Does credit cards have any fraud insurance? Does it work on loans from the credit card?

[src223]

This is a story of a fraud, details are a bit murky at this point. I don't know if this is the right place to post it, but I don't know anywhere else to post.

So a friend of mine was offered an Axis Bank credit card. He received it but didn't activate it. Few days later, an "executive" from the bank calls up, and offers to activate the card on his behalf. He provides all the correct information like credit card number, bank branch etc, basically to prove that he is indeed from Axis Bank.

Then he asks for an OTP.

My friend being convinced that he was speaking to a real executive, provided the OTP on call.

What follows afterwards is pretty predictable, one would think a major use of the card, but no. They open a massive loan account. And within minutes empty the loan.

My friend was talking to the bank's manager while the carnage was going on. The bank's manager apparently said that he was closing the account, but he didn't, so now my friend has a massive loan.

He went to the bank branch. They accepted that the details were "leaked" by someone from the bank itself. But they have made it absolutely clear that my friend will have to pay the loan as it's on his name.

What is the best course of action now? I thought credit cards by default have some fraud insurance. But I am not sure. Any help is appreciated.

 

[Wealth is my birth right!]

This is a story of a fraud, details are a bit murky at this point. I don't know if this is the right place to post it, but I don't know anywhere else to post.

So a friend of mine was offered an Axis Bank credit card. He received it but didn't activate it. Few days later, an "executive" from the bank calls up, and offers to activate the card on his behalf. He provides all the correct information like credit card number, bank branch etc, basically to prove that he is indeed from Axis Bank.

Then he asks for an OTP.

My friend being convinced that he was speaking to a real executive, provided the OTP on call.

What follows afterwards is pretty predictable, one would think a major use of the card, but no. They open a massive loan account. And within minutes empty the loan.

My friend was talking to the bank's manager while the carnage was going on. The bank's manager apparently said that he was closing the account, but he didn't, so now my friend has a massive loan.

He went to the bank branch. They accepted that the details were "leaked" by someone from the bank itself. But they have made it absolutely clear that my friend will have to pay the loan as it's on his name.

What is the best course of action now? I thought credit cards by default have some fraud insurance. But I am not sure. Any help is appreciated.

If it’s Amex card then what u say is fine
Rest other cards

 

[panchabhut]

first thing to do is to file an FIR

 

[src223]

If it’s Amex card then what u say is fine
Rest other cards

Axis card...

 

[src223]

Okay, its time for some update on this story.

So after running to police, cyber-cell, bank etc. my friend has got back approximately 4.5 lakh out of his 10 lakh scam.

The transaction history showed 2 transactions. They were done through PayU gateway. After sending FIR report to PayU, they provided details.
One of 4.5 lakh on Bluestone (to buy gold) another of 5.5 lakh from Croma.

Immediately police contacted both of the organizations.

Croma took their own time and by that time the delivery was already done. The scammer had bought an iPhone 14 Pro Max among other thing in the 5.5 lakh purchase. All deliveries went to Delhi. Delhi police has been alerted on the situation and investigation is going on.

Bluestone reverted the transactions and my friend got that part of the money.

Now this 4.5 lakh is being sent to the bank. But he still has to pay EMI for the rest of the money. My friend is saying that he won't be paying anything until the investigation is complete. All money from Axis Bank savings account is already withdrawn.

 

[anirban.choudhuryanirban.choudhury is verified member.]

The scammer took a loan on credit card ? And that on a new credit card ?


Loans on credit card are generally offered at least after 6 months of card usage
Looks like everybody at axis was involved in this case starting from underwriter to BM

 

[src223]

The scammer took a loan on credit card ? And that on a new credit card ?


Loans on credit card are generally offered at least after 6 months of card usage
Looks like everybody at axis was involved in this case starting from underwriter to BM

He just took a personal loan. Not on credit card. Apparently Axis Bank salary account holders have a pre-approved personal loan. The scammer just used that.

 

[srichaitanya]

Banks also clearly state that Banks never ask for OTP/never share OTP with anyone. All this could be avoided if OTP was not shared.

 

[src223]

Banks also clearly state that Banks never ask for OTP/never share OTP with anyone. All this could be avoided if OTP was not shared.

Well yes. But now what can be done.

 

[srichaitanya]

Well yes. But now what can be done.

Details are not full. Even if loan account is opened on his credit card, loan account will be linked to his savings account. How did the scammer withdraw the amount from the loan account? How many times did your friend share the OTP? Because all this is not possible with single OTP.

 

[src223]

Details are not full. Even if loan account is opened on his credit card, loan account will be linked to his savings account. How did the scammer withdraw the amount from the loan account? How many times did your friend share the OTP? Because all this is not possible with single OTP.

See that's what the police is also saying that such carnage cannot be done by a single OTP. The bank's manager is also a suspect here. The police has advised to file a case against the manager as well. Let's see.

I don't know regarding the linking of savings account. He had a savings account at the time of the scam with 4 lakh rupees in it. It was his salary account.

 

[src223]

So the branch did admit that his personal information was leaked. He should definitely file a separate case against the BM then.

Please keep updating here the outcomes @src223

Sure

 

[hemant89]

@src223 What was the final outcome?

 

[src223]

@src223 What was the final outcome?

No major update. The case has gone cold. Last time I asked him, he said the bank has said that if police doesn't update in 2-3 months, they'll have to write off the loan.

 

[magnusfan]

Thanks for the thread....it made me search for cyber fraud insurance...
After spendng 15-20 mins on it, I think SBI stands out with highest coverage at 10 Lakhs for an annual premium of about INR 2.5k. HDFC Ergo provides coverage of 1.5 Lakhs at INR 1.3k...
Unable to find any other better alternatives...any experiences?

 

[src223]

Thanks for the thread....it made me search for cyber fraud insurance...
After spendng 15-20 mins on it, I think SBI stands out with highest coverage at 10 Lakhs for an annual premium of about INR 2.5k. HDFC Ergo provides coverage of 1.5 Lakhs at INR 1.3k...
Unable to find any other better alternatives...any experiences?

No I have not searched as such. I don't even know if these insurances actually work.

 

[magnusfan]

No I have not searched as such. I don't even know if these insurances actually work.

SBI, HDFC, Bajaj has the insurance and the terms are quite explicit: It covers credit card frauds, wrong withdrawals, etc.
I found a strange caveat though: It excludes fraud due to visiting an illegal website / gambling...

Now, if its a fraud, ofcourse, we would have been wrongly diverted to an illegal website!

 

[magnusfan]

Finally, found HDFC Egro with 10L family coverage ! I think its fully worth at 3.5k even if the disclaimers might make it redundant...

 

[Pho3nix]

I found a strange caveat though: It excludes fraud due to visiting an illegal website / gambling...

Now, if its a fraud, ofcourse, we would have been wrongly diverted to an illegal website!

I think by illegal websites it means Dark web websites and websites banned by the Government of India / RBI.

 

[magnusfan]

I think not enough case laws on the topic yet! I always trust law of natural justice rather than reading the detailed t&cs

I think by illegal websites it means Dark web websites and websites banned by the Government of India / RBI.