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How to avoid credit card fraud, traps and scams
Find out about the fraud protection and support you can get through your credit card, plus tips to help keep your details safe.
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Many Australians have been subject to credit card scams and online fraud. Data from the Australian Payments Network showed that card fraud was worth $447.2 million in the 12 months to 30 June 2020. Most of this happens 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.
You can use this guide to discover how you can protect your finances and what to do if you've been the victim of credit card fraud or a scam.
Ask an expert: What can people do to keep their credit card details safe online?
Mark Jones
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.
You can compare credit cards with a fraud protection guarantee on Finder.
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 make sure to 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 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.
Credit cards with refund protection
Credit cards with purchase protection
Images: Shutterstock
Ask an Expert
i contacted immigration service company & they charged me 1200 us, but i found that they are scammers. how master card company can help me returning the money.
Hi Alaa,
Thanks for your inquiry.
If you believe that you are a victim of a scam, you need to contact your credit card issuer immediately and explain your situation. It would also help if you can present your provider all the necessary documentation that will serve as a proof that you have been defrauded.
You can also file a complaint to the Australian Competition and Consumer Commission by securing a consumer complaint form online, or via phone.
Please refer to the links I have sent to your email for the complaint form and contact details of ACCC.
I hope this has helped.
Cheers,
Sally
How to find out the credit cards under my name?
Hi Antonia,
Thanks for your inquiry.
An individual’s credit cards will generate monthly statements sent to the user’s designated address. Credit inquiries can also be checked by requesting a copy of your credit file.
Cheers,
Jonathan
We found someone has been stealing money from our debit card. It is like $40 per week in average and this had been continuing for more than 3 months. It belongs to my partner’s account. We stopped the fraud by reporting it to the bank, ANZ. But bad news is the bank said they can only cover the losses up to 120 days in time from the day we reported. We are trying to look back to see WHEN this started and how. What made me upset is, when I looked into the transaction description, the online companies that made the scams are so many and under different names. How can this happen for so long time without being notified by the bank? Do we have the right to claim for our losses prior to the 120-day time?
Thank you very much for help.
Hi Erica, thanks for your inquiry.
The claims for losses from a fraud situation would be up to the lender/bank’s policies and lending criteria.
I hope this has helped.
Cheers,
Jonathan
Wow loads of good tips!
Is it legal for a restaurant to ask to hold my credit card until the end of the meal? I have offered my drivers’ license, but they want my card. I’ve said they can do a pre-authorisation, but refuse. They wont run a tab/bill without it, and some have min. purchase amounts to allow me to use a card. I’ve worked in the industry, Unless I have your card (in the safe), your card IS NOT SAFE! Is this legal under the new, amended CC laws in Australia?
I recently stayed at a hotel and had to give my credit card details. The receptionist photocopied my card. Is this legal? Two weeks later someone spent $1200 on my card.
Hi, Kate.
If you believe you’ve been defrauded, contact your lending institution as soon as possible.
Thanks for your question.
Hi I have been scammed by a friends of 5 years .we used to use each others cards so there were never any doubts that it was not his card but I used to lend him money and he would pay me back some in cash and the rest he would say just go up the shops and get some smokes etc. I’m worried that I have unknowingly used a stolen card. What do I do I have contacted the police and said I’m willing to help with what ever they need..?
Hi Jay,
Thanks for your comment.
Letting someone else use your credit card is against its terms of use; if you haven’t already please contact your bank and close the card.
Otherwise, you’ll need to let the police do their job and help them out as much as possible.
Cheers,
Shirley
Dear Sir or Madam,
I am currently undertaking a research on the behalf of international SOS about cardholder liability in the case of credit card theft or loss (fraud).
My research has the goal of gathering the same information for 54 different countries as regulations are different from country to country.
I would like to know if you could (if possible) help me with some information that I believe you possess and that is extremely hard to find elsewhere (relevant information is rare).
These questions are very simple and will only take a few seconds to answer:
– Is there fraud regulation issued by the government (for example forcing the banks to cover the cardholders)?
-If Yes what is the Limit? (in monetary units)
-Do the banks provide cover?
-Do Visa or Mastercard provide Cover?
-Do they cover when the PIN is used ?
Thank you very much for your attention to my case.
Best regards,
Hicham
Hi Hicham. Thanks for writing in to us.
a) Lenders and banks are not forced to do this – there are various codes and regulations which are voluntary to sign up to. The reason lenders are signatories is because it shows consumers that they can be trusted.
b) Banks themselves provide cover over consumers. ANZ Falcon is one such example.
c) Visa and MasterCard also have their own Zero Liability Guarantees – they will protect consumers in nearly all circumstances where the cardholder has taken reasonable steps to keep their information and details private and secure but has nevertheless been defrauded.
Jacob.