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By Channa Kasturisinghe

Credit Cardholders in Sri Lanka are perturbed over the safety of their credit cards with the Criminal Investigations Department (CID) this week arresting a gang which engaged in a massive fraud of Visa and Master International credit cards.

According to reports the gang had counterfeited a number of international credit cards of overseas cardholders using a personal computer and manually encoding track information allegedly with the help of some big businessmen. Although, a number of instances of credit card counterfeiting locally is not high, immediate precautionary measures should be taken to curb such acts to safeguard Sri Lanka's credit card market, which is still in the developing stage.

A major constraint as far as using credit cards in Sri Lanka is the lack of legislation to penalise those who engage in credit card frauds, Hatton National Bank's Card Centre Manager, Nalin Wijeratne said.

"A committee comprising risk staff in all banks in the country was formed nine years ago under the guidance of Master Card International. We proposed to the authorities to bring an amendment to the present legislation or introduce new legislation with regard to credit card frauds. However, people should also be properly educated on how credit card frauds can take place and precautionary measures they can take," Wijeratne said.

According to an official of Sampath Bank it is very difficult to prove credit card related crimes in courts due to the loopholes in the law.

"According to the present law counterfeit credit cards come only under fraudulent documents which is quite inadequate to prove these cases. The bank comes to know of this only after the customer receives his monthly statement. Any delay on the part of the customer in informing the bank could also go against him," the official said.

He said customers who hand over their credit cards to waiters in hotels for swiping should be careful of doing so because anything could be done with the credit card if someone is smart enough.

S. Wijekoon, Manager, HSBC, Card Centre said that there was no need at present to worry much about the recently reported incident of counterfeit credit cards. These cards have been counterfeited overseas and brought down here to use them fraudulently. There isn't much evidence of anybody counterfeiting credit cards locally. However, we have to take precautionary measures.

If a credit card which belongs to one of our cardholders is counterfeited the bank will look into the matter and take responsibility. However, the cardholder should also not leave room for anybody to counterfeit his card. If you hand over the card to somebody you do not know that person can do anything with the card.

For example, when the card is given to a certain counter for swiping, it should be done in the presence of the cardholder. Another common way of using credit card fraudulently is the internet.

There are some customers who purchase credit cards with very high credit limits but they rarely use them.

That also creates opportunities for credit cards frauds. People should not purchase credit card with very high credit limits if they do not use them.

"We have requested the Government to speed up amendments to the penal code with regard to credit cards. It is essential to introduce deterrent punishment to those who counterfeit credit cards and engage in other fraudulent acts using credit cards.

A Task Force has been formed by credit card sections of all the banks. The Task Force has requested the Police Department to set up a special unit to crack down on credit card frauds. However, it has not been effective as the police is not fully equipped with the technology and the know-how in credit card related frauds," Wijekoon said.

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