Thursday, January 31, 2008

Mobile driven remittances starts making a strong foothold in India

In India soon people will be able to use their mobiles for transferring of funds. Mobile driven remittances is making a strong foothold in India. Customers would be able to transfer funds from their mobile phone to friends or relatives, bypassing other remittance routes like net-banking and money orders. Even though, the recipient does not have a bank account or ATM card.

Standard Chartered Bank in the first move of its kind has introduced a cardless cash withdrawal scheme which will enable a StanChart customer to transfer funds from an ATM to any person in the country who has a mobile phone.

In the second phase of its implementation the bank have plans of making this possible through the sender’s mobile itself, and in due course the service will be extended to international fund transfers.

Banks are upgrading their technological platforms to include mobile-based services, in order to make banking conveniently accessible and customer-friendly. Recently ICICI Bank launched a mobile banking platform, which will replicate all internet-banking transactions on the cell phone.

Its not only that the big banks are improving, also the public sector bank Corporation Bank and Pune-based co-operative bank Cosmos Bank have already signed an agreement with mobile-payments provider PayMate to offer customers with SMS-based payments services.

With the introduction of mobile remittance service a StanChart account holder can go to an ATM and opt for the cardless transfer. On giving the mobile number of the recipient, the account holder will get an order number from the ATM. The sender then needs to pass on the order number to the beneficiary, while the bank will send a personal identification number (PIN) to the latter’s phone.

The recipient will be required to go to a StanChart ATM, enter the combination of the PIN and order number and withdraw the cash within 24 hours of receiving the message. As told by StanChart head of consumer transaction banking and strategic initiatives CDK Sai Narain, there will be a limit on such transfers at Rs 10,000 per transaction and Rs 20,000 per day.

The transfer will be instant and the amount will be debited in the sender’s account only when the amount has been withdrawn. In initial stage the system will work only on the StanChart ATM network, but there is a scope of being expanded to the CashNet ATM network, according to Euronet Services India managing director Loney Anthony.

Also, the bank has plans of making this particular process possible entirely through the mobile phone. StanChart has also signed an agreement with PayMate to allow customers to book air and movie tickets directly through their cell phone while also allowing customers to pay through mobile phones at restaurants.

Wednesday, January 30, 2008

Mumbai police arrested online fraudster with smart crimes history

Last week Mumbai airport police arrested online fraudster Usman Bin Abdulla, aged 32. During interrogation he gave some shocking clues about his access to credit cards of Ahmedabad residents.

Later on he was brought to Ahmedabad. He told the police that he worked at a call centre in the Ahmedabad and had procured credit card records of more than 10 people in the city.

This is not the first time Abdulla's has been arrested for doing credit card frauds. Officials told before he was arrested in February last year with five credit cards.

AK Jadeja, deputy commissioner of police, Zone I told, "Abdulla used to work at a call center run by one Manish Kakadiya. Here, he had become adept at extracting personal details from customers. He and his accomplices would go to prospective clients and ask for their electricity bills, birth certificates and credit card photocopies.

During a raid, we seized most of the records, but Abdulla managed to keep back some of the data when he was arrested".

Last year in March he was sent to Sabarmati jail, but has managed to get bail and resume his wicked activities. "We are working on his inter-state links and we hope to solve other credit card fraud cases in which he might be involved," Jadeja said. Satellite police station officials are interrogating him.

"He has co-operated with us so far. We have traced his links in Hyderabad, after which before he moved to Mumbai," said KK Patel, inspector of Satellite police station. Officials told that Abdulla had opened a travelling agency in Mumbai where he used to do business in tickets reservation booked on the internet.

Wednesday, January 23, 2008

Cops, lack of expertise in dealing with e-frauds

Police have failed to get something out of UK citizen, Wilfred Louis, 33, who was arrested by Navrangpura police on January 10. Even after ten days, they have not been able to get anything out of the culprit.

It is not difficult to get information out from Wilfred. A simple reason for the failure of the cops is that they do not seem to have the time or proclivity to solve the case."

