Are hotel key cards safe? Well.....

Many hotels and resorts use electronic key cards. These cards with a magnetic strip are programmed in such a manner that once the duration of the stay is over, the person does not get access to the room.

The key cards make it impossible to pick up a card and break into a room. Electronic door locking systems were introduced across the globe as they help enhance hotel security, but what information does it contain?

Are electronic key cards safe? Well, it could be a threat depending on the details it has stored on it.

"All hotels mention the customer's name, address, room number and duration of stay in the key card. The key card of the hotel has vital information. Some of the hotels and resorts do store personal details -- including credit card number and its expiry date," says Shah Amber, consultant (information security management services), Mahindra Special Services Group.

Agrees, Pramoud Rao, managing director, Zicom Electronic Security Systems, there are many ways the credit cards can be misused in a hotel. There are chances that key cards could be lead to a data theft.

Some of the five-star hotels declined to reveal details of the key card citing security reasons.

"The key card has the code to access a particular room. It does not store any other details, not even the name of the guests," Kanan Udeshi, manager communications, The Oberoi Group, said.

The key card has the name of the guest and the period of stay. Credit card details are recorded separately by the front desk to validate payment. There is also a provision in the system to make the credit card function as an e-key, according to an industry official.

If the electronic key card contains information like the credit card details it can be easily manipulated.

"There has been no data theft reported so far in India, but there are chances as the information remains on the card till it is handed over to another guest. If the credit card number is stored in the key card, when a guest uses other services in the hotel, he can swipe the card, which in turn is aligned to the front desk for billing," says Shah.

"We cannot reveal any details about the key card. We do not disclose any information that could be a threat to our guests," Nikhila Palat, Taj Hotel spokesperson, Mumbai, said.

The key card is not allowed to be taken by the guest and it remains with the hotel when the guest leaves the hotel.

"The details from the card can be accessed by swiping the card in a normal scanning device. There have been cases abroad where the key card details were used to make mock credit cards. Most of the time the customers are not aware of the fact that the key card holds their credit card number," Shah points out.

If some of the employees connive with miscreants they can access all the information by just swiping the card in any scanning device, Shah adds.

However, the All India Credit Card Users Association has not received any complaints. "There has been no case of fraud reported from a key card data theft. The possibility of hotels giving credit card numbers on key cards seems remote," says Vinod Kumar Chand, general secretary, AICCUA.

Meanwhile, Trend Micro, a leading antivirus and Internet content security software and services entity, says on its website that this a hoax and calls it an 'urban legend'.

The firm says that there is a 'rumour circulating via email which alarms the public that hotel key cards contain personal information about the guest that can be put to ill use by malicious hotel personnel who have easy access to it. This hoax erroneously claims that the guest's home address and credit card number are recorded on key cards dispatched by hotels, thus exposing their customers to unauthorised purchases and cash withdrawals made using the sensitive information'.

The company says that although the origin of the email is based on a real investigation effort of a Southern Californian police district, US authorities have ruled out any security risks this controversy may pose. Moreover, hotel owners have clarified that only minimal information about their guests -- like their names, room numbers and arrival/depature data -- are encrypted in the cards they use.

Data theft

Shah Amber explains how data theft can be prevented.

"Internal threat is a big risk factor for companies. Companies must see to it that any data that can be misused should be completely secure. There are all kinds of technologies to secure IT systems," Shah says.

"Companies have hiked IT security budget and have made no compromise on this. Many have changed application security procedures as well. They have learnt how to recoup from the crisis," he adds.

"As for individuals, they must be very careful about data theft with proper anti-virus systems installed in their computers. It should be updated. They must make sure their Wi-Fi is not misused. They must not disclose e-mail id to any unknown site. They must also make sure children do not surf sites and accidentally pass on information," says Shah.

"There are many fake sites which can lure you and many end up giving their passwords as well. So there is a big threat so one must be very careful. To avoid hacking they can secure ports."

Internet has become an open medium so it is exploited by terrorists. But it is not possible to shut down all those sites. One must be very cautious while surfing and sharing information.

