In photo: Credit Card Association Philippines warns the public about the rising cases of credit card fraud

By Victoria “NIKE” De Dios

Since the time of the pandemic, the inevitable dependence of the people in using the technology for various transactions grows by leaps and bounds. But coupled with the growth is the danger of accelerated cybersecurity attacked that made many users vulnerable.

Such was the case with a high-ranking government official’s recent experience, where a hacker used his card to purchase a million pesos worth of food via a food delivery service. Similarly, a credit card phishing scam was investigated late last year in Cebu city, wherein the credit card information of a 53-year-old businesswoman was stolen and used to purchase medicine from a networking group. 

These incidents are alarming, but not surprising, as the higher dependence of Filipinos on digital transactions makes it easier for fraudsters and scammers to find targets, especially among those who are new to the virtual space. 

Rising fraud in the cyberspace

According to the Credit Card Association Philippines (CCAP), the pandemic caused payments to shift from card-present (CP) or face-to-face transactions to card-not-present (CNP), such as remote payments and other digital payments. This saw a significant increase in CNP fraud during the pandemic, being 29% higher from April to November of 2020 compared to the same period in 2019. 

“Fraud happens more often in cyberspace, given that it is easier to facilitate there. It does away with the need to secure a physical card, and more importantly, it is a safer option for the fraudsters because of the anonymity that the internet provides,” said Alex Ilagan, Executive Director of CCAP. 

Prevalent types of fraud

One type of fraud that is prevalent in the new normal is called an account takeover. This involves acquiring a physical card or its details along with the cardholder’s one-time-password (OTP) to complete online transactions. Scammers and fraudsters normally use social engineering to deceive cardholders into giving sensitive personal information and card details. These fraudsters usually pretend to be representatives of a bank, phone company, or even from a government agency. 

The growth of digital transactions have also contributed to the rise of phishing scams. One of the most popular phishing techniques is sending an email that looks like it came from the cardholder’s bank. These emails have subjects ranging from a new device log-in to a credit card upgrade, and their goal is to attain the cardholder’s card details and online banking credentials. Through the years, phishing emails have gotten more sophisticated, leading online users to continuously fall victim to them even if this type of fraudulent activity has been around for quite some time now. 

Avoiding fraud in 2021

Avoiding fraud in 2021CCAP and its partner banks have been working even harder in the new normal to educate cardholders about the current kinds of fraud, and how to avoid them. CCAP frequently shares simple but useful reminders to cardholders on their social media accounts, such as reviewing bank transactions regularly, being wary of which websites cardholders use their cards on, and other credit card fraud prevention tips.

CCAP also played a role in launching the Scam Proof website last year. Scam Proof is an online platform where cardholders can discover the different forms of fraud, learn about securing their accounts, and even talk about instances wherein they were scammed. Metrobank headed this initiative with the support of banks such as the Philippine Savings Bank, Rizal Commercial Banking Corporation, Citibank, and BDO Unibank, Inc.

More than just educating them, CCAP and banks do their best to protect cardholders through various authentication processes. “The banking industry has established a process to make each transaction as safe and seamless as it can be. Multi-factor authentication has become the standard authentication. During transactions, the authentication process also kicks-in. Certain profiles, patterns, and behavior are continuously checked so customers can have a secure and worry-free banking experience,” Ilagan shared.

Despite all this, cardholders must remember that protecting their accounts is a partnership that they have with their banks. They must do their share in avoiding credit card fraud, and it starts with simple things such as never sharing their account details through messaging apps and social media, as these could be used by hackers and fraudsters. Writing PINs and passwords is also discouraged, as they can fall onto the wrong hands. Cardholders who stay up to date on the latest types of fraud are also at an advantage, as being aware makes it easier to spot any suspicious activity be it through emails, calls, or other channels.

The best advice for cardholders to avoid fraud? “Never share your credit card details, PIN, card security code, or online banking credentials with anyone. Banks will never ask cardholders to disclose these details. Additionally, If you ever receive a notification on suspicious activity, or are in doubt of whether or not you may have accidentally shared your banking details with anyone, call your bank immediately,” Ilagan stressed.

For more information on credit card fraud and the ways to prevent it, you may visit CCAP’s website.

We cannot deny the fact that the nationwide lockdown, dubbed as the longest lockdown in the world due to the coronavirus pandemic disrupted the lives of everyone we know. It has caused economic and income uncertainties weighed down every Filipino who is either employed or entrepreneurs, setting back a broad spectrum of businesses.

Needless to say, there is more than 50 percent of the MSMEs have closed down. There’s been zero revenue in the tourism industry since April. And the most dreadful forecast is that about 5-10 million jobs are to be lost by end of 2020.

Unknown to many, even the credit card industry suffers in the country’s widespread lockdown. As different types of businesses were forced to stop operations, credit card usage slumped as well, reflecting a 27% decline in credit card billings for the first half of 2020 compared to the same period in 2019.