The biggest hurdle they are facing is lack of expertise in dealing with e-frauds. Police sources said that the case files have been shelved soon after Uttarayan bandobast. The accused has been sent to Sabarmati Central Jail.

Wilfred, who identifies himselt to be a UK citizen, had purchased gold jewellery from a shop on CG Road and offered a credit card for payment. The card reader, however, detected the fraud and generated an automated message that first tipped off the bank and then the police.

Cops without any delay arrested Wilfred and also got a seven-day remand. But, from Wilfred not much of enquiry was done as the cops were busy attending to routine bandobast.

"But what we know right now is, he is not a UK citizen, as we confirmed it with the embassy at Mumbai. He has an accomplice in the UK who arranged for his passport and perhaps a fake identity. We suspect him to be a Nigerian but are awaiting substantial proof. We cannot communicate with him as we do not know his language and he does not seem to know ours," said R D Rawal, sub-inspector of Navrangpura police, investigating officer of the case.

But what about checking the five email accounts of Wilfred which seem to be written in a simplistic code which seems gibberish at the first glance? However the mail accounts contain crucial data about more than 15 credit card accounts, but cops have no answers.

Now, the crime branch sleuths have come together with the city police to probe this racket as "This is a case of cyber crime and expert investigators are needed."

"The crime branch has the right to interrogate the accused but right now, Navrangpura police is probing the case. If needed, we will seek for more remand of the accused," said A K Jadeja, deputy commissioner of police, Zone I.

Jadeja further added that there is pressure of routine crime and law and order duty which weigh heavy on police and in some cases where technical help is needed, crime branch officials come in for help.

However an official told TOI that the investigation has been done and name of the other members of this gang of frauds have come out who are operating in various locations in India.

"They use financial gateways of international banks on the Internet, popularly known as Visa and MasterCard. When the detail is stolen from other countries, the users of the card may not even know that the detail lies with some other card used in India. They most probably used skimmers to extract the data and then copy it on other cards. The cards and the data were not matching - data was of another card. But it is difficult to check it manually," he said.

The machine recognizes the eight-digit number given by the parent company - Visa and MasterCard. For the card reader, it does not matter to the reader. Police have now sought help of other Afro-British people on visit to India.

"From the numbers, we have got from Louis' mobile, we called up his three accomplice but they simply talk gibberish even when approached in English. They know perfectly what we speak but they do not want to answer," said an official.

Monday, January 21, 2008

Nine cases of credit fraud registered in 2007

Online credit fraud cases are increasing in India. In the last six months there have been 12 cases of credit card fraud in western parts of the city.

City police has been saddled with a case in Shahibaug. A young trader's credit card was used for online shopping and Madhavpura police are now tying up with cyber crime experts to solve the case.

On Saturday Nirav Modi, a resident of Spectrum Towers, Shahibaug, filed a complaint with Madhavpura police for misuse of his credit card on internet for shopping of household items worth Rs 46,721.

Modi came to know about the transaction when he received a bill for the transaction after getting a call from the credit card company. When he saw the transaction details, it was for shopping of grocery, washing machine, furniture and small household goods purchased online using his card number and CVV number.

"The card was used over the period of six days from January 11 to 16. Modi got a call from the company to inform him of the transactions and he got a bill for the same on January 18. He was shocked as he did not purchase anything online. Clever fraudsters also did not exceed the limit of Rs 10,000 in a day and made small purchases. We are yet to get details of the transaction and locate the computer used for the fraudulent purpose," said H L Odedara of Madhavpura police.

According to the police records, misuse of credit card is on constant rise. In 2007 as many as nine cases were registered with the city police.

Except one, police did not get any clue in any case about the use of the card and whereabouts of the culprits. While in most of the cases, fraudsters have used the safest option of booking airline tickets with a particular airline online. But in this particular case, they have endeavor into shopping malls offering online service of purchase and delivery at your doorstep.

Friday, January 18, 2008

Use mobile phones to pay bills

Mumbai company is set to roll out a technology which will enable the clients to pay there bills through mobile phones.

Just swipe your mobile phone to purchase things, much like a credit card.