Source: Rediff.com, By Manu AB

PEEP SHOW - Fake it & you may lose your dream job

ECONOMIC RECOVERY HAS BROUGHT EMPLOYERS BACK TO THE HIRING ZONE, BUT IT’S NOT EMPLOYEES’ MARKET YET Cos Step Up Background Checks Of Prospective Employees’ Educational & Personal Information

Our Bureaus NEW DELHI | KOLKATA

As the economy rebounds and hiring begins to pick up pace, companies are going to unprecedented lengths with sweeping background checks of prospective employees. The scope of pre-employment screening, which has been traditionally limited mainly to senior executives and involved basic searches to verify the accuracy of the resume, the educational background and biographical data, is now getting vastly expanded. All job applicants, not just those at senior levels, are being scrutinised with a fine toothcomb. And almost no area is off limits.

While false claims about education and employment are among the main triggers for rejection, some job applicants have been tripped up by their personal lives. One such was denied a job after an agency specialising in background verification discovered that the individual was having an extra-marital affair. The agency asked the prospective employer, a multinational company, to put the application on hold by filing a ‘pink’ report and the employer obliged. “In our lingo, green means a goahead, pink is doubtful and red signifies rejection,” said SK Sharma, group director-HR at Premier Shield, a security solutions company that carries out background checks on behalf of corporates. A red flag can be activated by a number of other factors: criminal history, substance abuse, a poor credit track record or even dodgy equity trading. While former colleagues, classmates and those living in the applicant’s neighborhood are tapped for information, some agencies go even further.

Premier Shield admits to setting up sting operations to test for ethics and some companies infiltrate staff into the organization where the applicant is working to gather information about the prospective employee’s conduct with colleagues, especially women.

Arun Bhagat, vice-president, HR, with infrastructure group GMR said he visits colleges and universities and at least two past employers to do reference checks of candidates. It recently sacked an employee just days after he joined after it was discovered that he had falsified some documents. “For key roles in finance and at executive levels, we make discreet enquiries on the reliability of the professional, his reputation in and outside the organization and even carry out a search on the internet,” he said. Mr Bhagat insists that the checks are carried out with the consent of the prospective employee. Software and back-office service providers were among the first to make background checks mandatory for all potential hires. Many IT companies and HR consultants like Ma Foi engage firms such as First Advantage, PP Verify, PremierShield, Onicra, Authbridge for pre-employment screening, which can cost between Rs 1,000 and Rs 5,000 per employee.

Pinkerton Consulting & Investigations India, a detective agency, which undertakes screening for several multinational firms, found in a recent survey for IT and IT-enabled Services providers that about 4,000 companies, universities and institutes of dubious background were providing fake documents. Pradeep Bahirwani, vice-president (talent acquisition) at Wipro said that in the IT industry the average percentage of fake resumes is 20-30%. “Based on preventive and corrective actions less than 1% of the total active applications we receive would be fake,” he added.

Among other sectors, the financial services industry, which hires an estimated 75,000 employees every year, is now actively adopting the practice started by IT companies. Battling a marked rise in the incidence of fraud by employees — a recent study by risk consultancy Kroll showed that fraud is increasing twice as fast in the financial services sector than in others — companies are snooping on potential hires more than ever before.

“This is part of the new belt-tightening system in all high-profile recruitments in the financial sector,” said veteran headhunter, Ajit Isaac, MD & CEO of Ikya Human Capital Solution.

While nearly all leading banks carry out verification with the police for criminal history, some private banks like Axis Bank have also started checking the credit history of recruits. “Since credit history is closely associated with one’s reputation, reviewing it is becoming a norm before recruitment,” a senior Axis Bank official said. The country’s largest private sector insurer ICICI Prudential Life concedes that nearly 7% of the candidates it reviewed for hiring had a fraudulent past. The company has now partnered with reputed risk management agencies to undertake background screening.

