Credit Card Fraud, Traps and Scams: Guide to preventing the risk

Credit card fraud is an ever increasing evil we as consumers have to deal with. The Internet has made it near child's-play for fraudsters to trick us with credit card traps and credit card scams and as with most things, the best line of defence is knowledge.

Become savvy enough, even when shopping online and you won't have much to fear at all.

Help! I've been scammed:

Have you found a suspect transaction of your credit card statement? You could be one of the millions of Australians that have fallen victim to credit card fraud. Use this guide to identify what type of fraud you have fallen victim to and find out the best way to deal with it.

• Description
• Category
• Severity
• Actions

• I replied to an email, letter or text offering me a 'prize'.Lottery & Sweepstakes scams
  Social EngineeringLearn what to do

  How do I know this is a scam?

  • You did not enter the competition;
  • You are asked to pay a fee, provide bank account details and personal documentation to claim your 'prize'.

  What's going to happen if you fall victim to this type of scam?

  • Your money is gone and the prize will never be delivered.
  • Scammers often require you to send a copy of your driver's licence and passport to 'confirm' your identity before claiming your prize. This information is used to steal your identity.

  Take these actions:

  • Contact your financial institution and the Australian Competition and Consumer Commission immediately to alert them that there is a scam operating in your area.
  • If you sent money electronically:
    1. Check your account for unusual transactions.
    2. Contact your financial institution as they may be able to stop the transaction before it's processed.
    3. Contact a credit agency to confirm that the scammers have not applied for any financial products in your name.
    4. Scan your computer for malware using the latest anti-virus software.
    5. Change your passwords for your online accounts.
  • If you sent a cheque
    1. Contact your financial institution to cancel the cheque, they can do this before it's cashed.

  Do:

  • Do contact your lending institution immediately to inform them that you have accidentally taken part in a lottery scam.
  • Do report the scam to the Australian Competition and Consumer Commission, and tell your family and friends to spread awareness of the scam.
  • Do treat any correspondence asking for money with the utmost suspicion.

  Don't:

  1. Don't engage in any form of correspondence with the fraudulent offer.
  • Don't call the number listed on the scam as it may be a premium international number.
  • Don't open any attachments or click on any links within the fraudulent email as they may contain malicious software.

  Out of the 7,863 people who reported a lottery and sweepstakes scam in 2011, only 3.5% reported losing money, accounting for over $4 million.

• An email asked me to enter my account details. Phishing
  Social EngineeringLearn what to do
  How do I know this is a scam?

  • Trent Youl, CEO of Anti-Phishing company Fraudwatch International says: "there are a number of warning signs to look out for when spotting a phishing scam. Criminals are very smart and they try everything they can to make the email appear like it's coming from a genuine institution."
  • "Typically, a phishing email will have a link, an attachment or call to action for people to update their details." He added that the link will take them to a website that has: "the same look and feel as the original, but is always on a hacked site that may contain part of the genuine domain", for example: http://gorazor.ru/ua/.bankwest.com.au/;
  • "Your financial institution or a government department will never contact you asking you to enter your account or internet banking details." He added that: 'if they do, most financial institutions will address the email to a particular person, if it isn't specifically addressed to you or contains any specific identifying information this is a good sign that it may not be from the bank";
  • Grammar and spelling mistakes are a dead giveaway.

  What's going to happen if you fall victim to this type of scam?

  • If you click on the link, you will be asked to enter your online banking information or credit card details like you would when logging on to internet banking;
  • Once the scammers have your internet banking details they have full control over your finances and are capable of everything from emptying your bank account through to applying for a credit card or home loan in your name.

  Take these actions:

  • If you have not opened the email or attachment take these steps:
    1. Send the email to your financial institution as an attachment to alert them of the scam:
       • CBA - hoax@cba.com.au
       • NAB - spoof@nab.com.au
       • ANZ - 13 33 50 (Internet banking)
       • Westpac - 132 032
  • If you have opened the email and entered your bank account details, the Australian Competition and Consumer Commission and various financial institutions recommend you take these actions:

    1. Check your online bank statement for any unusual transactions and contact your lending institution immediately, inform them that you have entered your banking details into a fraudulent email and ask for your account to be frozen.

    2. Perform a scan on your computer checking for malicious software.
    3. Change your internet banking login information and usernames and passwords for any other online accounts.
    4. If you have lost money, you will need to file a police report.
    5. Check your credit history see if your details have been used to apply for a credit card or loan.
    6. Report the scam to the Australian Communications and Media Authority.
    7. Spread the word among your friends, family and social network to increase awareness of the scam.