The company has already tied up with Axis Bank for the service and is in the advanced stages of beta testing. The service will be launched at commercial level within three months.

The company behind this novelty is Atom Technologies, a subsidiary of the BSE-listed Financial Technologies (India) Ltd (FTIL), which runs the Multi Commodity Exchange of India.

According to FTIL director (Technology), Dewang Neralla, Atom Technologies’ product — Atom Card — and software can burn the user’s credit card data to a mobile phone, that too over-the-air (like making a call or sending an SMS).

The data will be stored in a 2-D bar code format and even the user will not be able to read the data assuring security in case the handset is lost or stolen. Moreover for making a purchase an authentication — providing the PIN — has to be made.

After the credit card data is loaded on the mobile phone, (irrespective of the operator, but in collaboration with the card-issuing bank) the handset can be used no need of credit cards.

The swiping model, which is termed as optical payment by the company can be done at any merchant establishment that is having the requisite software. The company will upload a 2-D barcode on the phone that can be read by a simple webcam with the necessary software.

Neralla said that Rs 200-webcam is all that is required for reading the 2-D barcode. The company has also received a copyright for this payment mode in the US.

By using the second method i.e. remote location, or over-the-air authentication, the user can use the cards sitting at home or office. In this method, the merchant establishment and the bank are connected over the air and the user will have to approve the purchase. Hitherto, the user will have to authenticate the deal.

The mobile phones having Java platform (a high-end graphic suite), will be able to use this technology and at present, the lowest Java handset available in the market is priced at around Rs 3,000, said Niranjan Gosavi, chief marketing officer, Atom.

He said, Atom will be giving the software free-of-cost to banks, and merchant establishments and customers, will have to levy a percentage of the transactions as its fee.

The company, which is already carrying out a pilot study with 500 customers of Axis Bank, is in the advanced stages of tying with other banks in the country. Atom is also working out on the plan to provide the solution to overseas market and is in talks with international banking majors, he added.

Companies like Bharti Airtel, Reliance Communications and C-Sam (a firm founded by Sam Pitroda) are also looking at offering mobile commerce solutions.

Earlier C-Sam had launched mobile wallet in Japan and Scandinavian countries, while Airtel and RCom are giving certain wallet services like money transfer, mobile remittance, cheque clearance, ticket booking, among others, over mobile.

Value-added service (VAS) providers like IMImobile and Roamware are into the developing of these kinds of applications.

The companies are waiting for the approval from the Reserve Bank of India (RBI) for mobile wallet services.

Tuesday, January 15, 2008

IDBI Bank and MasterCard Worldwide launched international debit card

IDBI Bank in a joint venture with MasterCard Worldwide launched ‘IDBI Bank International Debit MasterCard’ on Monday.

The card will be available both as a standard as well as a gold card. The IDBI Bank International Master Card have all the features of standard ATM card, including access to bank accounts and banking transactions The standard card have a usage limit of Rs. 25,000 per day via ATM and POS terminals whereas for the gold debit card the limit is of Rs. 75,000.

Addressing a press conference at the launch of the card the Chairman and Managing Director, IDBI Yogesh Agarwal said, “The launch of this card is part of our endeavor to expand our bouquet of products and service offerings. Over the next few months we plan to unveil more such innovative product offerings for our customers,”

The card will be accepted at more than 25 million acceptance locations around the world, as well as, more than one million ATM locations world wide.

Saturday, January 12, 2008

RBI reports top 100 centers in the country dominate in terms of credit and deposit

In spite of the articulation of financial inclusion, only the top 100 centers in the country dominate in terms of credit and deposit.

According to the ‘Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks – September 2007’ released by the RBI, the share of these centers has gone up both year-on-year and eventually from March 2007.

There has been increase in the share of the top 100 centers in credit, from 75.9 per cent in September 2005, to 76.7 per cent in September 2006 and to 77.2 in September 2007.

According to RBI figures available same is the case in deposits, the share of the top 100 centers has gone up from 66.2 per cent-September 2005, 67.9 per cent-September 2006 and 69.6 per cent-September 2007.