“As one of the leading players in the insurance space, we are deeply concerned about the incidence of fraud and are working with the industry to explore ways to mitigate the risk of fraudulent activities,” said ICICI Prudential Life HR head Judhajit Das. The insurance sector is now even thinking of creating a common central database that will include the names of all employees fired for fraud. The proposal, put forward by Bajaj Allianz General Insurance, is now being discussed by all leading players.

The Life Insurance Council, the grouping of life insurers, is also keen on the idea. “However, someone has to manage such a database of delinquent employees — it may either be us or the regulator IRDA,” said chairman SB Mathur. With curious employers prying deeper into the backgrounds of potential employees, there are concerns that they could intrude into individuals’ privacy. E Balaji, CEO of HR firm Ma Foi, observes that in Europe, there are stringent privacy laws and strict regulations and guidelines about how much an employer can check the background of an employee. “In comparison, awareness about privacy laws is much lower (in India). Companies just take a broad declaration from the individual about such background checks,” he said.

Reporting by Monica Behura & Mahima Puri in New Delhi and
Writankar Mukherjee, Debjoy Sengupta & Atmadip Ray in Kolkata

Good times for fraud

Fraud is a growing problem for corporate Australia, but there are tools that can detect suspicious activities.
Litigation is often cited as the main beneficiary of any business downturn, but there is another oblique area of financial services which proliferates during a financial crisis. Accountants are now reporting an unprecedented boom for their forensics departments, because in a downturn, fraud is rife.
Deloitte Australia claims that it has undertaken as much as five times its normal work in this area over the past 12 to 18 months and there is no sign of it slacking off. KPMG has also reported a considerable increase in its forensics business, and the need to take on new personnel to cope with the “boom”.
Unlike litigation, fraud is far less heralded – it is the corporate stain which dare not speak its name. Often accountants are brought in with both a covert and an overt role – overtly as auditors to check accounts and covertly to dig deep inside company data to check for both forced and unforced errors.
Frank O’Toole, Deloitte’s national financial crimes services leader, says the uncovering of fraud tends to occur when companies are compelled to examine their spending. “Sometimes it comes up during a normal cost-cutting exercise,” he notes.
While the media tends to hype up the proliferation of external, web-based fraud, internal fraud is by far the bigger problem for corporate Australia, costing the economy around $3.5 billion a year, according to the Australian Institute of Criminology. KPMG says around 65 per cent of frauds perpetrated on companies are internal. O’Toole says that often it is the employee who would be least expected to commit fraud who is tempted. “Normally those who would choose to do the right things are faced with certain pressures – they’re not getting a pay rise and they’re struggling with mortgage repayments and school fees – faced with the opportunity to misappropriate $20,000 or even $50,000, they succumb.”
KPMG’s head of forensic, Gary Gill, says it will continue for some time to come: “They’re saying the worst is over and things are looking good – well the bottom line is people are still doing it tougher now than 12 months ago,” Gill says.
Simple tricksWhat kinds of frauds are being discovered? Gill says much of the fraud is very simple – on the accounts payable side KPMG is seeing a lot of false invoicing – the setting up of bogus vendors and then the processing of false invoices.
Gill also sees a lot of simple online payments fraud, much of which is barely disguised. “Sometimes they just transfer money straight out of the company account into their personal accounts,” says Gill.
O’Toole mentions slightly more canny pretences – the collusion with suppliers, whereby invoices are inflated for the benefit of both parties. Expenses fraud is also escalating, says O’Toole. “They tend to be around the $10,000 or $15,000 mark but we have seen expenses fiddles of up to $1million occurring.”
Forensic departments never tire of saying that companies which fail to segregate authorization and custodial duties will always be more susceptible; they also point to the need to regularly test internal controls for weaknesses.
Last but not least, a whistleblower process – which may incorporate a number of lines of access to report suspicions anonymously, is deemed essential.
Deloitte Forensic research found that around 70 per cent of frauds are usually identified by someone else in the organization, and over 80 per cent of staff who will not report fraud cite a fear of retribution as the reason.
Insurers even say that without good lines of reporting suspicions, a company will not be considered for fidelity insurance, which covers Corporates for internal fraud. See Fire, flood or … fraud?
Technology sniffs out fraudBoth Gill and O’Toole say one of the most exciting developments has been the growth of data analytics technology to monitor suspicious electronic transactions among thousands of pieces of information.
Document management systems are also becoming critical to support complex legal cases stemming from the misdeed.
Deloitte has its own proprietary system, as does KPMG. Both are constructed to analyze the million pieces of data in everyday business systems, such as comparing vendor master files to employee records. They can uncover real frauds as well as operational mistakes.
What kinds of things can they flag? Gill says you can run a comparison between accounts of employees on the payroll system against your vendor bank account numbers. “If an employee has the same number, you know there’s a problem.”
“You can look for duplicate payments – one legitimate, one false. Also round sum payments – very few invoices are for round sums. It’s a good idea to have them checked as well as any payments processed outside of normal business hours,” Gill says.
Deloitte cites a number of “red flags” the technology is most likely to throw up, which also includes things such as short-term changes to employee or supplier accounts.
Another give-away that fraud may be occurring is the repeated structuring of transactions just under the delegated authority limit. “Of course, five payments of $9999 authorized by a staff member with the authority to approve costs up to $10,000 would certainly be subject to close investigation in any organization … if detected,” says O’Toole.
Transactions conducted directly through the electronic funds transfer system rather than the accounting system is also subject to scrutiny. “Typically, instances of EFT fraud appear to be linked to issues around access to computer log-ons and inappropriate use of passwords,” says O’Toole.
Is the cost of using this technology worth it? A company can spend millions trying to get to the bottom of its problems, but huge frauds have been discovered quickly – and at a relatively low cost.
Source:- The Sydney Morning Herald; By Adam Courtenay