  Do:

  • Do treat all requests for your banking information as suspicious.
  • Do have a look at what the email is saying and use common sense to determine whether or not you should enter your sensitive personal information.
  • Do delete these emails after informing your lending institution.

  Don't:

  • Don't use the links provided in the phishing email or download any attachments.
  • Don't reply to the email
  • Don't use your online banking account until you have performed a check of your computer system for malicious software.

  4.7% out of the 5,430 Australians who reported phishing scams lost $1,299,869 in 2011

• Someone has called me asking for my details or to log onto my computer.Telephone scams
  Social EngineeringLearn what to do

  How do I know this is a scam?

  • Someone contacts you over the telephone saying they’re from 'Microsoft’, the Australian Tax Office, your lending institution or another trusted source and asks for your banking details or for you to log on to your computer.
  • Representatives from one of these trusted organisations will never contact you asking for your personal information.

  What's going to happen if you fall victim to this type of scam?

  • They will ask you to verify your credit card details or to provide them with your credit card or security number. This information will be used for fraudulent purposes.
  • If they ask you to log on to your computer, you will be directed to a hacked website where your personal information will be compromised.
  • Once the scammers have your credit card information they may use it to steal funds from your accounts or steal your identity.

  Take these actions:

  • The Australian Competition and Consumer Commission advises people who receive these calls to take the following actions:
  1. If you're unsure about the legitimacy of a phone call, hang up and call the official number of the organisation they are claiming to be from. This will help you identify whether the call is legitimate or not.
  2. If you think you have provided your account details to a scammer, contact your bank or financial institution immediately and inform them of the situation.

  Do:

  • Do hang up the telephone and call the listed number of the organisation to verify the call’s legitimacy.

  Don't:

  • Don’t provide any personal or financial information to someone just because they have your telephone number.

  Reported telephone scams increased by 28,883 between 2010 and 2011 and are the most common way for scammers to contact you with over half of all scams initiated over the telephone.

• Someone has contacted me asking to help transfer money out of their country..Advance Fee Fraud - Nigerian 419 Scam
  Social EngineeringLearn what to do

  How do I know this is a scam?

  • This usually takes the form of an offer to help someone to transfer money out of their country.
  • Scammers will ask you to make a one off payment or provide your bank account details to cover fees, taxes or charges to release a large sum of money from one location, usually a central bank.
  • If it's too good to be true, it is.

  What's going to happen if you fall victim to this type of scam?

  • If you send money to the scammers, they will continue to make up excuses as to why they need more money to pay 'fees and taxes' - this will continue until they think they have gotten as much as possible from you.
  • You will never see the cash that was promised to you.
  • According to the Australian Institute of Criminology's 1999 report on Nigerian Advance Fee Fraud, those involved in this type of fraud are involved in other types of criminal activity such as: "credit card fraud, false identity fraud, forgery and immigration fraud involving counterfeit passports and visas."

  Take these actions:

  • If you have provided your bank details and personal information:

    1. Check your bank account statements for any unusual transactions.
    2. Contact your financial institution and inform them that you have accidentally taken part in a 419 scam.
    3. Run an anti-virus scan on your computer to check for malicious software.
    4. Change your online login information including any social media accounts.
    5. Contact a credit reporting agency to make sure any accounts have not been opened in your name.
    6. Contact the Australian Competition and Consumer Commission and inform them you have fallen victim to advance fee fraud.

  • If you have made a one off electronic payment:.

    1. Contact your lending institution and inform them that you have fallen victim to advance fee fraud. Your lending institution may be able to recover the funds if you act quickly.
    2. Do a full system check for malicious software on your computer using the latest anti-virus software.
    3. Change your online username and passwords
    4. Contact the Australian Competition and Consumer Commission.
    5. Ignore any further attempts by the scammers to contact you.

  Do:

  • Do treat any requests for money made by a stranger as a scam, no matter what they are offering in return.
  • Do spread the word among family and friends to raise awareness of the scam.

  Don't:

  • Don't try and follow the scam up with the scammers. Take it to the proper authorities.

  Approx. $27,483,743 was lost by 2759 Australians through Advance Fee Fraud in 2011

• I think the person I am dating is not who they say they are?Dating & Romance scams
  Social EngineeringLearn what to do

  How do I know this is a scam?

  • Jason Chuck, Country Manager from eHarmony says there’s a couple of tell tale signs that someone may be trying to get to your wallet through your heart: “online dating scams are similar to a lot of other online scams in that they aren’t very inventive,” he said. Chuck gave the following signs to look out for when trying to spot a scam:
  • Your chances of being approached by a scammer are much higher if you are using a free online dating service as: “scammers literally send out emails by the thousands”;
  • "The person is moving too fast and looking for a commitment right away";
  • "If someone asks for money, under any circumstance, it's almost always a scam";
  • "People should use their best judgement, if common sense tells you this doesn't feel right, it probably isn't," Chuck says.

