Many Australians have been the victim of credit card scams and online fraud. Data from the Australian Payments Network showed that card fraud cost $447.2 million in the 2019/20 financial year. Most of this happened online through card-not-present (CNP) fraud, which made up the bulk of card fraud (87.7%).
Credit cards already offer zero liability policies that protect you against fraudulent charges (so you don't have to pay for them). Many cards also have fraud-monitoring software that detects suspicious activity. But there are also some strategies you can use to protect your account from fraud in the first place.
Ask an expert: What can people do to keep their credit card details safe online?
Cyber security expert
As the number of Australians choosing to shop online continues to increase, it's critical consumers are aware of the inherent risks involved and know how to protect their personal information. There are a number of things consumers must do to keep their credit card details safe when shopping online, including:
- Never storing your credit card details in the browser when prompted
- Never entering your credit card details on public use computers
- Never providing your credit card details via email
- Only entering credit card details on secure sites, identifiable by a locked padlock in the address bar
- Only buying online from retailers you know and trust by reviewing business details and online reviews
- Avoiding illegitimate websites flaunting deals that are too good to be true
Consumers must also educate themselves about common online threats. There is a wide range of free, educational resources and information available online that consumers can access, including the Stay Smart Online Program or the ACSC Alert Service.
Who do I contact if I suspect that my credit card has been used fraudulently?
Depending on your circumstances, you have a few options:
Contact your bank
If you spot suspicious activity on your credit card account, contact your card issuer immediately to freeze your account and resolve the issue. If you have the card handy, call the number that's printed on it to speak to a representative. You can also see a complete list of domestic and overseas contact numbers for the major Australian card issuers in this guide for more information.
Australian-issued cards are usually covered by Visa or Mastercard's Zero Liability agreements or American Express' credit card fraud protection, which means you'll be refunded any defrauded funds. However, terms and conditions will apply. For example, you may be required to report the issue within a set number of days.
Report it to the ACCC
If your account was compromised through a scam, you should also report the scam to the Australian Competition & Consumer Commission (ACCC) on 1300 300 630.
Contact the Australian Federal Police
You can see the relevant police contact number for your state below.
- ACT. 6131 3000
- NSW. 9286 4000
- NT. 8980 1300
- QLD. 3222 1222
- SA. 8416 2811
- TAS. 9607 7777
- VIC. 9607 7777
- WA. 9320 3444
How does credit card fraud work?
These are the types of credit card fraud that you should watch out for and how they work:
- Card-not-present fraud. This involves your card details being used to make online and over-the-phone transactions, where there is no need for a physical card, a PIN or a signature.
- Counterfeit card fraud. Fraudsters can use your credit card data to make a counterfeit card. They can get your data through a method called skimming or can buy it from black markets.
- Not-received fraud. This is when someone accesses your card before you do, such as through your mailbox when you've applied for a new card.
- Application fraud. In this case, someone might apply for a credit card in your name, using your personal details and then use it to make purchases and cash advances. This is often linked to further identity theft issues, as they would need to be able to provide enough documentation to actually get approved for a card in your name.
6 tips for avoiding credit card fraud
Credit card fraud can come in many forms, so here are some of the strategies you should use to protect your account.
1. Keep your credit card secure
Always cover your card when entering your PIN at the checkout or when withdrawing cash from an ATM. If you've lost your credit card, contact your bank immediately to cancel the card and get a new one issued as soon as possible.
2. Regularly review your statement
As well as keeping track of your spending, it's wise to regularly check your credit card statement to stay on top of any suspicious behaviour. This is relatively easy to do if you're using Internet banking or an app.
Although your bank will usually contact you if they spot suspicious transactions on your account (such as a large or overseas transaction), you may catch a fraudster early if you're reviewing your statement. This is because they may test your account first by making a small transaction (at either a domestic business or one overseas) before making a big purchase. The sooner you spot any odd listings on your account and report them to your bank, the better.