The economic challenges continued to pile up as unemployment rates soared to an all-time high of nearly 20% by June 2020. This not only made card holders hesitant to apply for new credit cards; it also made it more difficult for them to settle their credit card debt.

According to the Credit Card Association of the Philippines (CCAP) Executive Director Alex Ilagan, based on their study, “The high unemployment rate, as well as the loss of livelihood for self-employed individuals and small business owners, took its toll on the credit card industry.“

We saw an unprecedented rise of credit card holders being unable to pay their balance, which resulted in the credit card past due level growing by as much as thrice by September 2020 as compared to the pre-ECQ level,” Ilagan added.

Consequently, the high percentage of unpaid debt has forced banks to allocate a significant amount for credit loss provision, pushing credit costs to unprecedented levels. With these immense changes, the industry continues to do its best to survive, and this includes credit prudence and leveraging opportunities to save costs through the digitization of customer service.

Maintaining good credit standing during the pandemic

Ilagan noted the need on being on top of one’s expenses and maintaining a good credit standing, even during this pandemic. Credit cards are powerful tools, and cardholders should use them responsibly. This is because situations such as a pandemic are temporary, and it may not be the only time that credit card holders must utilize their cards. They may also need to depend on their cards to rebuild their lives after the pandemic, or for unforeseeable emergencies in the future.

“The best steps that credit card holders can take to maintain good credit standing during the pandemic is to ensure that credit card bills are paid on time. They should also avoid maxing out their credit limits because it will reduce their credit score,” shared Ilagan.

“Financial discipline is important, and credit cards should be viewed as a tool for convenience in making payments and a readily available standby line of credit for emergency or big purchases,” he added.

For credit card customers whose financial condition may have been impacted by the economic slowdown as a result of the pandemic, in addition to extending the mandated 60-day grace period under the Bayanihan Act to Recover as One (BARO), credit card issuers have implemented various forbearance programs. “Credit card customers can avail of these forbearance programs to help them repay their credit card debts through easy and flexible repayment schemes,” shared Ilagan.     

Digitization of customer service

Aside from navigating the new normal, banks and financial institutions have to pivot into the digital world. Credit card issuers have continuously pushed for the shift from paper-based statements to electronic billing statements among its customers, now reaching more than 75% enrollment for this industry-wide. This helps ensure the timely delivery of credit card bills amid the pandemic. Banks are also strengthening their online interactions with cardholders, be it through emails, social media platforms, or chatbots.

“The credit card industry is intertwined with the state of the national economy. Most economists expect the recovery to start by early next year, so the same expectation can be applied to the credit card industry. Hopefully, the efforts of our stakeholders, alongside the efforts of the government, will be enough for the industry to get back on its feet,” said Ilagan.

Read related stories:

https://thephilbiznews.com/managing-your-finances-for-the-year-ahead/

https://thephilbiznews.com/credit-card-owners-warn-against-online-fraud/

Holiday shoppers and merrymakers usually indulge in shop-till-you-drop attitudes. After the holidays, the is the time when one realizes the financial burden.

All the festivities, gift-shopping, and reunions made for a busy season – one that lifted people’s spirits but may have drained their bank accounts. This is why it is important to get your finances in order as the year kicks off. 

According to Alex Ilagan, Executive Director of the Credit Card Association of the Philippines (CCAP), “Prioritizing your credit card expenses is a great first step in being financially responsible.”

“Every cardholder should be accountable for their finances no matter how big or small their debt is. Unsettled card balances can lead to issues in the future. They should be strategic in both using their card and dealing with debt, especially because it can help them make smart financial decisions all year round.”

Here are five tips from CCAP that can help you manage your card, especially after the holidays:

1. Review all your due dates and create a timeline for payments

Before you settle your card’s balance, make sure you know what you’re paying for, how much you need to pay, and when you need to pay. Once you know all of this, allocate a part of your budget to pay your credit card. Setting reminders and creating a timeline for your payments can also be helpful, especially if you have multiple credit cards. Don’t miss out on your payment dates to avoid a penalty for paying late. 

1. Check your accounts online via mobile applications 

Always check your transaction history to keep track of your spending and to monitor any suspicious activity. You can easily do these once you download your bank’s mobile app. These apps are here to create a more convenient banking experience for you as it speeds up checking of your balance, making transactions, and verifying your history. 

1. Settle your debt as soon as possible

Don’t wait for due dates. Once you have money, be it from your salary or from other ventures, put aside what you can for the payments you have to make. You should also be strategic in allocating money, which means prioritizing more urgent payments first and avoiding unnecessary expenses that can add to your debt. As much as possible, try to pay your outstanding balances in full. This may be challenging, but it helps you avoid paying interests and manage your finances better in the long run. 

