CENTRAL BANK OF SRI LANKA Communications Department 30, Janadhipathi Mawatha, Colombo 1. Tel : 2477424, 2477639,2477420 Fax : 2346257, 2477739 E-mail:firstname.lastname@example.org; email@example.com PRESS RELEASE Date: 24-04-2007 Issued By: Bank Supervision Department Use of Electronic Payment Cards In UK, a credit card scam run by an organized group of criminals has been reported, stealing nearly 30 million Sterling Pounds from accounts of cardholders through various devices. This scam which has been said to be running for several years has involved in cloning credit or debit card information and stealing the personal identification number (PIN) during transactions and then extracting small amounts of money from the cardholders’ bank accounts over a period of time without the knowledge of cardholders. Various scams on payment cards have been reported from many other countries too. Therefore, the Central Bank wishes to provide following information with a view to making aware of the public of basic operational features of electronic payment cards to enable them to be more cautious in using these cards and to mitigate potential risks involved in using these cards. What are the electronic payment cards? The electronic payment cards have become a convenient mode of payments and banking transactions reducing the need for currency notes and coins. There are mainly three types of electronic payment cards. Credit Cards – Credit cards provide the facility to purchase goods and services on credit up to a limit given by the card issuer and the cardholder can pay within the period as per the card issuer’s terms. Credit cards can also be used at Automated Teller Machines (ATMs) of banks for certain banking transactions such as withdrawal of deposits and transfer of funds between the accounts of the cardholder. Debit cards – Debit cards can be used to purchase goods and services through payments made directly from the cardholders’ bank accounts to merchants’ accounts. Debit cards also provide the access to certain banking transactions at ATMs. Prepaid Cards – These cards are issued for a specific value of money paid in advance to the card issuer. The cards can be used to purchase goods and services up to the pre-paid value. The cardholders can refill the value in cards by paying money to the card issuer. What are the potential risks in using electronic payment cards? Although the electronic payment cards are very convenient and innovative instruments for transactions, there are risks involved in using these cards due to skimming and duplicating (cloning) of cards. With the technological innovations, fraudsters, thieves and organized criminal gangs have invented new methods to skim and clone the cards and use these cards without the knowledge of cardholders. Such frauds create various risks inclusive of financial losses to both cardholders and card issuers. Skimming is a technique by which thieves capture your personal or account information from the card. An electronic device used to capture this information is called a “skimmer”, which can copy all the information contained in the magnetic strip on the card. Since skimming devices are so small and easy to hide, it is not difficult for fraudsters to skim the card without the knowledge of the cardholder. The following are the two examples for skimming. At Restaurants - Many fraudsters have been known to employ some restaurant-serving staff to capture your credit card information. You may be surprised to know that a server may carry a skimming device in their apron, belt or somewhere close-by. Your card may be scanned twice, one for your genuine payment transaction and another in the skimming device to capture your credit card information for fraudulent use of the card. Skimming may be performed by sales personnel too at the time you make a purchase. At ATM s - A "card trapping" device inserted by fraudsters into an ATM card slot is used to scan the card and to store/copy the card’s confidential information or even to trap the card in the ATM. How you can protect yourself against risks of skimming and avoid losses? 1. Closely monitor anyone who handles your card - Closely watch anyone to whom you give your card to process a payment, such as a waiter and sales personnel. If, at all possible, do not let them use your card out of your sight. 2. Keep credit cards with a low credit limit - Keeping a low credit limit in your credit cards restricts the amount of money that thieves can steal. 3. Sign all credit or debit cards immediately upon receiving. 4. Cancel credit or debit cards that you do not use. 5. Confidentiality of your PIN - Never write the PIN of your card anywhere. Memorise the PIN. 6. Be aware of your surroundings - Do not allow anyone to see your secret PIN while entering it in the ATM or other transactions machines. 7. SMS (Short Message Service) alert – Arrange with the card issuer to confirm transactions by sending a SMS to you. 8. Collect your receipts - Do not leave receipts at ATMs, teller windows, gasoline pumps, or with the sales personnel. 9. Loss of card – In the event of a loss, take immediate steps to inform the card issuer. 10. Usage of cards outside Sri Lanka – Take care in using the cards abroad, especially countries where the skimming in large scale has been reported. 11. Internet usage – Do not use the cards to make payments through unknown web sites or unknown e-mail requests. 12. Check transactions details and account balances frequently.