Banks pushing chip-and-PIN place elderly at high risk of fraud

Customers kept in the dark as banks are reluctant to be upfront about alternative to chip-and-PIN cards
Thousands of elderly people are being left vulnerable to fraud because of the banking industry’s failure to explain to customers that there is an alternative to chip-and-PIN technology.
Under the Banking Code, all banks must offer a “chip-and-signature” account for those who may find it difficult to remember their PIN, or cannot use a chip-and-PIN terminal. However, Times Money has discovered that some banks are reluctant to tell customers of this alternative method.
Vulnerable people who are forced to use chip-and-PIN are likely to write down the number or tell it to someone else, which means that it is highly unlikely that they will be reimbursed if they become a victim of fraud. Jane Vass, of Age Concern and Help the Aged, says: “Many older people are driven towards payment methods that they are not comfortable with, putting their financial security at risk.”
John Walter, a pensioner from Devizes, Wiltshire, was recently sold a fee-based NatWest current account that came with a chip-and-PIN card. The card was stolen and thieves drained his account of £7,000 by withdrawing money at cash machines over 14 days. Mr Walter, who is 73 and described by friends as vulnerable and forgetful, admitted to NatWest that he had written his PIN in his diary. Although the diary was not stolen, NatWest still refused to reimburse his losses.
Elizabeth Merritt is a friend of Mr Walter and has taken up his case with NatWest. She says: “John has been with NatWest for 50 years and trusted the bank implicitly. He does all transactions inside his branch and had never even used his card. Despite this, NatWest still persuaded him to pay £13 a month for a chip-and-PIN account with features that he would never need. He was never told about chip-and-signature.”
NatWest told Mr Walter that somebody with access to his home must have seen the PIN and stolen his card, and that this constituted a breach of his terms and conditions. He was also told by NatWest that none of the cash machines used in the fraudulent transactions had CCTV cameras, and “this may be something the fraudster had considered before using the card”.
When Times Money approached NatWest, the bank maintained that Mr Walter had been negligent. However, it agreed to refund the £7,000 as a gesture of goodwill. Mr Walter has now been given a basic bank account and will request chip-and-signature.
Another pensioner, Rosa Farrell, of Hereford, recently had £3,500 fraudulently withdrawn from her bank account by her eldest son, who had a gambling problem. Mrs Farrell, 65, wrote down the PIN and kept it well hidden in her house, away from her card, but on a visit her son managed to find the card and the number. He was convicted for the theft.
Mrs Farrell’s bank, The Co-operative Bank, said that because she had written down the number she had been negligent and would not be reimbursed. She had to take her case to the Financial Ombudsman before she recovered her money. “I don’t know why the bank did not stop the suspicious transactions, which were totally out of character,” she says. “In the end, the ombudsman ruled that I was entitled to believe that my bank details were safe in my own home.”
The Financial Ombudsman Service, which resolves disputes between consumers and banks, deals with about 150 complaints about chip-and-PIN fraud every month — usually when someone’s bank has refused to compensate them for losses.
Fewer than 500,000 people have a chip-and-signature account, according to the UK Payments Association, despite the banks agreeing to offer vulnerable people an alternative to chip-and-PIN when it was introduced in 2004. However, there are 700,000 people with dementia in the UK, according to the Alzheimer’s Society, while the Royal National Institute for the Blind says that 1.8 million people are blind or partially sighted. Many of these people should have chip-andsignature accounts.