  What's going to happen if you fall victim to this type of scam?

  • The online dating site you use will determine how easy it is for scammers to contact you and your level of protection.
  • The person who is posing as a 'love interest' may make multiple attempts to get your money.
  • Usually the attempts will take the form of a story detailing hardship and misfortune in an attempt to play on your emotions.
  • Any money sent has little to no chance of being recovered, even if the scammers are caught.

  Take these actions:

  • If you haven't provided your personal or banking details, Chuck advises that members of online dating services should contact the websites dispute resolution team to verify whether the person they have engaged with is legitimate.
  1. The larger online dating services have the ability to track IP addresses, check to see which other members the person in question has been in contact with and close the account if necessary.
  2. Ignore any further correspondence.

   

  • If you provided your online banking details, Contact your financial institution and inform them about the scam. They will monitor your account for fraudulent transactions.
  1. Run a scan on your computer to check for malicious software that may have infected your computer during the course of the romance.
  2. After you scan your computer, change your online passwords.
  3. Ignore any further correspondence.

  Do:

  • Do use the proper channels of communication when engaging with someone over the internet.
  • Do try and think about the situation logically.

  Don't:

  • Don't give away too much about yourself until you're sure you know the person is who they say they are
  • Don't provide your credit card information, even if you think you know them well.

  48% of all Australians who were involved in a dating and romance scam lost money in 2011, down from over half in 2010.

• I think I clicked a dodgy link on the internet.MalwareLearn what to do

  How do I know this is a scam?

  • Keith Price Director of I.T security firm Black Swan Consulting, says that: "malware used to be easy to detect because it caused your computer to crash, but nowadays, the people who write these programs are so sophisticated that it's extremely difficult to know you have a malicious program on your computer until it's too late."
  • Malware can infect your computer in the following ways:
  • You have clicked on a link or have visited a website that was sent to you through spam or phishing email or you have clicked on a pop up window while browsing the internet.
  • When downloading movies, music or pictures, the site you are visiting wants to install another program to let you download the requested content.
  • You have received a phone call from someone claiming to be from a trusted organisation telling you your computer is infected with malware and asking for remote access to your computer.

  What's going to happen if you fall victim to this type of scam?

  • Computers infected with malware are open to a range of attacks from malicious software known as spyware, trojans or adware.
  • These programs can do a range of damage, but a typical effect is the hackers can record every move you make on your computer. This includes the information you enter to access your online banking accounts, usernames and passwords for social media accounts. Hackers then have access to steal your money and impersonate you online.
  • ANZ's Electronic Bank Security Guarantee will fully reimburse unauthorised transactions provided that they meet with their electronic banking conditions of use, as described under the EFT Code of Conduct - claims of up to $10,000 are guaranteed to be reimbursed within 5 business days of submitting a transaction investigation request form.

  Take these actions:

  • The Australian government's Stay Smart Online initiative advises people who believe their computer is infected should consider the potential risk for determining the best course of action:

  1. Check to see that no unusual transactions have been made on your account. This can range from small transactions of a dollar or less through to large transactions of hundreds or thousands of dollars.
  2. If you have detected an unusual or unauthorised transaction: Contact your lending institution to inform them that your computer may be compromised by malware.
  3. Scan your computer with the latest anti-virus software to find any malware and remove it. Some types of malware require sophisticated anti-virus software to be removed.
  4. Change your online banking login information and any other online usernames and passwords.

  Do:

  • Price suggests a depth and diversity approach to computer security: "Do run a 3rd party Internet security suite in addition to the free Microsoft Defender [also found in Windows Control Panel] and install patches to minimise the risk of having your computer infected."
  • Do make sure your computer has all the latest patches installed on it: "For Microsoft users, free patches are released on every second Wednesday of the month and should be installed as soon as they are released", Price said.

  Don't:

  • Don't use public or shared computers for your online banking. They are far less secure than a personal computer as you don't know what the other users have been up to.

  Computer hacking scams are up from 4983 reported cases in 2010 to 19,473 in 2011.

• Someone is trying to use me to launder money over the internetMulingLearn what to do

  How do I know this is a scam?

  According to an Australian Federal Police Spokesperson, ways to spot a money muling scam include:

  • "The mule is usually approached online via email or instant message, or criminals may advertise on legitimate employment websites and in newspapers."
  • "Unsolicited job offers or opportunities which promise you can work from home and make easy money."

  What's going to happen if you fall victim to this type of scam?

