When it comes to avoiding credit card fraud, most of us know the basics. Only buy from trustworthy sites, make sure the waiter doesn’t run off with your credit card… anything else?
With card-not-present fraud (meaning credit card fraud that is done without a physical card) on a sharp rise in Australia, we all need to be a little more cautious. As of late 2018, this type of fraud accounted for 84.4% of all fraud on Australian cards, and increased by 13% in 2017¹.
Not sure about you, but we’re pretty alarmed by these stats.
Credit card fraud and identity theft are two really important reasons why you should check your credit history on a regular basis. In this post we’re outlining what you can do to combat credit card fraud and hopefully avoid it altogether.
How does credit card fraud happen?
Credit card fraud is what happens when someone who isn’t authorised to use your credit card purchases goods or services using your details. All they need is your card number, expiration date and the three digit security code on the back to make purchases online.
The other big thing to watch out for is fraudsters opening accounts in your name. That’s where monitoring your credit file can help. It won’t pick up fraudulent transactions, but you’ll see instantly if anything looks off or if new accounts have been created.
Scammers can also authorise cash advances from your credit card and rack up interest fees in addition to the money they charge to the card. If you don’t monitor your accounts, someone can easily steal thousands of dollars from you and ruin your finances.
How do scammers get your details?
There are dozens of ways fraudsters could access your credit card information, but here are some of the most common:
- Someone finding an old credit card statement or receipt that you threw in the trash
- A merchant or writing down your information when you pay for something.
- An identity thief sets up a fake website and tricks you into inputting your personal, credit card or banking information. They use this to empty your account, charge your credit cards and open new cards in your name.
- A scammer calls and pretends to be an agent from the ATO or an agent from your utility company and threatens you until you give them your information.
- A roommate, family member or friend gets your information and decides to take out a loan in your name.
- A fraudster attaches a skimmer device over an ATM or petrol station credit card slot, and records your credit card information when you withdraw money or pay for your purchases.
How you can combat credit card fraud, or avoid it altogether
Credit card fraud can be a nightmare to experience, but there are several things you can do to avoid it. Here are a few best practices you should put into place asap:
- Review your credit card statements
It’s easy to ignore your credit card statement and toss it in the trash. But this makes it easy to accidentally miss transactions that you don’t recognise. We recommended taking five minutes to read through your credit card statement just to be safe.
- Protect your information
Never leave your information lying around where other people may find it and be conscious of what you’re putting in the trash. It’s a good idea to put any papers or statements that contain your details in a secure space. Even better, save the trees and have your statements delivered online or through your banking app.
- Use secure websites
Before you enter your sensitive information into any website, make sure it’s secure. The start of the web address should say “https” instead of “http” to denote that it is a secure connection.
- Avoid phishing scams
A phishing scam occurs when a fraudster sends you an email that looks like it came from a legitimate site. Your bank, the ATO, and credit card lenders will never ask you for your personal information over email. Delete any suss emails, and report and block the sender.
- Don’t give personal information unless you initiate it
No financial institution will call or email you and ask for your personal information. You should only give out personal information if you initiated the contact, and it’s better to do this in person.
- Carry only a few credit cards at a time
If you still carry physical cards, try not to bring all of your credit and debit cards with you at one time. We recommend adding your cards to a digital wallet that uses your biometrics or a passcode to access.
- Monitor your credit score regularly
Finally (and most importantly!), you should monitor your credit score at least once a month to look for activity you don’t recognise. Wisr offers a free credit score check that lets you access your credit score immediately. As soon as you see something that’s not right, you can report it to your bank and take steps to prevent unauthorised purchases.
Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services Pty Ltd does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.