Sandra Quinn, of the UK Payments Association, says: “It would be very disappointing if banks were not giving chip-and-signature to customers who need it. Some people may find in the future that chip-and-PIN is not suitable. They have every right to ask for an account with chip-and-signature.”
Pensioners are also encouraged to use chip-and-PIN to receive their state pension and other benefits via the Post Office card account, which was introduced in 2003 to replace pension books. Neil Duncan-Jordan, of the National Pensioners Convention, says: “Some pensioners still queue up to receive their pension holding a piece of paper with their PIN on it. Anyone who is uncomfortable with PINs can request to have benefits sent by cheque in the post.
“Chip-and-PIN is simply not suited to many elderly people, and banks and the Government should do more to promote alternatives.”
Ross Anderson, a security expert at the University of Cambridge, says that it is in banks’ interests to push chip-and-PIN. He says: “Quite simply, if you use a PIN, disputed transactions are your fault. However, a forged signature makes a transaction null and void, which means that the banks cannot hold customers liable. Banks are exploiting the old and vulnerable because they want to take away their consumer protection. It’s a disgrace.”
The Banking Code, to which all banks must adhere, states: “We will tell you about alternatives to chip-and-PIN, which are available if you are unable to use a PIN because of a disability or medical condition.”
Several high street banks confirmed to Times Money that they offered chip-and-signature, but emphasised that it was only for specific types of customer. A spokeswoman for Barclays says: “Chip-and-signature is for customers who have a disability that makes using a PIN difficult or imposs-ible, either because of dexterity problems, visual impairment or difficulty remembering the number. All other customers are issued with a PIN.”
A spokesman for Santander, which owns Abbey, Bradford & Bingley and Alliance & Leicester, adds: “Chip-and-PIN is an important tool in fighting card fraud, and PINs should not be divulged to other people or written down. Customers can change their PIN to a more memorable number.”
New rules relieve customers of burden of proof
The Banking Code will be abolished next month and replaced with a complex set of rules, the Payment Services Regulations (PSR).
Experts fear that consumers will no longer have a user-friendly set of guidelines that clearly explain banks’ responsibilities. Instead, they will have to wade through a 152-page document for details of their rights.
The Financial Services Authority, the City watchdog, will enforce the new regulations. It says that victims of fraud will actually have more protection, with the onus on the bank to act quickly to prove that a transaction was the customer’s. Unless the bank can show a good reason why it needs to investigate the claim, it will have to refund the amount immediately.
Page 38 of the PSR states that if a person notices a suspicious transaction on an account, it is for the bank to prove that the transaction was “authenticated, accurately recorded and not subject to technical breakdown or other problem”.
Currently the onus is on customers to prove that suspicious transactions were not their own. The Banking Code states: “We will need you to give us confirmation or evidence that you have not authorised a transaction.”
Source:- Times Online, UK ; By Lauren Thompson

Lawyers, CAs more prone to loan fraud

ntermediaries such as lawyers, valuers, charte red accountants, statutory auditors, real estate developers and motor vehicle and agricultural equipment dealers have largely been found by the Reserve Bank of India to be involved in frauds in retail loans.

