The Hindu : National : International credit card racket busted

Online edition of India's National Newspaper
Thursday, Apr 29, 2004

National

National

International credit card racket busted

By Marri Ramu

HYDERABAD, APRIL 28. The Hyderabad police today claimed to have busted a credit card racket allegedly being operated from various South East Asian countries and having ramifications on transactions conducted through credit cards across the world. Two Malaysians have been arrested in this connection.

An unidentified Indian accomplice of the detained duo, however, escaped from the Panjagutta police when they raided a lodge in Secunderabad acting on a tip-off on Tuesday night. The Malaysians reportedly confessed that they were part of an international gang, which withdrew crores of rupees and purchased goods with counterfeit credit cards across the country.

Their modus operandi was to copy the ``electronic code data'' (ECD) stored on the magnetic strip of the credit or debit or ATM card using a skimmer, which has special computer software, and re-encode the same on a fabricated card. The gangsters, police say, get hold of the genuine cards of unsuspecting travellers, by colluding with the staff of some hotels at tourist centres where customers present genuine cards. While swiping the card, the card is also `skimmed' for its data surreptitiously. The data copied is then stored onto another card. "In other words, a duplicate card is made using the stolen ECD from the magnetic strip. By using the fabricated card, members of the gang withdraw cash anywhere in the world if it's an international card," police sources said. The cards are used till the credit limit is reached within the shortest possible time and then discarded.

It is difficult for the banks to notice the fraud until the customer becomes suspicious after receiving bills for goods he never bought or bills for which he was never responsible and approaches the bank with a complaint. The mammoth number of credit card transactions all over the world — estimated to be between five and 10 million per day — makes it next to impossible to immediately detect the racket.

Investigators feel that several such gangs are operating from Malaysia. The Hyderabad police suspect that apart from the gang belonging to Malaysians, similar gangs are on the prowl in the city.

One such case was reported in Nallakunta station five days ago. Two persons withdrew Rs. 19.5 lakhs from the credit card machine at the Andhra Bank branch in Nallakunta using various credit cards.

One of the staffers grew suspicious on April 22 when Kumara Swamy alias Segaran withdrew Rs. 9.5 lakhs on that day. However, he disappeared when the staff sought identity documents from him, when he came to the bank in the afternoon to withdraw more cash.

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