Credit card skimming is a form of card theft where criminals use a small device (or "skimmer") to steal your credit card information from legitimate places of business. These skimming devices can be attached to ATMs or designed to look like a proper card reader.
According to data from the Australian Payments Clearing Association (APCA), counterfeit and skimming fraud in Australia cost just over $2.3 million in the 2021 financial year. Including counterfeit and skimming fraud for Australian-issued cards overseas, the total cost was more than $6 million.
While the bulk of credit card fraud is related to online card theft, it is still a major issue for Australians at home and overseas.
Here, we look at this type of fraud and what you can do to protect yourself against it.
Credit card skimming devices can be designed to look like hardware on an existing ATM or like a regular, in-store card reader (for example, an EFTPOS machine). When a credit card is processed through one of these devices, it can capture the details stored on the card’s magnetic strip.
Skimming thieves will later return to download the stolen data of the
people who’ve used the tampered ATM or in-store device. With that data, they can create counterfeit clone credit cards or even directly steal money from bank accounts.
It’s worth noting that chip-and-PIN cards are more secure against this type of fraud, as the information stored on the embedded microchip is encrypted. But as these cards also have magnetic strips, there is still some risk of skimming, particularly overseas where chip-and-PIN technology may not be as widely used.
Being aware of what to look out for and paying attention to the key signs of skimming can help in the following situations:
Although these default credit card features are important, doing your part and staying vigilant will save you more trouble. Look out for suspicious activity and always report it immediately.
There is support out there for victims of counterfeit and skimming fraud. The first thing you should do is speak to your bank so it can put the necessary steps in place to prevent any fraudulent activity from taking place. It may also be able to recover funds thanks to the zero liability polices in place.
You should also contact the police in your state, as well as report the scam to the ACCC. There is counselling support available too.
Every Visa, Mastercard and American Express card has 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.
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