According to RBI report the nationalized banks, as a group, accounted for 47.9 per cent of the total deposits, whereas State Bank of India and its Associates accounted for 22.6 per cent.

While the share of other scheduled commercial banks, foreign banks and Regional Rural Banks in aggregate deposits accounted for 20.3 per cent, 6.1 per cent and 3.0 per cent, respectively.

In respect of gross bank credit, nationalized banks share was the highest at 47.0 per cent, followed by State Bank of India and its Associates at 22.9 per cent and other scheduled commercial banks at 20.6 per cent.

Foreign banks and RRB have comparatively lower share in the total bank credit at 6.8 per cent and 2.6 per cent.

At the all India level, on last Friday of September 2007 the credit-deposit (C-D) ratio of all scheduled commercial banks stood at 71.5 per cent. Whereas amongst the States/Union Territories, the highest C-D ratio was observed in Tamil Nadu (109.8 per cent) followed by Chandigarh (100.2 per cent). While at the bank group level, foreign banks had the highest C-D ratio at 79.9, which was higher than the all-India ratio.

Thursday, January 10, 2008

Visa named “World’s Leading Credit Card” for the 10th consecutive year

Visa for the 10th consecutive year named the “World’s Leading Credit Card.” The World Travel Awards, the prestigious awards ceremony acknowledged Visa for its significant achievements in all areas of the travel and tourism industry.

The criteria used for evaluating companies and organizations included scope of distribution, convenience and overall best services. On these criteria online polling of travel agencies and front-line travel agent is conducted and the best chosen company is awarded the prize.

“Visa is delighted to receive this most prestigious award,” said Doug Hambry, senior vice president of U.S. sales, Visa Inc. “Visa has been a partner to the travel industry and continues to aid in its growth, providing merchants access to millions of Visa cardholders and providing cardholders with unsurpassed acceptance worldwide. Additionally, Visa cardholders receive added value that goes beyond the convenience and confidence that Visa provides, through travel and entertainment programs linked to Visa payment cards. We are honored once more to receive this accolade from one of the industry’s most important awards programs.”

Throughout the year at online voting took place. More than 167,000 travel agents and professionals in over 160 countries worldwide casted their votes to let the world know who they think are the best in the travel industry. The winner was selected from the following payment cards – American Express, Diner's Club, JCB, MasterCard and Visa.

"For the past ten years Visa has won 'World's Leading Credit Card,' yet the competition and the marketplace have gotten bigger and tougher over this time," said Graham Cooke, president and founder of the World Travel Awards. "To consistently win year after year shows that Visa is able to stay ahead of the competition and consistently deliver a product that exceeds the expectations both of customers and those in the global travel trade."

The World Travel Awards was established in 1993. It held its 14th annual World Travel Awards Ceremony on 12 December 2007, at Beaches Turks & Caicos Resort and Spa, Providential in the Caribbean. The World Travel Awards honors leading travel-related organizations in worldwide and regional categories, ranging from airlines, hotels, beaches and cruise lines to credit cards, car rental companies and hotel reservation services.

Visa Inc. is having a strategic partnership with many leading global corporations and merchants, creating retail and travel and entertainment promotions that deliver extraordinary values to Visa cardholders worldwide. Visa's extensive merchant relationships and marketing partnerships, as well as its unmatched acceptance around the world, have promoted Visa growth in the retail and T&E arenas.

Visa have an innovative and interactive online travel portal, Visa Destinations, which gives Visa cardholders with retail and T&E offers from hundreds of merchants in key destination markets or by designated category around the world.

Wednesday, January 9, 2008

LTTE men suspected in Bangalore credit card fraud

On Saturday police have arrested suspected LTTE men in Mangalore. It seems the police have hit upon an interesting link after the Saturday arrest. It is the same person who used to supply fake credit cards to the suspected criminals and the one involved in the credit card racket unearthed in Bangalore last year.