The central bank, in its report on trend and progr ess of banking in India for 2008-09, said there has be en a steady rise in frauds reported in the retail loan segment, with increase in retail loans portfolio of banks in recent years.

Banks have been asked to provide to the Indian Ba nks’ Association the na mes of unscrupulous intermediaries who aid the perpetration of frauds, jeopardising the interests of banks.

Banks are required to forward names of tainted intermediaries, including professionals involved in frauds, to IBA after satisfying themselves of the involvement of the third parties concerned and after providing them with an opportunity of being heard.

The RBI is also in the process of introducing a monitoring mechanism for identification of outlier ban ks, where there is high concentration of frauds. The level of risk residing in a bank would be determined after taking into account recoveries made, punitive action taken against staff involved and other steps taken by the bank with regards to the fraud.

The Reserve Bank of India is also in the process of framing guideli nes to ensure that the incidences of frauds are facto red in while carrying out supervisory review and evaluation process in the banks for the purpose of assessing the fraud risk in specific and operational risk in general.

RBI has decided to cover the fraud risk from now on during its quarterly discussions with banks. The RBI is also carrying out modifications in parameters for systems and controls comp onent of Camels (capital, asset, management, earnings, liquidity and systems) rating framework, which would reflect the status of a bank as an outlier or not ba sed on incidences of frauds and the strength/we akness es of banks’ associated systems and controls.

Based on the paramete rs, banks would be categori sed as outlier banks, RBI sa id. Once they are categor ised as outliers, the relevant information with regard to those banks would be taken up for any regulatory response.

Source:- www.mydigitalfc.com ; By Rajendra Magan Palande

Credit cards or misery cards?

In keeping with the spread of sophisticated life styles in the west, the credit cards phenomenon has invaded India and most people have gotten so used to it that they can not live with out it. However, unlike in the west, the dice here in India is totally loaded against the user as the Reserve Bank of India is able to do very little in securing the user, says SS Kumar.

The following are the ways in which card issuing banks try to fleece the card holder:

Late fee

This is charged randomly because of a funny rule claimed by the banks that the deadline interpreted by them is the date by which they are able to realize the funds in their account. So against a deadline of say, 27th of a month, even if you drop the cheque in to their collection box by 23rd, you could still be penalized if this bank is unable to encash this cheque before the quoted deadline. The question one might ask is, if you have dropped a cheque payment 3-4 days in advance, what control do you have on the subsequent events or delays?

One of the reputed banks was regularly playing this game with me till I caught them. I dropped two cheques with same deadline payment into the same collection box on the same day, and at the same time, for two separate banks. The second one, a bit more professionally run, acknowledges receipt of my cheque payment in time, with thanks, through sms, whereas the other one, based in Chennai wants to make a fast buck, comes back claiming a late fee, as usual. They sheepishly reversed the charges when I escalated the matter to RBI.

RBI must immediately issue a directive that when a payment deadline is mentioned as 27th of a month, the deadline should apply to the physical act of dropping your cheque into the collection box and not to the date, the bank realizes the payment, because no one controls the declaration of public holidays in the intervening period.

The quantum of late fee itself is questionable. A few years back it was just around Rs 200 or 250, today, most banks quote around Rs 650. As an extension of their greediness, they let you buy consumer durables under a specially created EMI scheme. They use this neat opportunity to not only claim late fee for a particular card, VISA or MC and separately, once more, for these so called special schemes under these cards. So you can be charged late fee more than once on the same card, because of sub sections under it.

Disputed claims

Many of the banks issuing card related monthly statements assume that the card holder does not go through the statements minutely and feel they can get away with several erroneous billings.

Here the banks have another funny rule. Even if you feel some entries in the statement have nothing to do with you, they insist that you pay the full amount first and then wait for the next two months for reversals to take place.