3. Check your credit report
As well as your credit card statement, you should also monitor your financial history through your credit report. If you see any listings (such as applications) that you didn't make, contact the relevant card issuer and the credit reporting bureau immediately to investigate the issue and have it removed from your report.
You can get a free copy of your Experian credit report and score through Finder to get started.
4. Use secure websites
When you're shopping online, look for https:// at the beginning of the website address instead of http://. This means that the website has added security and you're less likely to be a victim of fraud.
You should also look at the website's reviews to see if there is any evidence of negative feedback or poor reviews of products. If an item is offered for considerably less than the online retail price, you should also be wary as it's likely to be a scam.
When you're using your credit card online, you could also consider using encrypted services such as PayPal which allow you to shop without sharing your financial details with the website.
5. Be wary of suspicious emails, text messages and calls
The correspondence will vary, but a scam email or text message could be asking you to update your details, reporting an overdue account or flagging a fraudulent transaction. Messages claiming you've won a prize or competition are also common. So be extra cautious if you haven't entered a competition and don't provide your personal details to an unfamiliar caller or in response to an unexpected text message.
If you receive an email or text message that appears to be from your bank, always check the phone number and address that it's from before responding. Don't click on any links or download any attachments from any email. If you're suspicious, don't respond and contact your card issuer directly via the contact number listed on their website instead.
Other tell-tale signs of a phishing email include addressing the email to "customer" rather than your full name, spelling and grammatical errors, odd symbols and incorrect logos. If you suspect these are suspicious, you can report it to the ACCC, mark it as spam and block the email or contact number.
If you receive a call from someone who claims to be your bank and asks you to confirm your card information, don't provide any information. Instead, contact your bank directly using the contact details listed on their website to find out if it was a legitimate call. You should be especially careful if the call is from an international or blocked number.
6. Notify your bank if your address or contact details change
If your residential details change, contact your bank to have your details updated so that any new cards or bank statements aren't sent to your old address. You should also update your contact information if it changes so that your bank can contact you regarding a potentially fraudulent transaction on your account.
Credit card security features
- Chip technology. The microchip that is embedded in your credit card encrypts the sensitive data that's needed to make in-person payments. Compared to cards that only have a magnetic stripe, this technology makes it harder for the card to be copied or counterfeited. However, you do need to insert the card for transactions in order to get the full benefits of the chip technology.
- Contactless security. Every time you tap and pay with your Mastercard, encryption protects your transaction data. This encryption is unique for each transaction and also helps protect your contactless mobile payments. The fact that you can tap to pay without handing over your card also makes it difficult for the card to be skimmed or copied.
- Mastercard SecureCode and Visa Secure. These services give you added security for online purchases. Mastercard SecureCode and Visa Secure are not available on every credit card, but when they are, you will be sent a verification code (usually via SMS), asked a security question or prompted to enter a pre-chosen password before the payment is processed. This step helps verify that you are making the purchase and also reduces the risk of unauthorised transactions.
- Tokenisation. While chip technology encrypts your card data for in-person transactions, tokenisation offers a similar type of security for online transactions. This technology replaces your credit card's 16-digit number with a unique alternate number that's known as a "token". Put another way: when tokenisation is used, your card's details cannot be stored, hacked or compromised. Tokenisation can be used for online transactions, in-app purchases and in-person mobile payments.
Other credit card security features
Depending on your bank or provider, you could also have some access to a range of other credit card security features, including:
- Physical card details. Your unique credit card number, three-digit CVV security code, signature panel, hologram and account name on the card all combine to help keep it secure. The CVV, in particular, adds a layer of security to online transactions.
- Expiry date. Credit cards expire at regular intervals so as to reduce the risk of fraud. When your card expires, a new card is sent to you with updated details, including a new card number and expiry date.
- Fraud monitoring services. Many card providers have specialised teams dedicated to monitoring cardholder activity for fraud, and any irregular transactions are immediately detected and investigated. This is why you may sometimes receive a call or text from your card company to verify that it was you who made a transaction.