Kumar alias Chennai Kumar used to supply these cards to the suspected LTTE men - Bala Reuben and Nalla Tambi Jayasheelan. Bangalore police suspects that he might have distributed fake credit cards to his men here too. In June 2007 Chandra Layout police had cracked a huge credit card fraud. Three men were arrested for swiping cards belonging to unknown persons from abroad. Interestingly, three arrested - Srigandhpal, Sai Prakash and Nagaraj - had revealed only one name - Kumar.

It seems there are other connections too. In the Chandra Layout case, many international banks credit cards were used. The two Lankans also possess seven cards of such MNC banks.

"Four of the 11 credit cards seized from the duo are issued by ICICI Bank and Indian Bank. However, all the other cards are of different international banks. The accused know nothing about the bank. All they know is that someone called Kumar supplied them. We are still trying to contact those banks," a police officer said.

There was a lack of information about Kumar so investigation into the Chandra Layout case could not be carried out further. Srigandhpal and Kumar had met several times in Bangalore. "Kumar and his close associate Muruga came often to Bangalore. During those visits, Kumar distributed credit cards to them. He would get in touch with his associates to collect his share once the credit cards were swiped and the booty made. He would give them a share in the profit and disappear with the rest of the money. There is no trace of Kumar and his whereabouts are not known," a senior police officer said. The investigation done from the arrested Lankans in Mangalore, Kumar is a major LTTE operative and a citizen of Australia. It is alleged that he might have brought in many LTTE operatives from Jaffna and surrounding areas to Bangalore.

Bala Reuben from Vavuniya and Jayasheelan from Jaffna have been remanded to police custody. A team of officials from Bangalore is also questioning them.

Monday, January 7, 2008

Kanpur police busted a racket, arrested five for Rs 4-crore credit card fraud

A racket was busted; five gang members were arrested by a team of the Kotwali police and the Special Operations Group (SOG), for duping credit card users of over Rs 4 crore.

From their possession the police recovered 15 credit cards and over a dozen passbooks, chequebooks, ration cards and identity proofs.

Moving on a tip-off, on Thursday night the team arrested Ajai Singh, Vijay Pandey, Hanuman Mishra, Akhilesh Tiwari and Mohammed Hussain from near a well-known private bank under the Kotwali police circle.

Kotwali in-charge T B Singh told the media person the mastermind of the racket, Aman Singh, owner of Singh Electronic in Kakadev area, is still absconding.

Explaining about their technique used, Singh said the gang members would first collect from a bank a list of credit card holders who have defaulted on payment and then visit them posing as bank staff. “They would request the card users to pay the pending amount through cheque and then take away the credit cards on the pretext of getting them reactivated,” he added. As soon as the defaulters would deposit the pending amount, the gang made transactions using the credit cards.

SP Atul Saxena said during interrogation, the arrested members of the racket revealed a concatenation with officials of a private bank. He said the police were investigating the matter while other members would be arrested soon.

Friday, January 4, 2008

Deterioration of finances is the by-product of the sub prime mortgage crises leads to rise in unpaid credit card bills

On analyzing of financial data from the country’s largest card issuers it was found that Americans are falling back on their credit card payments. The situation has reached at an alarming rate that the failure and defaults are increasing by double-digit percentages in the last year and sending remainder of warnings of worse to come.

Experts are of view that the warnings of the deterioration of finances of many households are to a certain extent are the by -product of the sub prime mortgage crisis and could bring more trouble ahead for an already sputtering US economy. “Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card or vice versa,” said Cliff Tan, a visiting scholar at Stanford University and an expert on credit risk. “We’re starting to see leaks now.”

A study conducted by 17 large credit card trusts showed that the value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier. The figures show more than 4 per cent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks such as Bank of America and Capital One and for retailers like Home Depot and Wal-Mart.

According to filings made by the trusts with the US Securities and Exchange Commission (SEC) showed in October defaults — basically when lenders give up hope of ever being repaid and write off the debt — rose by 18 per cent to almost $961 million. The reports from America’s biggest lenders, including Advanta, GE Money Bank and HSBC, reveal serious delinquencies have risen sharply. It reported increases of 50 per cent or more in the value of accounts that were at least 90 days delinquent when compared with the same period a year ago.

