What to do if you think you've been a victim of credit card fraud, and how to become more aware of credit card scams.
Australians lost $1.4 billion due to personal fraud in 2010-2011, according to the Australian Bureau of Statistics, and that number has no doubt risen in more recent years.
Consumers are using their credit cards more often to purchase everyday goods and services. While shoppers benefit from this convenience, scammers are taking advantage of technology to trick unsuspecting Australians.
The recent statistics show about 1.2 million people were victims of at least one incident of personal fraud in the 12 months prior to being surveyed.
The best way to protect yourself from scams is by understanding how they work and how to avoid them.
What is credit card fraud?
Credit card fraud involves the use of card details to make unauthorised purchases and/or withdrawing cash without the cardholder's consent. While it mostly refers to credit cards, it also extends to debit cards and pre-purchased store gift cards.
The most common types of fraud are when the card is not present (a transaction is completed quoting the card number over the phone, internet, via post or fax without the card being physically present), counterfeit cards, the card was not received (stolen from a mailbox) or application fraud.
More calculated methods are being utilised by thieves to take advantage of consumers. These include hacking into databases that hold customer information, sending phishing emails asking users to disclose credit card information, sending text messages offering prizes in return for personal details and more.
Related: The dangers of holidaying on credit
SCAMwatch from the ACCC advises Australians to be aware of warning signs that your credit card may have been scammed.
Unrecognisable transactions on your credit card statement or a lost credit card could be an indication of credit card fraud. If you have written your PIN on a slip of paper and this is now missing, this could also be a sign you have been scammed.
What to do if you think you've fallen victim to credit card fraud
Immediately inform your financial institution that you believe your card or PIN has been lost, stolen or compromised. This is extremely important because if you unreasonably delay reporting, you may not get your money back.
You can also report fraud and scams to a number of authorities to help prevent crime occurring in Australia. Contact the ACCC for interstate/overseas scams or if your bank or credit card account is targeted. The ATO handles scammers targeting your tax payments or details. For financial and investment scams, contact ASIC.
How to avoid credit card fraud and scams:
1. Don’t trust a person, business or organisation that requests for you to provide them with your credit card details over the phone, in a text message or via email or postal service.
2. Avoid using your card at risky places such as unsecure online stores (sites without a padlock icon in the URL box), markets and non-bank ATMs.
3. Never let your card leave your sight if you're paying in person. You don’t know whether the person will copy the magnetic strip or write down your card details, so self-defence and prevention is always your best protection.
4. Government website MoneySmart advises Australians to choose a PIN number that would be difficult for others to figure out.
Personally, I have SMS alerts set up so that if a transaction is higher than $1,000 my phone beeps to tell me!
Start your search for a secure credit card at Moneyhound now.
What's your best fraud avoiding tip? Comment and share your thoughts on our facebook page.
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