Your credit card has been compromised. What should you do next?

Picture this. You wake up to a series of notifications from your bank and find your credit card has been used without your knowledge.

You double-check your statement, confirm the transactions aren’t yours, and rule out the possibility that a family member used your card.

The charges seem random and the merchants are unfamiliar. Panic sets in as you realise that your card has likely been compromised.

What should you do next?

Block your card immediately

The first step is to stop any further misuse of your card by blocking it. Most banks allow you to do this through their mobile app, website, or customer service helpline.

When Debalina Ghosh, a communications specialist at Amazon in Bengaluru, noticed unauthorised transactions a few weeks ago, she didn't waste a second. “Within five minutes, I had blocked my card and called the dispute team. You can't just call the regular customer care number – you have to reach out to the dispute team directly,” she said. Her promptness helped her recover most of the amount.

Report the fraudulent transactions

After blocking the card, immediately report the fraud to your bank. Provide details of the unauthorised transactions and confirm that the card has been blocked. Many banks have a dedicated helpline or email address for reporting disputes, so make sure to contact the right department.

Aravind Ganesh from Chennai had his credit card stolen while returning home from work in 2020. The thief made a transaction at a nearby petrol pump using ‘tap to pay’, which harnesses near-field communication (NFC) technology to allow a user to make purchases without entering the PIN.

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“I received a message about the unauthorised transaction and was unsure if a family member had used the card,” he recalled. As soon as he realised his card had been compromised, he filed a complaint with HDFC Bank and reported the incident to the local police. His case demonstrates the importance of promptly reporting the fraud so the bank can begin investigating it.

File a police complaint

It’s advisable to file a complaint with the local police or cybercrime unit. This is important for documentation and may be required for your bank to resolve the dispute. The national police helpline number is 112 and the cybercrime helpline number is 1930.

Debjit Saha, co-founder of HomeAbroad in the US, has faced several cases of credit card fraud over the years. The first happened a few years ago, while he was trying to buy something on Flipkart. He received an SMS about a transaction he hadn’t made, for an amount similar to what he was about to spend.

“The process of getting the charges nullified was long and tedious. It took more than three months,” he said. He eventually filed a complaint with the police, although he was initially reluctant to do so because of the hassle. However, he eventually realised that filing a police complaint was crucial for recovering his funds.

Document everything

Keeping a thorough record of every interaction with your bank, police, and cybercrime department is crucial. Note down the names of representatives, dates, and details of conversations or emails exchanged.

Ganesh said, “I carefully documented everything, including emails and phone calls with the bank.” This helped strengthen his complaint with the RBI, ultimately leading to a resolution.

Follow up with the bank

Once you've reported the fraud and provided the required documents, your bank will begin an investigation. However, banks may not always respond promptly, so follow up regularly and escalate the issue if there is a delay.

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Debalina Ghosh found that being in constant touch with her relationship manager helped her stay informed throughout the process. “When I didn’t get a clear answer, I escalated the issue to the customer care team,” she said. Her persistence resulted in one of the transactions being reversed within a day.

File a complaint with the RBI, if necessary

If your bank doesn't respond within a reasonable period or you’re unsatisfied with the resolution, you can escalate the issue to the RBI, which has an online complaints portal for banking-related issues. Doing this helped Ganesh recover his money. “The RBI directed the bank to act, and I received the money within 60 days of the initial incident,” he said.

Always monitor your statements

Once the fraudulent transactions have been reported and addressed, continue to monitor your account for any unusual activity. Checking your credit report regularly to make sure there has been no long-term damage to your credit score.

Debjit Saha diligently monitored his bank statements after returning from abroad and discovered another fraudulent transaction on his credit card. This allowed him to act swiftly and resolve the issue before it was too late. “This time, the process of resolving the fraud was smooth and efficient. The transaction was removed from my next statement within two weeks,” he said.

Set lower credit card limits while travelling

Sougata Basu, founder of CashRich in Mumbai, suggested reducing credit limits when travelling abroad and keeping helpline numbers handy. “I always recommend keeping your credit limits low, especially when travelling abroad, as it helps minimise potential losses in case of fraudulent transactions. Make sure to enable international roaming on your SIM card so you get those transaction alerts right away, and always keep the helpline numbers handy in case you need immediate assistance,” he said.

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He also highlighted the importance of the chargeback process, which is initiated when the bank is informed about an unauthorised transaction and allows a customer to receive temporary credit for the disputed amount while the issue is being resolved.

RBI guidelines you should know

The RBI has implemented strict guidelines to protect customers from unauthorised transactions. Being aware of these can ensure you are better protected and know your rights when facing credit card fraud.

• Zero liability in certain cases: If fraud occurs due to the bank’s fault or negligence, the customer is entitled to zero liability, regardless of when they report it. In cases where neither the bank nor the customer is at fault, zero liability applies if the incident is reported within three working days.
• Limited liability for delayed reporting: If the customer delays reporting the fraud (between four to seven working days), the liability is capped based on the type of account. It could range from ₹5,000 for basic savings account holders to ₹25,000 for other types of accounts. If the fraud is reported after seven days, the liability will depend on the bank’s policies.
• SMS alerts: The RBI mandates that customers register for transaction alerts by SMS to be able to detect fraud quickly. Immediate reporting is crucial to reduce liability and prevent further loss.
• Shadow reversal: Once a customer reports an unauthorised transaction, the bank must credit the disputed amount back to the customer’s account within 10 working days, without waiting for the investigation to be completed. This credited amount must be backdated to the date of the fraudulent transaction to avoid extra charges.
• Transparent customer protection policy: Every bank must have a transparent customer protection policy approved by its board, which clearly defines procedures and timelines for dealing with unauthorised transactions.

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