  • Once the mule has been recruited by the fraudsters, they either open a new bank account or provide details of their own bank account in order to receive the stolen funds.
  • Once the funds have been received they are transferred offshore to a 3rd party criminal account.
  • The mule collects a commission for the transaction and is left open for either criminal prosecution by the police or having their identity stolen by the scammers.
  • The AFP warns that: "Persons engaged in the laundering of stolen funds may be charged criminally with money laundering offences. A conviction for an offence of money laundering may attract a penalty of up to 25 years imprisonment and/or a $165,000 fine."

  Take these actions:

  • If you believe you have engaged in a money laundering scheme:
  1. Contact your financial institution immediately and inform them that you have had an unauthorised deposit into your account.
  2. Contact the state and federal police and inform them that you have accidentally participated in a money laundering scam.
  3. Keep the correspondence between yourself and the criminals to assist police in their investigation.
  4. Ignore any further attempts at solicitation by the criminals.

  Do:

  • Do contact the police if you feel you are being solicited for an online money laundering scam.
  • Do keep records of all attempts at communication from the scammers to aid police in their investigation.

  Don't:

  • Don't accept any offer from the thieves to deposit funds into your account. You may be liable for prosecution by the police.
• Someone has been using my credit card.Card skimming
  Credit Card FraudLearn what to do

  How do I know this is a scam?

  • Crime Prevention Officer Senior Constable Julie Lewis from Eastwood Local Area Command, gave these tips to residents of a Sydney suburb after an ATM skimming ring was uncovered in their community:
  • "There are two things skimmers must do. First they steal your card information via a device that has been fitted to the area where you put your card into the machine. Second they steal you PIN number through a device attached to the top of the key pad or a small hidden camera fitted to an area where it can film people entering their key pad," she said;
  • Tampered machines often look suspicious and can be identified by wiggling the area where you enter your card into the machine. If it's loose, walk to another ATM.
  • Other signs include, a purchase on your statement for goods or services that you never used in a place you have never visited; and
  • You have been contacted by a member of your lending institutions fraud investigations team or they have blocked your account due to unusual transactions.

  What's going to happen if you fall victim to this type of scam?

  • A 'cloned' card can be created to spend your money and credit.
  • The stolen amount may be large or small depending on the scammers method of operation.
  • This information can be used to steal your identity and apply for loans or additional cards in your name.
  • The Commonwealth Bank and other major lenders monitor your account 24 hours a day and will notify and suspend your account if a suspicious transaction is discovered.

  • Visa and MasterCard's Zero Liability agreement will refund all defrauded funds provided their conditions are met.

  Take these actions:

  • Westpac advise that you must:

  1. Contact your lending institution as soon as you read your statement and see a suspicious or unauthorised transaction.
  2. Have your primary and additional cards and accounts blocked and re-issued.
  3. Create a record of the fraud and complete a 'Transaction Investigation Request form', outlining the list of transactions that are fraudulent.

  • It's also advised that you:

  1. Obtain a credit report to verify that your details have not been used to open any fraudulent accounts.
  2. Report the incident to your local police authority.

  MasterCard Zero Liability Agreement:

  The customer is not liable to cover for fraudulent transactions on their MasterCard provided they meet the following conditions:

  You have shown that you have taken care in protecting your card from loss, theft, or unauthorised use; and

  You notify your financial institution immediately after you discover your card is lost, stolen or has been fraudulently used; and

  You have not reported two or more incidents in the preceding 12 months; and

  Your account is in good standing; and

  You are in compliance with the terms and conditions of the card holder agreement,

  Do:

  • Do check every ATM machine you use for the tell tale signs the machine has been tampered with.

  Don't:

  • Don't make it obvious when you are entering your PIN number at an ATM machine.

  There were 108,382 instances of counterfeit and cloned Australian cards being used in Australia and overseas for a total loss of $41,189,295 in 2011.

• Someone has applied for credit in my name!Identity theft
  Credit Card FraudLearn what to do

  How do I know this is a scam?

  • Andrea Peters, a spokesperson from leading credit rating agency, Veda, says: "often there are few warning signs before you are contacted for payments against the credit or services the criminals have acquired using your identity."
  • She adds that other warning signs might include, "charges on your bank or credit card statements that you don't recognise;
  • receiving mail from a company or organisation you have had no interaction with, often relating to payment of debts or inquiries into services you have not made; and
  • irregular or failed postal delivery of bank or credit card statements can indicate criminal are intercepting or have redirected your mail."

  What's going to happen if you fall victim to this type of scam?

  • Peters says that: "the impact of identity theft can be both finically and emotionally devastating and it's extremely difficult, time consuming for an individual to rectify."
  • She also adds: "criminals use this type of information to obtain credit, purchase goods or services, falsify applications for passports, driver's licences and other documentation."
  • But that's not all the crooks can do with your details Peters says: "they can even fraudulently claim government benefits or medical treatment and engage in other criminal activity in your name."

