Axis Bank Faces Credit Card Crisis: Customers Alarmed by Unauthorized Transactions

Axis Bank, a prominent player in India’s private banking sector, is currently grappling with a surge of customer grievances surrounding unauthorized transactions on their credit cards. This unsettling development has sparked apprehensions regarding potential data breaches within the bank’s systems. However, Axis Bank has firmly refuted any such claims, attributing the incidents to isolated cases of fraud, according to a report by ET.

 

The issue came to the forefront when numerous holders of Axis Bank credit cards took to social media platforms, such as X (formerly Twitter), to voice their concerns about unauthorized transactions, including international purchases made without their consent. One user recounted receiving a fraudulent transaction alert from Uber Eats Canada, while others lamented facing technical glitches on the bank’s app that hindered their attempts to close their credit card accounts, as detailed in the report.

Despite the widespread outcry, Sanjeev Moghe, the head of cards and payments at Axis Bank, has maintained the stance that there has been “no data breach” on the bank’s end. He acknowledged that customers reported unauthorized transactions commencing on Tuesday evening, predominantly involving low-value purchases on e-commerce platforms. Nevertheless, he stressed that the scale of such transactions remained “very limited,” as reported by PTI.

Moghe clarified that on an average day, the bank observes credit card spending totaling approximately ₹500 crore. However, the unauthorized transactions represent only a minuscule fraction of this sum. “We’re talking about thousands and lakhs,” he noted, indicating that the incidents were confined to a single day and have since ceased, according to the PTI report.

According to Moghe’s explanation in the report, fraudsters managed to gain access to a restricted number of card numbers and paired them with corresponding expiry dates to execute unauthorized international transactions. These transactions could proceed without requiring additional authentication factors such as one-time passwords or CVV numbers.

Elaborating further, the bank official elucidated that the first six digits of a 16-digit card number are unique to the bank. Card numbers can potentially be compromised when customers use their cards at various establishments like petrol pumps or restaurants. However, Moghe clarified that he was not immediately aware of similar incidents affecting other banks.

In response to the alarming situation, Axis Bank has initiated measures to address the issue. This includes the replacement of credit cards for affected customers and the reimbursement of debited amounts. Additionally, the bank has informed the Reserve Bank of India (RBI) about the incidents and intends to implement strategies such as audits to prevent similar occurrences in the future.

Despite the reassurances from Axis Bank, the unauthorized transactions have triggered widespread concerns among customers regarding the security of their financial data and the bank’s capability to safeguard their interests. This incident serves as a stark reminder of the escalating threat posed by cybercrime and underscores the urgent need for robust security measures within the banking sector.

(With inputs from PTI)

Overall, Axis Bank’s handling of the situation reflects a proactive approach aimed at mitigating the impact of unauthorized transactions while assuring customers of its commitment to their security and well-being. However, the incident underscores the broader challenges faced by financial institutions in safeguarding against cyber threats in an increasingly digital landscape