Many Australians have been the victim of credit card scams and online fraud. Finder research shows that Australians lost $1.01 billion to debit and credit card fraud in the 12 months to September 2022 – equivalent to around $299 per person.
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 still 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 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.
What do I do if my credit card has been used fraudulently?
Contact your bank
Your bank can freeze the account and investigate the issue, so call them as soon as you suspect your card has been compromised.
If you have the card handy, call the number that's printed on it to speak to a representative. You can also find a complete list of domestic and overseas contact numbers for the major Australian card issuers on Finder.
Many banks also offer a temporary lock feature in their app - you can freeze the account and then if you find the card, you can reactivate it.
Report scams to the ACCC
You can report a scam to the Australian Competition and Consumer Commission (ACCC) by filling in a short form on the Scamwatch website. While this may not help you personally, it will notify the watchdog about the scam and potentially help others to avoid it.
You can also call the ACCC consumer info line on 1300 302 502 if you want to talk to someone.
Contact the police
Call 131 444, or check the relevant police contact number for your state below.
- ACT. (02) 6131 3000
- NSW. (02) 9286 4000
- NT. (08) 8980 1300
- QLD. (07) 3222 1222
- SA. (08) 8416 2811
- TAS. (03) 9607 7777
- VIC. (03) 9607 7777
- WA. (08) 9320 3444
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 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 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.
Credit card security features
- Chip technology. The microchip embedded in your credit card encrypts the sensitive data that's needed to make in-person payments. It 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 helps protect your contactless mobile payments. Being able to tap and 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. For cards and businesses that use Mastercard SecureCode and Visa Secure you will either 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.
- 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 known as a "token". When tokenisation is used your card's details cannot be stored, hacked or compromised. It 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 access to a range of other security features, including:
- Physical card details. Your unique credit card number, 3-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 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. Any irregular transactions are immediately detected and investigated. You may receive a call or text from your card company to verify 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 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. It will then investigate the charges to confirm the activities are fraudulent.
Each credit card provider has slightly different processes around fraud. They are outlined in your credit card terms and conditions. Generally, you'll need to meet the following conditions:
- Sign your card. Fill out the signature panel on the back of your credit card to get protection against fraudulent transactions. This 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.
In some cases, you could be refunded within 7 to 21 working days, while in others it may take longer 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.
Compare credit cards with a fraud protection guarantee
Every Visa, Mastercard and American Express has a fraud protection guarantee. 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.
5 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
This one is obvious, but know where your card is at all times. Always cover the terminal when entering your PIN and if you've lost your credit card, contact your bank immediately.
2. Regularly review your statement
Although your bank will usually contact you if it spots suspicious transactions on your account (such as a large or overseas transaction), you may catch a fraudster early if you're reviewing your statement. Fraudsters may test your account first by making a small transaction: the sooner you spot any odd listings on your account and report them to your bank, the better.
3. Check 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 shopping online look for https:// (notice the 's') at the beginning of the website address instead of http://. This means the website has added security. Check if there are any negative customer reviews or if items are considerably less than the normal online retail price. You could also consider paying through 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
Suspicious communications will vary, so be vigilant. Don't click links or download attachments unless you are 100% confident of who it's from, never provide your personal details over the phone or via text, and check the contact info to verify the sender (particularly with international numbers).
Look out for spelling/grammatical errors, incorrect logos and odd phrasing. If you're suspicious of anything supposedly coming from your bank, contact it through the details on its website.
How to spot a fake credit card
If you're worried about someone using a fake credit card, keep an eye out for these potential signs:
- 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.
- 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.