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Credit card security measures
Worried about credit card fraud? Find out about the security features available to keep your money safe.
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The popularity of credit cards has led to an increase in credit card theft and fraud, both in Australia and overseas. According to data from the Australian Payments Clearing Association (APCA), there was $437.8 million worth of fraud on Australian-issued scheme credit, debit and charge cards in 2015. APCA says this data also shows card fraud increased from 58.8 cents in 2014 to 66.8 cents per $1,000 spent, driven by a 21% increase in card-not-present (CNP) fraud.
To help protect credit card customers from these issues, banks and card schemes around the world have poured millions of dollars into technology, services and other resources. Here, we look at the range of credit card security measures currently available and how they work to keep your accounts safe.
Chip-and-PIN technology
This is now a standard feature on credit cards and most debit cards. The first part of this line of protection is the embedded chip found on the front of the card. Your card details are stored as encrypted data on this chip, so it is difficult for a criminal to steal your information when you make a payment in person.
The second line of defence with this technology is the use of PIN-verification for transactions. This is where a PIN or Personal Identification Number is used to authorise a transaction, whether it be a purchase or a refund. Your PIN is usually four or six digits long and is a more secure way of paying than a signature, which can be copied by criminals and used to fraudulently authorise payments. According to APCA, this technology, along with closer co-operation between financial institutions and law enforcement teams, has helped reduce counterfeit fraud by 10% between 2014 and 2015.
Fraud detection and monitoring
Many lenders now make use of fraud-monitoring services, such as FICO's Falcon anti-fraud software. This adaptive software uses pattern recognition to analyse your account and detect any unusual transactions.
For example, if a credit card was used once in Sydney at 8am, and then again at a store in Los Angeles at 12pm, the account would be flagged for suspicious activity. An anti-fraud team member would then contact the credit card account holder to verify the transactions or take further action as needed.
Fraud detection and monitoring services also consider different spending patterns. For instance, let's say a customer regularly spends $100 a week on petrol and $100 a week on groceries. If there is suddenly a transaction for $10,000 worth of laptops, the team will mark it as "suspicious" and take credit card security measures such as contacting the cardholder and blocking or even cancelling the card.
Internet banking security measures
There are several layers of security when you want to use your credit card online. These include:
- Automatic logout. If you leave your Internet banking account idle for too long, you'll be logged out to prevent anyone near your computer from making money transfers or payments.
- SMS code. To help verify transactions or Internet banking account activity, you may be sent an SMS with a unique code that you must enter to authorise your transaction. Some credit card companies use SMS codes to verify Internet banking account activity or online transactions.
- Time of last logon. Many Internet banking platforms will show you the last time you logged on. This can help you detect any criminal activity (i.e. someone else logging onto your account).
ATM anti-skimming devices
ATM skimming refers to the process where someone illegally copies your credit card information so they can access your account. Today, many ATMs have safeguards against this. These include:
- PIN-pad covers so cameras can't be used to capture your PIN being entered
- Internal anti-skimming devices which notify a bank when a card skimmer is installed on an ATM and block the skimmer from transmitting information
- Anti-skimming inserts which are added into the card reader slot and prevent skimming devices from being added to the ATM
Online shopping protection
Mastercard and Visa both provide optional services that can help protect your card when shopping online. We've outlined the key details below:
Mastercard SecureCode
This optional service allows you to setting a unique SecureCode for your Mastercard credit card. When you shop at a participating store or retailer, you'll be prompted to enter in your SecureCode before the transaction is processed. This extra level of verification can reducing the chance of a criminal using your details to pay for an item.
Verified by Visa
Verified by Visa works in a similar way to Mastercard SecureCode. You set up your verification method and then when you shop at a participating store online, your card will be recognised and you'll have to verify your transaction details before the payment can be processed.
Encryption protection
Most shopping sites and Internet banking services are protected by encryption protocols such as Secure Sockets Layer (SSL) technology. This basically protects your data – including your credit card number and other personal information – from being accessed by third-parties.
You can easily tell if a site is secured in two ways. If the URL of the site begins with 'https', or if there's a lock somewhere in the window of the browser which displays security details then the site is secure. Look below to see how this might look on different browsers.
Mozilla Firefox
Google Chrome
Safari
What can you do to protect yourself?
Even with all the protection provided for you by credit card companies, retailers and law enforcement agencies it's still possible to find yourself on the receiving end of credit card fraud. This is why it's so important to safeguard your credit card. You can do this by following the below points.
- Be selective with where you shop. One of the first things you should do is be very careful about when and where you use your credit card. If you're using it in-person at a store or restaurant, always keep it in sight, and if you're paying with plastic online, check the security of the website before entering your details. Never use your card if you feel something is suspicious.
- Protect your devices. Most card-not-present (CNP) fraud occurs on the Internet, so it's important to make sure you have suitable firewall and antivirus protection on your computer and other smart devices to protect yourself against hacking and identity theft.
- Only bank or shop with a secure Internet connection. Never use a public computer or open Wi-Fi service to access your Internet banking account or to shop online. These services can be compromised by criminals looking to steal your data.
- Protect your PIN number. Your PIN should not be shared with anyone. Aim to memorise it as soon as possible and always cover the keypad when you enter it to complete a transaction in-store or at an ATM.
- Protect your credit card information. Keep track of when a new card is due to arrive in the mail to avoid letterbox theft. As soon as you receive your card, sign the panel on the back. This verifies you as the account holder and also activates the zero liability policy that helps protect you against fraudulent transactions. When your card expires, cut it up before disposing of it so that no one can steal the details on it.
- Don't share your card details. Some criminals run scams where they call or email you asking for your card details. If you ever receive any communication where you're prompted to provide this information, contact your credit card issuer or the company in question directly (via their official phone number) to find out if they contacted you and why.
- Check your account balance and statements. Check your account balance on a regular basis. Look for any suspicious activity on your account, and get in touch with your credit card provider immediately if you see anything that doesn't seem right.
If you follow these credit card security tips you will have a much better advantage in the fight against card fraud. Shopping can be an enjoyable if you use the right security tips to keep you safe.
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