  Take these actions:

  • The Australian Securities and Investment Commission advises that if you have your identity stolen you should:

  1. Report the problem: if you believe someone may have used your identity details fraudulently, take the following actions immediately:
     1. Request a copy of your credit file from a credit reporting agency such as, mycreditfile.com.au, to confirm the information on the file relates to the applications for credit that you have made;
     2. Contact any credit providers listed on your credit file to whom you have not applied for; and
     3. contact the police and report the crime.
  2. Keep records of your conversations. When dealing with a matter of this severity, keep all notes of the conversations including:
     1. Names;
     2. contact numbers;
     3. the date you spoke; and
     4. key details of the conversation.
     5. Peters says it's also important to ask questions so you understand the process: "each credit provider may have their own process for handling fraud. Note these requirements so you can comply with them."
  3. Your files will then be investigated. Peters says that: "each of the credit providers will conduct their own investigation and notify the us (credit reporting agency) of the outcome. The agencies will then remove any fraudulent information from your credit file."

     Credit Bureaus

     • mycreditfile.com.au
     • Secure Sentinel: securesentinel.com.au

  Do:

  • Veda suggest that you, do shred any paperwork that contains your personal details or account details before throwing it away.
  • Do know what is on your credit file.
  • Do use a lock on your letterbox and make sure that you place mail holds or mail redirects if you are travelling or change address.

  Don't:

  • Don't be blasé about losing your wallet, mobile phone and other personal items. They can all be used to steal your identity.
  • Don't allow shop assistants or waiters to take your credit or debit cards out of your sight when completing transactions. This can help to prevent 'skimming' where thieves take your credit card details to use again later.
  • Don't give any personal information to telemarketers, door-to-door sales people or market researchers.

  A study by the Attorney General’s department shows that 1 in 6 Australians have been a victim or know someone that has been a victim of identity theft in the first half of 2011.
  
  58% of occurrences were through the internet - 30% through a lost or stolen card.
  
  55% of transactions were used to purchase lost or stolen goods and 26% to obtain finance, credit or a loan.

• The item I bought online hasn’t arrived!Auction ScamsLearn what to do

  How do I know this is a scam?

  • The item is offered for considerably less than the online retail price.
  • The scammers try to get you to do the deal outside of the auction house.
  • Scammers may provide a link to their preferred banking site that can infect your computer with malware once clicked.
  • The seller has negative feedback or a bad online reputation.

  What's going to happen if you fall victim to this type of scam?

  • How you paid for the item determines what the possible repercussions will be.
  • If you paid via wire service your money and goods are lost: eBay strongly discourages the use of Instant Cash Wire Transfers, such as Western Union as: "generally, no recourse is available if the item is not delivered as promised, even if you use your credit card to send the payment."
  • If you paid by credit card you may be able to cancel the payment or be reimbursed by your financial institution: Card issuers and card schemes provide some level of protection provided you meet with their Electronic Funds Transfer policies but this method of payment provides your private financial details to strangers.

  Take these actions:

  • If you have fallen victim to an online auction scam:
  Report the incident to the relevant police authority. You will need to provide the following documentation:
  • Copies of all the emails relating to the offence.
  • A copy of the auction page including the username of the offender, the item number and a description of the item you have bought.
  • Bank and transaction records.
  • If you paid by credit card,
  Contact your financial institution and fill out a transaction investigation request form. Get a copy of your credit report and statements to check that there are no other unusual transactions on your account or no products have been applied for in your name.

  Do:

  • Adopt the too good to be true rule of thumb when shopping online.
  • Do check the online reputation of the seller before engaging in a transaction.
  • Do use a escrow service if you are unsure about the transaction.

  Don't:

  • Don't delete the emails relating to the fraudulent transaction, keep them all for future reference.
  • Don't provide your credit card details.
  • Don't pay through an instant cash wire transfer.

  43.4% of people involved in the 5,012 reported online auction and shopping scams lost a combined $4,161,590 in 2011

Severity Scale

• Initial outlay gone:
• Bank details compromised:
• Identity Stolen:

Important Contacts

Australian Federal Police:

• ACT:(02)6126 7133
• NSW:(02)9286 4000
• NT:(08)8980 1300
• QLD:(07)3222 1222
• SA:(08)8416 2811
• TAS:(03)6230 1525
• VIC:(03)9607 7777
• WA:(08)9320 3444
• After hours: AFP Hotline: 1800 813 784.

