Proving debit card fraud can be tricky

But once proven, the bank will reimburse your money

Recently, an account holder in a public-sector bank found transactions had been made using his debit card, though it was with him. He immediately transferred money to another account, but he ended up losing a lot.

He lodged a verbal and online complaint to the bank and got the account blocked. The bank told him the card had been used at a point-of-sales (POS) terminal. On the bank's advice, he lodged a police complaint. The police initially refused to lodge a First Information Report (FIR), saying the bank should do an enquiry first. When the customer insisted, he was told to go to another police station as the crime did not take place in the jurisdiction of that station.

Filing an FIR is essential as you have to file a copy of the complaint to your bank. Without it, the bank will not reimburse your money.

These are hurdles to proving your card has been misused. But once proved, the bank will reimburse your money. Parag Rao, senior executive vice-president, business head, HDFC Bank, says, "If stealing is confirmed by investigations, we will immediately reimburse.''

The case is of skimming, where a POS terminal or a website copies details from the magnetic strip of the card.

Though debit-card transactions now require the password to be keyed at the POS, some machines may not ask for it, says Sonali Panda, head, private banking and wealth management, ING Vysya Bank.

It may be safer to use a credit card for online and POS transactions. The reason: Even if there is fraud, the money does not go out of your account.

But credit cards have higher spending limits.

If your card has been misused, first call your bank's phone banking service and file the case. Then write a letter. Then file a complaint to the nearest police station and give its copy to your bank.

To establish the fraud, the bank will check with the store where the card has been used and see the footage to find who has used the card. If it has been used at an automated teller machine (ATM), the bank will check the footage there. If the transaction slip has not been signed or if there is a mismatch with the cardholder's signature, it could be proof of fraud.

Cardholders must ensure their debit cards are used in their presence. The PIN should never be shared with anyone. At an outlet, key the PIN yourself.

"Treat your debit card the way you would treat cash,'' says Rao.