Credit card fraud busters
Every year, criminals walk away with millions of dollars gained through credit card fraud. Protection starts with understanding the different types of fraud and how best to avoid them.
Fraud with no physical credit card
Card-not-present (CNP) fraud accounted for 85 percent of all illegal debit and credit card transactions in Australia in 2018, with losses close to $500 million.
It starts when criminals get hold of a cardholder’s details – name, address, card number, expiry date and the three-digit security card on the back. They can then use this information to make purchases where no-one needs to see the physical card, usually online or by phone.
One of the most common ways to acquire this information is by phishing – tricking you into clicking on a link in an email that introduces malware on to your computer. This can then collect and pass on your credit card information.
Skimming credit cards
“Skimming” is another common way of capturing your credit card details – it accounted for almost $20 million lost to crime in 2018. In this case, criminals attach a counterfeit card reader, called a skimmer, to a merchant’s terminal or an ATM. This collects data from the magnetic strip from every card as it’s swiped or inserted. There may also be a hidden camera nearby to capture your PIN.
If there are a few criminals working together, they could create multiple ‘clones’ or copies of your credit card and use these to make as many purchases as possible until they reach your credit limit or you report this activity. Some sell the information to other criminals. So be aware.
Skimming has become much more difficult since computer chips started to replace magnetic strips. However, criminals can be quick to adapt. A new process called shimming involves inserting a paper-thin shim into a card-reading slot to steal data from chips.
Other types of credit card fraud
Someone who finds or steals your credit card can use it in the usual way until they either reach your limit or it’s cancelled. This is one reason it’s vital you contact your credit card issuer the instant you realise it’s missing.
The other is that, while most credit card issuers are willing to cover the cost of illegal transactions, they’ll only do so under certain conditions – and prompt reporting is sure to be one of them.
In 2018, more than $55 million was lost to this kind of fraud. And more than $6 million was also lost to the fraud known as ‘card never arrived’. As the name suggests, this is when a thief intercepts a new credit card or steals it from a mailbox. If your mailbox doesn’t lock, be sure to check it regularly until your new credit card arrives.
Five ways to protect yourself from credit card fraud
#####Never give your credit card information over SMS or email
Received a dodgy text or email? Don’t hand out your credit card details at random.
#####Misplaced your credit card?
As soon as you’ve misplaced your card, get it put on hold or cancel. Also, check your statements for any unusual activity.
#####Check for credit card skimmers
If you ever use your credit card at an ATM, look for anything that’s loose or not quite the right colour. If something doesn't feel right, don’t use it. And watch carefully if a cashier takes your card to process so you can be sure they’re not slipping it through a skimmer as well.
#####Only make credit card purchases from secure websites
Check for the closed padlock symbol or a web address that starts with https:// rather than just http:// – both indicate a secure website. Companies providing complete contact details are also more likely to be secure.
#####So obvious but so important – never share your PIN and keep it in a safe place Basic but critical. Ensure you know where your credit card is and don’t tell anyone your PIN. Left it in your back jeans pocket? Make sure it’s returned to a safe place.
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