If the discrepancy is of the order of Rs 100 or 200, it does not pinch, but often the erroneous charge is in the order of Rs 6000 - 8000 or even more. The card holder is simply forced to watch his funds in the hands of the bank, that too earning zero interest, whereas in the reverse situation, the bank immediately gleefully charges you around 4 per cent interest per month.

Every where, outside India, say in US or Canada, the user is not required to pay the disputed amounts and can pay deducting the amounts that look questionable. RBI is blissfully unaware of this rule, and this ignorance on RBI's part encourages banks in India to rough ride on or fleece the hapless customer still further.

Biggest fraud through sale of policies on phone

The biggest frauds perpetrated by card issuing banks are through the so called sale of insurance and medical cover policies over the phone. There have been countless victims of this well rehearsed fraud that takes place with absolute regularity. It operates like this.

A lady comes on line, uninvited, starts blabbering on the unique benefits of some insurance or medical cover policy that they are marketing. You express your indignation over this sudden invasion of your precious time. To get them off your back, you tell them to send all the details through post and once you are convinced, you will get back to them. If you thought, you put a lid on the matter firmly, you are sadly mistaken. You do this because you want to get a full grab of the details including what is really in fine print.

It comes your next month's statement and surprise of surprises, she has already billed you for this medical cover even before receiving your approval. You confront her, trying to control your rage at this sacrilege, and she tells you coolly, "when we spoke on the phone, you never emphatically said no to my scheme; so we presumed you said yes and according proceeded ahead by billing you."

Now, nothing can be done, you will have to pay the entire first year's premium ! "Oh, we have a recording of our entire discussion and we can play it back for you if you like", is the last punch line. This fraud is being played on people day in day out and the pity is that the RBI is fully aware of this large scale fraud and has not done a thing about it, till date. If it comes to a real showdown in a court of law, where is the guarantee that the bank would not have doctored the recorded conversation to edit out your objections during the same telecon?

Selling policies on the phone is an accepted practice in the west but there the underlying theme is utmost honesty because the buyer can sue them in case of malpractice. Here the banks indulge in their day light robbery along the above lines because the local laws are so weak. It is high time either the RBI or the Finance Ministry or the Supreme Court woke up to the large scale fraud. There have been several hapless victims of this fraud. The government should ban this altogether and disallow the banks to charge card holders until they have a written approval from the customer.

Cross check your monthly statements

Many people assume that since the monthly card statement comes neatly printed on a ready format each month, the entries must be correct. For god's sake and your sake, please double check them. I did precisely that and found that this reputed bank was trying to fob me with an excess charge of Rs 75,000, not Rs 75 or 750, exactly, Rs 75,000!When I reported this to RBI, overnight, this bank revised downward the total outstanding against my name by this whopping amount. Remind yourself that such social parasites exist everywhere, they have no particular dress code and more often than not, they are white collared workers in such banks. When confronted by me with the facts, this bank promised to look through the matter The bottom line, I would have easily allowed myself to be fleeced if I had not been seriously reviewing their statements and become poorer by Rs 75, 000 overnight, had I not decided to confront them with equal aggression and crudeness.

Why do the banks charge exorbitant interest rates in India?

Thanks to some recent initiatives of RBI, when you apply for a personal loan, the banks have seemingly removed all the extra loadings on the sanctioned loan in terms of processing fee, one time fee etc. and they no longer talk of penalty on loans that are pre-closed.

The general interest rates in India have nose dived from a high of 15-20 per cent earlier down to around 10 per cent now. In spite of this, MNC banks charge over 40 per cent, for credit card spends, despite RBI's rumoured directive to them to charge no more than 3.1 per cent a month. There is absolutely no uniformity in these charges and some banks, like Deutsche Bank charge over 42 per cent per annum. In the US and Canada and other western countries, the rates hardly exceed 15 or 16 per cent per annum.

Why should RBI permit such a large difference in interest rates? After all the source of funds (seed capital) of these MNC banks is the west when they start their operations in India and this is obtained at a much lower insignificant rates of interest, say 2 or 3 per cent per annum, which is the ongoing bank rate for personal loans. It is high time RBI seriously looked at these vast interest differentials.

