Credit card holders warned: don’t be fooled by false sense of security
- Signatures for credit card verification banned from tomorrow but will it stop thieves?
- Credit card fraud more than doubled in past 5 years to almost $304 MILLION
- creditcardfinder.com.au tips for cardholders
July 31, 2014, SYDNEY – Australia’s biggest credit card comparison website creditcardfinder.com.au is warning credit card holders against a false sense of security, following an increase in credit card fraud over the past five years.
As of August 1, 2014, signatures will not be an accepted verification method for credit card transactions in Australia, in an effort to reduce credit card fraud.
According to a new investigation by creditcardfinder.com.au analysing data from the Australian Payments Clearing Association (APCA), credit card fraud has more than doubled (107 percent) in total value over the past five years, from $146.7 million in 2008 to $303.8 million in 2013.
Furthermore, the number of fraudulent credit card transactions has almost tripled (274 percent) over the same period, from 412,568 in 2008 to over 1.5 million in 2013.
The value per fraudulent credit card transaction fell over the past five years, from $356 in 2008 to $197 in 2013.
creditcardfinder.com.au's analysis of credit card fraud in Australia, 2008-2013
|No. of fraudulent credit card|
|Value of fraudulent credit card|
source: creditcardfinder.com.au, APCA
Michelle Hutchison, Money Expert at creditcardfinder.com.au, said that while the removal of signatures is a step in the right direction, it may not have a significant impact on reducing credit card fraud.
“Australia’s credit card industry is moving in the right direction to make it safer and more affordable for consumers. However, our research shows that removing credit card signatures will do little to reduce credit card fraud.
“In fact, a survey by creditcardfinder.com.au of 1,273 respondents across Australia in June found that almost nine in 10 credit card holders (87 percent) know their credit card PIN. That’s about one million credit card holders who didn’t know their PIN, while almost seven million cardholders already know them.
“It’s likely that these cardholders are already making transactions with their PINs and with the introduction of contactless payments last year, many are not using their signature or PIN for transactions under $100.
"Credit card fraud in Australia is a serious issue, with almost every fraud transaction last year from credit cards. If you’re a cardholder, don’t be fooled by a false sense of security because signatures are removed. It’s up to you to ensure you are taking the necessary precautions to keep your credit card and personal information safe.”
Summary of results from the creditcardfinder.com.au survey:
- Almost 9 in 10 cardholders (87%) know their PIN – that’s about 7 million cardholders, compared to about 1 million cardholders who didn’t know their PIN
- Slightly fewer women were aware of their credit card PINs than men, with 89% of men who know their PINs compared with 87 percent of women
- Baby boomers (aged 55-74) were more likely to know their credit card PINs than any other age group, while Gen Y (aged 18-34) were the least likely.
- State by state:
- Western Australian cardholders were the best at remembering their credit card PINs, with 94% saying they do, followed by 89% for both Tasmanians and South Australians
- While New South Wales cardholders were the worst, with 85% knowing their PINs, followed by 86% of Queensland cardholders and 87% of Victorians.
creditcardfinder.com.au’s tips for credit card holders:
- Know your PIN: With the implementation of ‘no signature’ rules being enforced from August 1 this year, it’s crucial to know your PIN and other key information about your credit card to ensure you can continue to use your card. Ask your provider to find out and some allow you to change your PIN online.
- Continually review your statements: Although new measures are forecast to decrease fraudulent activity and unnecessary charges, regularly reviewing your accounts is the best way to monitor fraudulent transactions and know exactly how much you are spending. Check your receipts after you make a transaction because fees and charges are often outlined separately.
- Assess your spending habits: Assessing your spending habits and your ‘danger spending zones’ is the first step to making better financial decisions. While you could be saving money by avoiding fees and charges, it might not make much difference if you’re spending unnecessarily.
- Be aware of unnecessary fees: With the Reserve Bank cracking down on surcharge fees, some merchants may try to offset any loss by implementing new fees or charges for their services. This is especially the case in hospitality or transport, so spending a few minutes reviewing payment policies before you commit to a service is recommended. Alternatively, paying by cash means you won’t have to worry about any additional card fees or expenses.
For further information
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.
finder.com.au is Australia's most visited comparison website and has helped over 4.8 million Australians find better credit cards, home loans, life insurance, shopping deals and more since 2006. finder.com.au compares 250 credit and debit cards from 31 providers, over 300 home loan products, and information from 13 life insurance providers as well as online shopping promo codes, mobile phone plans, travel insurance and more. One Australian every five minutes is using finder.com.au to find better (Source: Google Analytics).