1. Communicate with your banks

Banks can help you learn proper credit card usage and go about any debt you have. You shouldn’t be afraid to approach them for any questions or concerns regarding your credit card. For example, if paying your balance in full proves to be difficult, you can call your bank for balance transfers and debt consolidations. Depending on your situation, this allows you to pay the balance in installments and control the interest you’ll be paying. Always remember that your bank is there to offer assistance with your account.

1. Don’t take debt lightly

A seemingly small debt can easily become something that you’ll have to pay off for weeks, months, or even years. Keep in mind that your credit card isn’t ‘free money,’ and make sure that you can pay back whatever you swipe your card for. 

These are just some tips to help you become a more responsible cardholder. As long as you manage your credit card, honor your financial commitments, and address debt properly, your holiday spending won’t create any problems in your finances. 

“Proper management of one’s debt is just one aspect of being an effective credit cardholder. CCAP believes that these tips are simple efforts that Filipinos can follow to help them spend right and keep their accounts in good standing,” Alex emphasized.

By Victoria “NIKE” De Dios

With the alarming increase of fraudulent online transactions using a credit card, the Credit Card Association of the Philippines warns the public anew as Christmas season is fast approaching and online purchases surge being the most convenient way to shop now given the traffic during the holiday rush.

In the advisory sent to THEPHILBIZNEWS, CCAP underscored the growing number of Filipinos falling victim to credit card scams.

“Most of them out of excitement may have clicked a phishing website or may have mistakenly shared sensitive private information with a fraudster. This is no surprise, considering that most people use the convenience of credit cards as a means of payment on mobile applications and web browsers. Fraudsters are also taking this opportunity of convenience since their risk of being identified and apprehended when doing fraudulent online transactions is very low,” CCAP explained.

Just five years ago, counterfeit credit cards were widespread. The implementation of Europay, Mastercard, and Visa (EMV) Chip enhanced the security of credit cards as it generates a unique code for every over-the-counter transaction. Fraudsters have now shifted to online fraud. 

Phishing is another popular form of fraud. This happens when fraudsters attempt to trick cardholders into providing confidential information such as their log-in username and password, security questions and answers, and other account details. They usually send phishing emails that look like they came from banks, and ask the cardholder to update or confirm their account details. Phishing can also be done through mobile messages and fake websites. Any information disclosed can be used by the fraudster. 

Then there is the account takeover — when a fraudster gathers information from an account holder to complete online transactions. Fraudsters may call a cardholder pretending to be a bank employee offering card upgrades or a security officer asking for confirmation of their card transaction. These convince the account holder to surrender card details and the one-time password (OTP) sent to their mobile phone. Once fraudsters have the OTP, they can use it for online transactions.

These are only some of the ways that credit cards can be compromised. Credit card companies and organizations, such as the Credit Card Association of the Philippines (CCAP), are proactive in educating customers on different modus operandi. These organizations also invest in fraud detection tools to monitor transactions. Cardholders, however, still need to do their part to protect their accounts. Being vigilant and educated on the different forms of fraud can help consumers to avoid becoming a victim.

Here are the several ways on how you can avoid falling into online fraud using your credit card as presented by CCAP Security & Risk Committee: 

Always keep sensitive information private. This is the most important thing to remember when it comes to safeguarding accounts. Information such as credit card number, card expiry date, or the card verification value (the 3 digits at the back of the card) should be kept secured. Cardholders also should never surrender their credit cards to anyone. Banks won’t ask their customers to surrender their cards in exchange for services or promotional offers.

Don’t entertain calls wherein the caller asks for OTPs. Bank officers will never ask for a cardholder’s OTP, it isn’t meant to be shared with anyone. 

Be cautious in replying to emails about banking information. Phishing emails can look legitimate these days. If cardholders receive an email requiring them to enter their banking details, it would be best to call the bank to verify the email’s authenticity. They should also be cautious when connecting to public Wi-Fi. 

Regularly monitor transactions and accounts. This will help cardholders keep track of everything and see if there is any suspicious activity with their transactions. If cardholders suspect that they’ve become a victim of account takeover, they shouldn’t hesitate to call their bank so that they can arrange their account’s security.

Watch out for official bank notifications. Banks send cardholders emails or text messages to verify credit card transactions. Cardholders notice a suspicious transaction must call their bank immediately to report it. It also helps for cardholders to keep their contact information updated with their banks. 

Now that fraudsters are finding more creative ways to secure sensitive information, it is important to be always vigilant. The government and organizations have numerous regulations and preventive measures for fraud, but cardholders should not just depend on institutions to keep their accounts safe. Every cardholder must know what to do in case of any suspicious activity and avoid becoming a victim of fraud. 

For more information on how to avoid credit card fraud, visit https://www.ccap.net.ph.