Credit card fraud and scams: how to protect yourself

Scammers are becoming far more sophisticated in today’s digital age, using misleading and fraudulent methods to obtain your private financial information and access your money.

There are things you can do to better protect yourself against potential scams as well as helpful steps to follow if you notice suspicious charges on your credit card.

Credit card fraud is when your credit card is fraudulently used either through the theft of your physical credit card or through the theft of the cardholder’s private financial information and personal details.

This can be done in a few ways such as actual physical theft, phishing scams, identity or mail theft and more.

Credit card theft can take place in a variety of ways and scammers don't necessarily need your card physically in their hands to do it. They may just need some key personal financial information.

Some of the common ways in which your credit card information can be stolen include:

These are fake emails designed to look like emails from a contact you might trust such as your bank, internet service provider, an online retailer, utility company or any service where you might pay regularly using your credit or bank card.

Typically, these emails will request you to update your personal or credit card details using a link in the email. They may suggest your account has been blocked or that fraudulent activity has taken place on your account, and your account has been frozen until you provide or confirm your personal information.

Some of these phishing scams are very clever, using the correct company logos and email addresses that are similar to authentic emails from a legitimate business. However, clicking the link provided may often take you to a separate website where once you voluntarily enter your card information, it’s sent to fraudsters. It’s best to avoid clicking any links from an email you think might be suspicious.

Consider also checking the email address it was sent from. If the email address doesn't match the company name or uses a free email service such as Google or Hotmail, it’s probably not legitimate. You can also look for spelling mistakes, incorrect grammar or information that isn’t quite right. If the email has an attachment such as a pdf or a ZIP file, never open the file. This could be a harmful virus designed to locate financial information stored on your computer.

It’s important to be aware that legitimate organisations are unlikely to ask you to provide your PIN or password, or provide details over email. Never click links in an email that ask you to update your personal or credit card information. If in doubt or the email looks suspicious, it’s always wise to go directly to the organisation's website, check your account information or call the organisation to see if it is legitimate.

This type of scam is also now being done via phone where a fraudster poses as a representative asking for your information over the phone. If the call comes from a suspicious mobile or an international phone number, or if the caller asks for your personal information or payment over the phone, hang up immediately. You can always contact the organisation directly to confirm the call and that your information is up to date.

Card skimmers are small electronic devices fitted to ATMs that can steal your credit card and PINs. Sometimes skimmers can also be handheld or used with a smartphone. This information can then be stolen and used online or to create a counterfeit card by cloning your card.

Minimise your risk of card skimming by having a look at the ATM to see if the card reader looks different and always use your hand to cover your PIN as you type. You can also opt to use a tap and pay system rather than inserting your card or swiping the magnetic strip.

Opportunistic thieves can pick-pocket your card or steal a new or replacement card from an unsecured mailbox. If you’re expecting a new or replacement card and your mailbox doesn’t lock, you can always ask to collect the card from your nearest banking branch or invest in a secure post office box.

Scammers are quite good at finding ways to steal your details and your dollars. By following these simple steps, you can better protect yourself from credit card scams.

Never provide this information over the phone or via a link in an email to anyone no matter how official the email or phone may seem. It’s also important to choose a PIN that isn’t easily guessed such as your birthday, anniversary, your address or a consecutive number. It’s also wise to use different PINs for different cards such as your everyday banking card and a credit card or the code to unlock your phone. Frequently changing your passwords is another action you can take.

If you shop online or use internet/online banking, you might consider running a quality virus or spyware program on your computer to ensure harmful files aren’t present. Viruses and spyware can infiltrate your computer via general web browsing, shopping online via unsecured eCommerce websites and downloading infected files.

Many financial institutions will offer you the option of cancelling your card altogether or putting a temporary lock on the card so that it can’t be used until you find it. If you find it somewhere it was unlikely to have been used, say in a jacket or pants pocket, you might simply unlock it.

It’s wise to regularly check your statements for charges that simply don’t make sense. Sometimes scammers rely on making a series of smaller charges rather than one huge lump charge, hoping it’ll go unnoticed longer. For example, several charges for less than $30 are more likely to go unquestioned than a $300 charge might. Keep an eye out for minimal deposits or withdrawals such as $0.01 or $1.00 as these could be small amounts to ‘test’ your card. Also, pay attention to unusual transactions from other countries.

Your identity and personal information are incredibly valuable to thieves. You can help protect it by destroying any printed material that might have your details on it including your address, birth date, tax information, superannuation information and the like. Ideally, shred them so the information can’t be used illegally.

If your credit card is stolen, lost or you detect suspicious activity on your credit card, it’s vital to contact your issuing financial institution as soon as possible. They are in the best position to help you hold or freeze your account so scammers can’t use it. They can issue you a new card and, in some cases, may be able to assist in reimbursing you for the charges that were fraudulently made.

If you suspect you’ve been a victim of credit card fraud or your credit or bank card has been stolen, contact the financial institution that issued the card immediately. The quicker you act, the better position you may be in to stop the card from being used further without your consent.

You can also report scams to the Australian Competition and Consumer Commission (ACCC), contact your local consumer protection agency and reach out to a counselling or support service.