- Chargebacks. Chargebacks can be requested if a transaction has been fraudulent, processed in error (e.g. processed twice at checkout), or if the purchased goods were not received. In these instances, your card provider may initiate a dispute with a merchant to reverse the transaction.
- Online and mobile account security. Internet and mobile banking services all offer security features to help keep your card and other accounts safe. This usually includes:
- Automatic logout if your account is idle, which helps stop anyone else from making changes.
- Authorisation codes to confirm any transactions or major account changes. These are usually sent as a text to your phone.
- Details of your account activity, including when you last logged in.
- Alerts of unusual activity, for example, logging in from a new device.
How does a credit card fraud protection guarantee work?
Also known as "zero liability", this security feature protects you against the loss of money from fraudulent transactions. To get your money back after fraud, you'll need to report any unauthorised transactions to your credit card provider as soon as possible. They will then investigate the charges to confirm that the activities are fraudulent.
Each credit card provider has slightly different processes around fraud and they are outlined in your credit card terms and conditions. But generally, you'll need to meet the following conditions:
- Sign your card. You'll need to fill out the signature panel on your credit card to get protection against fraudulent transactions. Signing your card also shows that you agree to the account's terms and conditions, which is required before you can access features such as fraud protection.
- Keep your PIN safe. If you share your PIN with someone else and they use your account, it usually won't be counted as a fraudulent transaction. That means you're unlikely to be refunded through a fraud protection guarantee and may have to find another way to get the money back.
- Contact your credit card provider immediately. As soon as you suspect your card is compromised, call your credit card provider and let them know so they can help you through the situation.
- Provide any further details as required. Sometimes, your credit card provider may ask you to fill out additional forms while they are investigating the fraud. When that's the case, make sure you give them as much information as you can and respond as quickly as possible to help speed up the process.
When will I get my money back from fraud?
The time it takes to get your money back after fraud varies between credit card providers. It can also depend on the type of fraud.
So in some cases, you could be refunded within 7 to 21 working days, while in others it may take longer than that to get your money back. If you want to know more, check with your credit card provider to find out how the process works and what you can do to resolve fraudulent charges as quickly as possible.
Credit card fraud can be an overwhelming experience, but it's important to remain calm and contact your card issuer as soon as possible. For an example, check out how Amy Bradney-George (one of Finder's credit card experts) kept her cool as well as what she learned when she was subject to credit card fraud.
How to spot a fake credit card
If you're working somewhere and are worried about someone using a fake credit card, keep an eye out for these potential signs someone is trying to use a fraudulent credit card.
- Signature panel. Legally, credit cards must have a signature panel that is signed. However, some people choose not to sign their card, so it's not always a sign of fraud. But if you doubt the validity based on the signature, ask for a form of photo ID and check that the name on it matches the one on the card.
- Uneven numbers on the card. Even if the numbers are embossed, check to see if they are printed in a straight line. Crooked numbers could indicate it's a badly printed fake.
- Scratched or defaced cards. If the front of the card is beaten up so you can't check details such as the name, or if the signature panel is scratched away, it's safer not to accept a payment. Explain that you can't accept the card in that condition and suggest the person use another payment option.
- Expiry date. Check that the card has a valid expiry date and note how long it is valid. Generally, cards usually expire around 3 to 5 years from the date they were issued. So, for example, if a card issued in 2021 showed an expiry date in 2031, you could question its legitimacy.
What should I do if I think someone is paying with a fraudulent card?
If you spot a card that looks suspicious, you don't have to accept it for the payment. Remain calm and explain to the person that the card won't be accepted.
If there are visible signs of tampering, you could also call the company or bank that has issued the card and ask them to confirm it is valid. If you feel anxious or threatened, call your manager, a security officer or your local police station.
Compare credit cards with a fraud protection guarantee
Every Visa, Mastercard and American Express have fraud protection guarantees. If we listed them all, you'd be looking at about 270 cards here. So we've taken our best credit cards and listed them here to help you narrow down your options.