Australian Competition and Consumer Commission: 1300 300 630

Australian Media and Communication Authority:

• to report a SMS scam, forward the message to: 0429 999 888
• to report an email scam, forward the message to the Spam Intelligence Database: report@submit.spam.acma.gov.au

The Electronic Funds Transfer Code of Conduct Sets out the situations when you will and will not get your money back in regards to a fraudulent transaction on your account.

You will get your money back when:

• A forged, expired or cancelled PIN or card was used,
• A transaction took place before you received your card,
• A transaction took place after your told your financial institution that your card was lost or stolen or that someone else may know your PIN or password,
• It's clear that you haven't contributed to the loss.

You won't get your money back when:

• You acted fraudulently,
• You didn't keep your PIN or password secret,
• You unreasonably delayed in telling your financial situation that your card or PIN has been lost or stolen or someone else may know your PIN code.

 

Table of Contents

• Credit Card Fraud Prevention Tips
• How Credit Card Fraud Works
• Fraud Incidents in Australia
• What To Do If You Suspect Fraud
• Credit Card Protection Basics
• Fraud Protection And Secured Credit Cards
• Government Action and Consumer Protection Laws

Our credit card fraud prevention tips.

These days I would be much more concerned to leave my credit card out of sight at a restaurant or bar than purchasing goods over the Internet. But then, I already know the many credit card traps out there.

The following tips are here to help you become a savvy card user without having to fear credit card scams or abuse.

It’s not hard to see why credit cards are such a popular target for fraud and white-collar crime. Valuable information gets sent over networks with often feeble protections, a wide-open door that all but calls out to fraudsters. Online commerce has created historic spikes in the use and misuse of credit cards, but fraud has been around almost as long as credit cards themselves.

In Australia, where credit card ownership is one of the highest in the world, fraud is rampant but seldom given much thought. According to the Australian Institute of Criminology, it is one of the most under-reported crimes in Australia, with more than half of incidents believed to go unreported. And despite steps taken to improve security, the number of cases has stayed more or less the same save for the occasional dip. From 1995 to 2007, fraud cases went from 91,495 to 95,606, but went well over 100,000 from 1997 to 2004. And over the last five years, according to credit reporting agency Experian, fraud incidents rose by 55%.

How much is credit card fraud costing us? The numbers seem small; Experian’s report revealed that 57 cents out of every $1,000 spent goes to fraudulent transactions. But Australians put billions of dollars on credit every year, and the losses add up disconcertingly fast. In April 2010, the Australian Bureau of Statistics surveyed 800,000 Australians aged 15 and above who had been victims of personal fraud, over half of whom—or 3% of the adult population—incurred financial losses. About 380,000 were victims of credit card fraud.

The fraudsters’ net takeaway was estimated at $977 million for that 12-month period, with each person losing $453 on average. Consumer and merchant costs aren’t the only ones to take into account, of course—for one thing, the lack of confidence in online transactions can inhibit consumer spending and slow down economic growth.

Identity fraud (a larger category under which credit card fraud falls) has largely overshadowed scams, which were more dominant until the late 1980s. But both tended to affect the same age groups more than others. The AIC reports that about 4.3% of Australians aged 35 to 44 were exposed to identity fraud in 2010, making them the most vulnerable demographic. The 25-34 and 45-54 age brackets are also quite susceptible, with 4.2% and 3.9% of the population having been defrauded.