After analyzing the data it has come out that around 325 million individual accounts held in trusts that were created by credit card issuers in order to sell the debt to investors — similar to how many banks packaged and sold sub prime mortgage loans. All together, total for about 45 per cent of the $920 billion the US Federal Reserve counts as credit card debt owed by Americans.

Till recently, US credit card default rates had been going down close to record lows, providing one of the few profit growth areas for US banks, which continue to flood Americans’ mailboxes with billions of letters monthly offering easy sign-ups for new plastic. Even after the recent step-up in bad loans, the credit card business is still quite rewarding, because of the interest rates that can run as high as 36 per cent, plus late fees and other penalties.

However, from the detailed monthly SEC filings from the trusts one gets a sharp and clear picture of the worrying state of Americans’ ability to manage growing and expensive credit card debt.

According to many economists the delinquencies and defaults can further increase after the holiday shopping season. Mark Zandi, chief economist and co-founder of Moody’s Inc, quoted increasing mortgage problems that began after this summer’s sub prime financial shock as one of the cause, as well as a weakening of job market in the Midwest, South and parts of the West, where real-estate markets have been particularly hard hit.

“Credit card quality will continue to erode throughout next year,” he said. Economists also cite America’s long-standing attitude that debt — even high-interest credit card debt — is no big deal.

Wednesday, January 2, 2008

Credit card issuing banks withdrawing insurance covers

The credit card holder’s be careful while banking on the insurance cover that came free with your credit card. It’s time to evaluate and get things clear from your bank whether insurance cover is continuing on your credit card or not. Most credit cards offered by banks no longer have a free insurance (life or non-life) cover and many customers might not have read the fine print to realize that they no longer have insurance protection.

Recently a case came into picture where R Rao, a media professional, received his monthly credit card statement from HDFC Bank. Besides from the details of the transactions made in the year, Rao was surprised to see a notification sent along by the bank said that effective January 1, 2008 the complimentary insurance covers on his Platinum Plus card will be withdrawn.

Until now, Rao has been depending on a Rs 1 crore cover due to air accident, Rs 5 lakh in case of a rail or road accident and Rs 50,000 for hospitalizations due to accidents. From now the only facility he will get on his card is a nil loss/stolen card liability cover which he gets after he reports the loss or theft. Rao will now have to assess his insurance needs and make sure he’s adequately protected. HDFC Bank like other banks (private and public) started withdrawing the insurance cover benefits sometime in 2006.

Says Parag Rao, head — cards portfolio and product management, HDFC Bank, "Customers were not viewing this as a value addition. We found that the hassle of filing and settling claims was creating a dissonance among customers. Also customers perceive other benefits like cash-back facilities as better value propositions than an insurance cover because a bulk of customers may not be aware of the facility or may never make a claim."

Another big reason for banks like HDFC, ICICI, Standard Chartered and even Citibank for withdrawing this facility is that at some point in 2006 credit cards started being offered free for life — without any annual charges. A Citibank spokesperson said that most banks withdrew the free offers due to the issue of costs.

As the insurance cover offered would be a group cover, it would be at a subsidized rate and would come with various inclusions and exclusions. The bank would have worked out the annual charges including some amount of the premium. On annual charges being removed the cost of the premium would have to borne by the bank. HDFC Bank’s Rao adds that the bank does look at the option of allowing the customer to pay the premium on their own. However in most of the cases the covers are insufficient to an individual’s needs or the inclusions and exclusions are so unsuited that continuing the cover does not make sense.

Last year ICICI Bank too withdrew the insurance covers on its classic or basic cards. It continues to offer insurance covers on some of its extremely exclusive cards. For instance, on their Signature Card, which has an annual fee of Rs 25,000, the card holder gets a personal accident cover in case of air accidents worth Rs 3 crore. But this card is not free.

Adds Sharad Mehrotra, of StanChart, "The complimentary insurance cover on non premium cards was discontinued from September 2004. We launched new card products that provide value to customers through other offerings like our Super value Titanium card which offers cash back facilities, but does not offer an insurance cover."