Avoid credit card fraud

In the eyes of scammers and thieves, credit cards are the holy grail. Here’s what you should know to avoid becoming the next victim.

Data from the Australian Payments Network shows that over the last few years, credit card fraud grew by 4.8 per cent to $565 million – more than five times the amount lost to other scams put together.

Credit card fraud, by definition, is the fraudulent use of a credit card through the theft of the cardholder’s personal details. Thanks to the invention of the internet and the endless supply of ecommerce sites that came with it, credit card scammers now have an easier time than ever pinching your details.

Here are two of the most common types of credit card fraud, according to the Australian Payments Network (AusPayNet), plus how you can spot them and what you can do if you’re caught.

1.Credit card not present (CNP) fraud

‘Card not present’ fraud occurs without the use of the physical card, mainly online or over the phone. 

Card not present transactions are becoming more and more popular as customers turn away from using their physical cards and simply enter their details to make a purchase. For example, an online purchase made ordering something on eBay is a CNP purchase, even if you’ve still read your details off the card. To be considered ‘card present’, the card details has to be captured at the point of sale, such as being pressed into a contactless reader, inserted into a merchant’s terminal or used at an ATM.

CNP fraud is the biggest contributor to overall credit card fraud, accounting for 85 per cent of all fraud on Australian cards (this also includes debit cards). It increased in size by nearly eight per cent over June 2017–18 and occurs mainly when credit card details are stolen to make purchases.

“Combating CNP fraud is now a key priority across the entire ecommerce community, and we’re delighted with the strong progress made this year on a framework for mitigating CNP fraud. We expect this whole of industry approach will help reduce CNP fraud, in the same way chip technology is tackling skimming fraud,” said Dr Fourie.

“Malware and phishing attacks are becoming increasingly sophisticated, so treat unsolicited emails and text messages from people you don’t know with suspicion. Don’t click on the link provided and don’t be tricked into divulging confidential data such as your password.”

So, be careful with those credit card details online and don’t speak too loudly when reading them out over the phone. In fact, just be careful about who you allow to read the back of your card in general, since thieves are having an absolute field day with our details online. Once they have your card details, they may be able to spend to their heart’s content until:

• They hit your credit card
• Your account runs out of money
• You contact your bank and tell them to cancel the card ASAP.

Some credit card providers can detect suspicious activity on your credit card (e.g. a few multi-thousand-dollar transactions are suddenly being made in Lagos) and may temporarily suspend the card until you confirm whether the activity is really you. This can be a pain when using the card while you’re travelling overseas, but so long as you inform your credit card provider of your travel plans beforehand, you shouldn’t trigger any unnecessary card suspensions.

2.Counterfeit & skimming fraud

Counterfeit and skimming frauds are those that occur when details are illegally taken to create a counterfeit credit card.

‘Skimming’ is when a device steals the details of your credit card from its magnetic stripe and commonly occurs when a device, known as a credit card skimmer, is attached to either an ATM or a merchant’s terminal. Skimming can also occur when someone brushes past you with a credit card skimmer. Details obtained via skimming can then be used to create a counterfeit card or to take part in some good old CNP fraud.

That near $15 million figure ($23 million when you take overseas fraud into account) might seem like a lot but has actually fallen significantly in recent years thanks to increasingly advanced protection offered by chip technology. In the 2018-19 financial year, skimming fraud fell from $42.3 million to $23 million – a record low – and only accounts for four per cent of all card fraud now. This is a credit to Australian chip-protection technology, which is among the best in the world. Keep your card well within the confines of your wallet or purse, and if an ATM looks like it has been tampered with, report it and move on.

Skimming is also different from phishing, which is when you hand your card details over to someone under the guise of someone or something else. For example, a common phishing scam is when someone creates a fake company that looks like a real one (let’s say Commonwealth Bank instead of Commonwealth Bank) and sends an email asking for card details. These phishers will often have extremely similar (or even the same) logos as existing companies with similar URLs to boot, so they can be easy to fall victim to.

According to Scamwatch, phishing is the most common kind of fraud in the country, with just under 25,000 reports occurring in 2018.

Please note:
The above article is provided for information purposes only. Please consult a registered Health Professional to discuss anything further related to any concerns.