Top 14 credit card scam prevention tips

1. Common sense is a virtue and enough of it is a buffer against credit card thieves: OK, while this is more of a saying, it clearly states the fact that we need to use common sense when dealing with credit cards. It is logic in its purest form but interestingly enough many people misplace logic when dealing with their cards.
2. Never let your card get out of sight: This includes shop counters, restaurants, bars, nightclubs, hotels and basically everywhere you spend money with your credit card. When using it in front of other people - bystanders waiting to pay themselves - do not expose your card face to their prying eyes or mobile phones.
3. Treat your credit card like a national treasure: Keep it private! Do not ever share your card with family members, friends or partners unless you share the privileges of a partner card for a joint account. Plus, sign your card the moment you receive it!
4. NEVER click on email links prompting you to check your online/offline account: This is a blatant phishing attack and one of the biggest credit card scams out there these days. Millions of people fall prey to these clever tactics loosing thousands of dollars in the process as their cards get swiped clean by thieves who stole their login data.
5. If you shop online always check the site you are required to pay on is a HTTPS:// instead of the usual HTTP://: The added (s) stands for extra security layer which keeps your sensitive data secure.
6. Check your monthly statements: The best way to protect yourself against credit card fraud is by checking your credit card statements diligently each month. If some charges look dodgy to you, report them immediately to your bank to investigate.
7. Never sign blanks: Some hotels still require you to sign blank receipts on check-in. Don't. Ask them to put in a figure instead and then make sure it's voided when you pay your bill on checkout. By voided I mean ripped up and then shredded in front of your eyes. These are potential credit card traps.
8. Keep a secure backup: It's a good idea to write down your credit card numbers, account numbers and the like on a securely kept piece of paper in case you ever need emergency access to report abuse or a stolen credit card.
9. Always shred: Buy a shredder (they are affordable) and shred all your financial data! Thieves increasingly lurk nearby bins and will stop nothing short of going through your waste to get to your money.
10. Don't forget to notify your credit card lender when you move: Chances are if you do that your card might fall into the hands of shady characters.
11. One of the most common scams to get credit card online information is known as the update your information scam. These come in the form of an email sent to you that is supposedly from your credit card company or bank. The email requests that you follow a link to the website to update your member information. You should never do this. Financial institutions will not contact you in an email and ask you to update your information. If you think the email is actually from your financial institution log on to their website the way you normally log on. Not through the link in the email. If any information is needed the website will have a message about it.
12. Fake purchases and store fronts are another way criminals steal from you when you use your credit cards online. Make sure that a site you are making a purchase from is doing it in a secure, encrypted way. These sites will have an address that begins with http and will have a small padlock icon in their browser window.
13. Never transmit credit card information over email. Email is just not secure. Any vendor that requests you do business this way should be avoided. If they are valid they will have a safer way for you to make transactions.
14. Avoid the hard sell on a website. Usually if a site is using high pressure tactics to get your credit card information they are up to no good. Whatever they are selling you should not buy. Although it sounds a little scary to use credit cards online you can do it safely. You just have to protect yourself and only do business with companies who clearly want to protect their costumers by using secure methods for all transactions.

How credit card fraud works

The Australian Crime Commission defines card fraud as the use of plastic cards (including credit, debit, and stored value cards) to withdraw cash, make purchases, or otherwise use the card without the owner’s permission. Of the three categories, credit cards are the most common target, although stealing from debit cards is much easier. A credit card fraudster will typically use the

Fraudsters have dozens of ways to use credit cards or credit card information. In 1994 Dr. Jerome Jackson, now at California State University in Fresno, interviewed 14 young fraudsters who admitted they had over 100 ways of obtaining funds illegally from credit cards. Many of these methods may have become obsolete since then, or wiped out by new security measures. But a good handful remains widely used, and new ones have cropped up with the advent of online commerce. According to the ACC, the most commonly reported types of credit card fraud in Australia fall under four categories:

• Card-not-present fraud. A criminal with access to someone’s credit card number can use it to carry out transactions online, over the phone, or any other method where the physical card, PIN, or signature isn’t required.
• Counterfeit card fraud. With the technology to make plastic cards becoming relatively accessible, all one really needs is the right information to create a fake card. This data can be bought from underground markets (for as little as $2 per card), stolen from online databases, or obtained from the card itself in a process called “skimming.”
• Not-received fraud. This is the simplest, if most primitive, way to commit credit card fraud. New credit cards can be stolen from the owner’s mailbox and used to make purchases. Since most terminals now enforce added security, stolen cards are often used strictly online or over the phone.
• Application fraud. Fraudsters can obtain a person’s name, address, and other identifying details, and use them to apply for credit cards. The victim then unknowingly becomes liable for purchases and cash advances made on the new card.

Online fraud is perhaps the fastest growing type of credit card fraud around the world, gaining ground even in developing countries where e-commerce isn’t very present and credit card use isn’t all that high. A contributing factor is the fact that it doesn’t require a physical card to carry out; one simply has to get his hands on the information. In Australia, where fraud has been rising an average of 50% every year, about half of all incidents take place online, according to the Reserve Bank.

Fraud incidents in Australia

Despite its notorious dependence on credit cards, Australians are still less vulnerable to fraud than those in other developed countries. In Britain, for example, 141 out of every 100,000 transactions in 2009 were fraudulent, compared to just 9 out of 100,000 in Australia, according to Smart Company. Here are some of the biggest and most recent:

