Get alerts for banking frauds

But there is no system to avert frauds in the first place

Credit- and debit-card frauds are a big problem for banks as well as customers. Last month, fraudsters hacked into the Axis Bank salary accounts of some Mumbai police personnel and withdrew money. It was suspected that the money was withdrawn from ATMs abroad. A couple of months before this, a customer of YES Bank had suffered a loss of Rs 1 crore from his bank account in 12 transactions using the real-time gross settlement system (RTGS).

This shows one should always keep a tab on one's bank and credit card accounts.

Banks offer a number of options by way of emails and text messages that alert the cutstomer of any activity in these accounts. Earlier, banks offered this value-added service free of cost. However, many banks have now started charging for it. Private-sector lenders HDFC Bank and ICICI Bank took the lead. Now public-sector lenders such as the State Bank of India (SBI) and Punjab National Bank (PNB) have started charging for SMS alerts. Obviously, this has not gone down well with many bank customers.

"Earlier, SMSes were cheap; hence, banks could bear the cost. Now, the Telecoms Regulatory Authority of India (Trai) has increased SMS charges. Besides, many others such as intersol charges have now been asked to be at par in home and non-home branches of banks. Hence, banks have had to start charging for SMSes," explains K R Kamath, chairman and managing director of PNB. Intersol charges are outstation-cheque-collection charges and fund-transfer charges.

ICICI Bank and HDFC Bank charge Rs 60 a year to savings account holders and Rs 100 a year to current account customers. From July 1, both the SBI and PNB decided to charge Rs 15 per quarter for SMS alert services. PNB, however, will not charge senior citizens, retired people and students.

Look at these charges as a small fee towards protecting your bank or credit card account. It will help you get a alerted in no time against any fraudulent transaction in your account.

Most customers are unhappy that an SMS alert helps only once a fraud has been committed. There is no system to avert frauds in the first place.

"There have been instances where a fraudster comes back to an account or credit card after having duped a customer once. These alerts may not avert the first fraud but they do help you avoid a repeat attack. Because once a fraud is reported, banks flag an account and any transaction after that goes through extra scrutiny," says R S Sangapure, general manager (retail), Central Bank of India. Of course, you need to prove that the fraud did not take place because of your mistake, such as providing your account details to a friend or relative.

A simple fraud, where only one account is involved and the incident easily identifiable, can take up to 15-20 days to be resolved. A complicated fraud, where the money has gone through multiple accounts before landing in the fraudster's pocket, can take up to three months to resolve.

If you are contemplating asking your bank not to send alerts because of the charges, think again. The alerts do help prevent high-tech frauds. If you haven't enrolled for it yet, call up phone banking or register online.