAKRABORTY
Kolkata, 20 February
Credit card issuers in the country are stepping up efforts to prevent
swindlers from gaining access to customers' card details.
The move follows rising instances of phishing and skimming attacks,
through which fraudsters steal card information and make purchases
using those details.
American Express is introducing anew solution, ' ezeClick', for its
customers in India to ensure their card data is not shared with
merchants while making online transactions. Currently, an individual
has to share information such as card number, expiry date and card
verification value during online credit card transactions. "With
ezeClick, our customers can conduct all online transactions with
asingle unique user ID. The new solution eliminates the need to share
card details on e- commerce sites. The scope of fraud is much less
when card data is not shared or stored on merchant servers," Sanjay
Rishi, president at American Express India, told
Business Standard.
He added that by the end of March, most of American Express' partner
merchants would allow the use of ezeClick solution.
"It uses secure socket layer technology to transmit and receive the
card members' personal information, which is then encrypted in such a
way that it is virtually impossible for anyone other than American
Express ezeClick to read it. The solution also makes e- commerce
transactions simple and swift," Rishi said.
Most bankers blame the weak technology platforms of merchant outlets
for incidents of frauds apart from oversights, deviation from existing
controls and collusion between employees and outsiders. A few private
banks are already taking steps to strengthen the systems and processes
at merchant establishments to reduce the scope of skimming frauds.
The biggest worry, however, is the absence of 3- D secure
authentication protocol across many nations in southeast Asia, Europe
and Americas.
The 3- D secure is mandated in India for all online transactions. It
provides an additional layer of security as the customer has to key in
a password apart from card details to complete an online transaction.
Indian banks have often found that fraudulent transactions in their
clients' accounts have taken place on sites that do not have 3- D
secure mechanism. " The situation is serious.
There is an urgent need for all stakeholders to sit together and plug
the points of frauds. We hope that when central banks meet, there will
be a discussion on this and mandating 3- D secure across the globe
will be considered. The scope of frauds will come down drastically
then," said Pallav Mohapatra, chief executive of SBI Cards.
As a preventive measure, some of the Indian banks have started
replacing the cards of their customers, who have recently travelled to
countries that do not have 3- D secure protocol. Lenders are also
substituting the magnetic strip- based cards with chipbased cards as
it is difficult to steal data from the latter.
Move follows rising instances of phishing and skimming attacks
Suspended firms: HC notices to Sebi, bourses
NSUNDARESHA SUBRAMANIAN
New Delhi, 20 February
The Delhi High Court has issued notices to the Securities and Exchange
Board of India ( Sebi), the National Stock Exchange ( NSE) and the BSE
in a case relating to suspended companies. Sebi and two exchanges have
been directed to file responses to the notices.
The court issued a similar notice to the Union government, too.
Responses to the notices have to be received before the next hearing,
scheduled for May. " They have to file their responses well in advance
and we shall file our rejoinders, if any," said one of the
petitioners.
The notices followed a combined hearing of two public interest
litigations ( PILs) seeking aprobe by the Central Bureau of
Investigation into regulatory inaction on suspended companies. The
PILs were filed by Delhi- based Midas Touch Investors Association and
Delhi- based pilot Atul Agarwal last year. As both PILs dealt with the
issue of investor money locked up in companies suspended by stock
exchanges, the court decided to combine these.
While running an investor helpline, Midas Touch had received about
2,000 complaints against 450 companies "suspended" by stock exchanges
for " non- compliance with the listing agreement".
Midas said when these grievances were taken up with stock exchanges,
they had expressed their inability to help redress grievances against
suspended companies and advised the company to take up the matter with
Sebi.
At a meeting on December 7, 2010, Midas founder Virendra Jain had
raised the issue with Sebi and the Investors' Association and
requested assistance. He had said though suspension from the bourses
didn't affect the companies' operations, it had an adverse impact on
its public shareholders, as they couldn't sell shares on the exchange
until the suspension was revoked by the exchange or Sebi. According to
Agarwal's petition, there were " 10 million public shareholders/
investors of these 1,405 suspended companies, whose enormous
investment of more than ₹ 1,79,560 crore in these suspended companies
is at stake".
The petitioner alleged Sebi's inaction and the failure of stock
exchanges to initiate action against defaulting companies had enabled
these listed companies, their promoters and directors to get away with
unfair practices and violation of listing agreement terms without
statutory monetary penalty and penal action. " Small investors are the
biggest losers due to such inaction. Resultantly, their estimated
investment of about ₹ 1 lakh crore has been blocked and is in
suspended animation for years. The number of affected small investors
may be 10 million. They have lost heavily and withdrawn from the
securities market, severely affecting raising of money by companies
for speedier development of the economy," the petition had said.
Sebi agreed to the petitioner's request on December 7, 2010 and
decided the committee that had looked into investor grievances against
suspended companies would look into the issue of " noncompliance with
the listing agreement" and suggest appropriate action. The committee
was told 1,845 companies listed on the BSE and 203 on the NSE hadn't
complied with various clauses of the listing agreement. These included
425 active companies ( 60 were listed on the NSE, while 365 were
listed on the BSE) that were not suspended. The committee recommended
specific action against these companies and their promoters and
directors for non- compliance with the listing agreement. It also
recommended several measures to strengthen the monitoring system.
However, even after about two years, the committee's recommendations
for action against the 2,048 companies and its promoters, directors,
etc, haven't been implemented.
The petitioners alleged the steps recommended to strengthen the
monitoring system had also not been put in place.
THE ROAD SO FAR
|The notices followed a hearing of two PILs seeking a CBI probe into
regulatory inaction on suspended companies |The PILs were filed by
Delhi- based Midas Touch Investors Association and Atul Agarwal last
year |Midas founder Virendra Jain had told Sebi suspension from
bourses had hit these companies' public shareholders |Sebi said the
committee that had looked into investor grievances against suspended
companies would look into the issue |The panel recommended specific
action against these companies, their promoters, etc. It also
recommended steps to strengthen monitoring
--
CS A RENGARAJAN,, B.Com ,FCS, LLB, PGDBM
Company Secretary, Chennai
CONVENOR, CHENNAI WEST STUDY CIRCLE ICSI-SIRC
email csarengarajan@gmail.com
http://www.csarengarajan.blogspot.com
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