Getting stung from a Credit Card scam hurts! Imagine opening up your statement one day only to find a large purchase for a car you did not make. How much anger would you feel? You could just imagine that smug looking fraudster driving out of the car yard laughing at the new car you just bought them…
According to the Australian Payments and Clearing association, there was almost 800,000 fraudulent credit card, debit card or charge card transactions within Australia last year totalling to around $157 million. This is no small change and no one wants to be a victim. Having worked in Banking in various jobs, I put this article together based on my own knowledge and a little research. If you are aware of the scams fraudsters use and follow some of the tips presented here there should be a lot less chance of getting stung. If by chance you do one day become a victim of an unauthorized fraudulent transaction luckily most credit card providers like American Express have credit card protection which will refund you the amount so your not out of pocket, although its best to avoid getting defrauded if you can…since it’s an unhappy experience. Check out their guide to credit card protection for an American Express card.
How do People commit Credit Card Fraud
According to the Queensland Police, the most common ways people commit credit card fraud is by using credit card details they have stolen to make a purchase on the Internet or by Telephone. These details are most commonly acquired through some of the following methods:
Theft of the Card
Your card could be stolen from your wallet, or you could have your details written on a piece of paper which is then stolen. It doesn’t necessarily need to be in your possession, the card number could be written on a form you completed and stolen from a third party such as an application you completed which is held by a business.
This is where the fraudster gets an illegal copy of the magnetic stripe of your credit card. Skimming devices that can capture it with a simple swipe like an Eftpos machine. Once they have your details a fake copy can be made to make purchases, or if they managed to capture your pin then they might be able to withdraw the cash directly from your card at an ATM. You card might be skimmed by an unscrupulous employee of a shop, restaurant or even by a device attached to the card slot on an ATM. A Skimming device could be so small that a waiter or waitress could carry it in their pocket and quickly swipe your card and you would never know.
Your card number and three digit CCV pin on the back might be obtained by a scam website or sales call prompting you to provide your details. Essentially you’re lulled into a false sense of security and unknowingly provide your details.
This is where a credit card scam artist has a fake landing page on the web in which you are tricked into giving your card details. You have probably seen this before, that email that informs you about how you won the $300 Million Swiss Lottery… all you need to do is click on a link they provide to enter your credit card details to unlock your multimillion dollar payment. It doesn’t need to be in an email, it could be less obvious, you could have just found the best deal on the internet and legitimately think you are purchasing an item and willingly hand over your card details.
Voice Phishing on the telephone is a form of social engineering, essentially the scam artist calls you up on your phone and misleads you into providing your
financial information such as your credit card details. Typically they might impersonate a bank or a power company and inform you about how your bill is overdue and you need to provide your credit card immediately. If you receive a cold call that uses a recorded message, there is a very good chance that you’re about to be scammed since this practice is illegal in Australia and no legitimate businesses do this
How to Prevent Credit Card Fraud
There are a number of simple and easy ways in which you can protect yourself from credit card fraud:
Never Share your pin or internet banking login details
Doesn’t matter if its friends or family, once you share this information you are no longer in control. Accidents can happen and even those people you trust most can unintentionally hand over your private card details to some credit card crook. Moreover, by providing these details to anyone else you actually void any credit card protection you have on the card, this means in the event you do get ripped off… your card provider won’t cover the loss.
Never write your pin down
For most people, this should be obvious, however as a former Bank Teller I can confirm that there are many people out there who don’t follow this rule. If you have trouble remembering your pin, you need to either choose one which has some significance to you so you remember it or find some other way to commit it to memory. If you really must write it down (even though you shouldn’t!) whatever you do don’t put it in the same place as your your card and if you lose it… change it immediately or call your bank to put a temporary block on your card until you resolve the problem.
Ask yourself is it safe before handing your card over
While it would be pleasant to win $500 million in a lottery draw, its unlikely that any lottery would expect you to hand over your credit card details to make a small payment to unlock your winnings…particularly when you never bought a ticket in the first place! You have got to be skeptical every time someone asks you for a credit card. Like most things in life if it sounds too good to be true it, usually, is.
Check the URL before providing card details
Every now and then, you may be inclined to make a purchase online, which is fair enough since there is often some great deals on the Net. However, the best deal on the web may actually be the worst…Before you hand over your credit card details its best to have a look at the URL and see what site you are actually on. Its happened to me before where I am going through the checkout of a well-known site, only to find that I had actually clicked on a deceptive link without knowing it. You can tell a lot, by the way, a URL looks, for example, odd looking numbers and letters that don’t actually represent anything about the site you are on would suggest your in a bad neighborhood.
Never provide your card details over the phone, unless you are sure
If you are receiving a call at home and are asked to provide your credit card details you need to be cautious. Ideally you should collect their name and call the direct number of the company they represent and ask to speak to that person. This way you know for sure who they represent. Otherwise, you could ask that person to provide you details to verify their identity. For example, if they are from your electricity company, that person should be able to provide you with your address, how much you spent on your last bill and when you moved in.
Put a block on your card ASAP after its lost/stolen
If you can’t find your card you should be worried… anyone can pick that up and start a shopping spree at your expense. Obviously you will attempt to locate it by retracing your steps, however if you have no luck there it means the card is either lost or stolen and you should immediately call the card provider and have it blocked. The block will stop anyone from spending your money, a temporary block will give you time to keep searching and hopefully find it.
Check your statement regularly
According to Queensland police most people don’t realize fraud has happened until up to a month later when they receive their statement. Looking over your credit card statement regularly on your online banking will help you identify the fraud earlier to prevent further losses. Generally its a lot easier to get your money back sooner if you caught the fraud sooner rather than later.
Use Paypal or other trusted Merchants
If you buy online is best to use a facility such as Paypal. In effect it’s another layer of defence, Paypal provide purchase protection from fraud, so if you do become a victim fraud and your credit card does not refund then PayPal may. In order to register a site to accept PayPal as a method of payment on a website, they need to provide details such as their name and address, you could imagine most scam artists are not keen on giving out those details so, you can be fairly sure that when a website uses PayPal as a method of payment you are safe.