Life time membership fee fraud

Initially, when these banks brought their cards into India, the standard practice was to charge membership fee every year. Since new entrant banks were desperate to make a breakthrough, some of them waived off this annual fee for using the card. To get even, the established banks played a new trick. They came up with a scheme of a one time life membership charge for say VISA or MasterCard. If you heaved a sigh of relief after having paid this one time life time fee, you were again in for a major surprise.

Six months later, the same bank introduces a new version of the VISA or MasterCard and again debits you with a new lifetime membership fee.

The simple logic one understands is something similar to the life time tax you pay for your car. Once you have paid the life time tax for your car, you are not required to pay for it again, just because you put a new coat of paint on it or just change the worn out tyres.

So, why should this be any different in the case of lifetime membership of credit cards?

I raised this issue with RBI long time back and a response is still forthcoming.

Bottom line

It is very obvious that RBI has been totally unequal to the dubious machinations of the MNC banks in India so far and has a lot more homework to do to bring in some discipline in the working of these banks.

Unless there is a quick induction of checks and balances these banks will continue to merrily fleece the average Indian card holder. Perhaps, the finance ministry under a veteran like Pranab Mukherjee can take the quick initiative and push these reforms through RBI.

SS Kumar is CMD of ASTRAL Systems (India).

7 myths about Swiss bank accounts busted

You are watching a movie and in that a well-dressed gentleman, arrives in an expensive car and alights in front of a building whose doors are flanked with mercenary-looking guards. The gentleman walks inside and is met by a distinguished-looking elderly gentleman, to whom a series of numbers are rattled off. The man is then ushered into a vault-like facility. Welcome to the stereotypical depiction of a Swiss bank.

When you think about Swiss bank accounts, words like mysterious, secret, guarded, rich and out-of-league come to a person's mind. What many don't know is that Swiss banks are just like any bank in the world. Here are some myths which need to be shattered about Swiss bank and bank accounts.

Swiss banks only service the filthy rich

Nothing is further than the truth. Majority of a Swiss bank's clients are not major manufacturers, movie stars or heirs of businesses, but everyday people like you and me. You can open a Swiss bank account with a deposit of only 5,000 Swiss francs. Swiss banks even offer accounts with no minimum balance.

No interest on money invested

Absolutely wrong! Just like any other bank, Swiss banks also have a variety of investment options such as mutual funds, stocks, bonds, commodity and derivatives investment etc. Swiss bankers are among the best finance managers in the world, so it comes as no surprise that they manage over 35 p[er cent of offshore holdings. Moreover, owing to a very consistent financial stability in Switzerland [ Images ], your money is much better handled here.

Swiss banks are financial havens for criminals

Nothing can beat this rumour. However, for people who are unaware, Swiss bank accounts have very stringent policies on who invests money in the bank. The vast majority of Swiss bank account holders are honest people who want to keep their savings in a country renowned for its stability. Swiss banks are extremely cautious regarding politicians who wish to open an account and they systematically refuse to accept any money that is of dubious origin.

Numbered accounts guarantee anonymity

There is nothing like anonymity in Swiss banking terminologies. On the other hand, there are very strict rules over client-banker confidentiality which ensures that the number of fraudulent transactions that can happen with your account are negligible. However, the identity details of numbered accounts are accessible, albeit only to the bank manager and a few select people.

Swiss bank accounts can only be opened in person

Just like any other international bank, Swiss bank accounts can be opened through correspondence as long as you comply with their opening procedures and provide the bank with the necessary documents. Moreover, all other banking facilities such as telephone banking, Internet banking, bank transfers and credit cards are available in the kitty of a Swiss bank's services.

Swiss bank accounts are very expensive to maintain

This is not true. Most of the Swiss bank accounts don't charge a cent in annual fees. Even if you would like additional services such as retained correspondence or numbered banking relations, the annual fees are very reasonable.

But why would anyone want to open a Swiss bank account if it is like any other?

Source: BankBazaar.com