• The MasterCard hack. Considered one of the biggest hacks in the world at the time, this 2005 incident put some 40 million credit card holders at risk as hackers got hold of their information from the MasterCard database. Only a few thousand were affected in Australia, and they were quickly issued new cards by their respective banks. But the evidence took months to surface; although the news broke out in June, suspicious transactions were traced as far back as December of the previous year.
• The Queensland fraud rings. Separate arrests made in Queensland in 2007 and 2009 may be linked to the same global syndicate that creates fake credit cards using data stolen online. In the more recent arrest, the fraud was believed to have cost consumers about $1 million, making it the biggest fraud of its kind in the state’s history.
• The inter-bank breach. Three of Australia’s Big Four Banks—Commonwealth, National Australia Bank, and Westpac (including its recently acquired arm St. George)—had to cancel some 8,000 credit cards in May 2011 after their records showed several suspicious transactions. A link to the recent Sony PlayStation hack was quickly disproven, but as the incident followed a series of ATM glitches, it brought attention to the banks’ out-dated computer systems.
• Taxi card skimming. Rising incidence of card skimming, where information is copied off a card’s magnetic trip, in passenger taxis have prompted authorities to tighten their license regulations. The scam was reported in Melbourne as early as 2009, but as of mid-2011 many cab drivers were still found to be using non-secure payment methods and operating under fake authorisations.
• Melbourne fake credit cards. In 2006, North Melbourne-based Choon Ping Ng was jailed for three and a half years for his involvement in an international fake card scheme that ran back to 2003. He was believed to have pocketed $60,000 out of the estimated $3.5 million of fraudulent transactions, which were traced to Malaysia and Singapore.
• Wagga card fraud. Two separate incidents in Wagga Wagga, New South Wales in 2007 and 2009 point to a national or possibly international fraud ring involved in using fake credit cards to make purchases. In 2007 five arrests were made, and transactions totalling around $850,000 were uncovered. However, more fake cards were found to be in circulation in 2009 and local businesses were warned to keep an eye out for suspicious customers.
• Paralympic phishing scam. “Phishing” is a Web term for a plot to retrieve personal and financial information, usually through false e-mails. One of the most memorable phishing scams to hit Australia asked people to help fund the Australian team for the 2004 Paralympic Games in Athens. Those who chose to donate by credit card were led to a replica of the Westpac website, where they would then enter their card details. A glitch in the program gave the plot away, and banks immediately issued warnings to customers reminding them never to give out personal information online.
• ATO scams. At the tail-end of the 2011 fiscal year, Australian Taxation Office alerted taxpayers of a phishing scam posing as the ATO itself, asking individuals to pay $200 or provide their personal details to qualify for a $7,000 refund. The criminals are taking advantage of post-tax-season flurries to “catch people off guard,” according to Tax Commissioner Michel D’Ascenzo.
• Phone scams. Since the early 2000s Australian authorities have warned consumers against credit card phone scams, in which criminals pose as bank agents or government representatives to get a person’s card details. Their stories range from free holiday vacations to suspected fraud, and can cost an individual anywhere from a few hundred to several thousand dollars.

What to do if you suspect fraud

Fraud is fairly easy to prove in court. The problem is that many cases don’t make it that far, as most operations are “fly by night” schemes that are difficult to pin down. In addition, scammers operating outside Australia may be beyond the authorities’ control, according to the government website Scamwatch. The website, a project of the Australian Competition and Consumer Commission, says self-defence is still the best way to protect oneself. If you think you or someone else has been defrauded, here are some possible courses of action:

• Interstate/overseas scams: Contact the ACCC. It’s the only body that oversees incidents of this scale, as well as trade and consumer protection matters. Use their online form to report a scam directly to their Infocentre. Local scams can be reported to state or territory offices.
• Financial and investment scams: Malicious offers of superannuation funds, counselling, credit accounts, and similar products fall under this category. These should be reported to the Australian Securities and Investments Commission. If you’re not sure how to classify it, learn more on the ASIC’s MoneySmart website.
• Tax scams: If a scam targets your tax payments or is attempting to get your tax details, report it to the Australian Taxation Office. You can file the report by email.
• Bank and credit card scams: When your bank account or credit card is targeted, contact both the ACCC and the ASIC, but as a first-line measure, get in touch with your bank or card provider as well. They can verify the phone call or email, or if your account is already compromised, they can block it to prevent further fraudulent use.

Credit card protection basics:

Information is often collected by criminals about your personal details, as well as about your credit cards. This information is collected using various ways such as:

• Lost and stolen cards.
• Phone and Internet monitoring.
• Theft of statements sent through the mail.

The ways in which the information is used is dependant upon who it is taken by. When information is stolen, it can be used in the following ways:

• To spend your money fraudulently.
• To collect more information.
• Accounts can be directly accessed and money taken.

If you are interested in credit card protection, it is wise to look for a company that offers you secure protection against criminals and is reliable, dependable and honest. Secure Sentinel is one company that provides the security you may be looking for when you lose your cards.

To avoid situations where you have lost, misplaced, or even had a card stolen, it is best to follow some basic guidelines.

• Never trust a person, company or organization that asks you to provide them with your credit card information via email, phone calls or mobile text messaging.
• Never give out credit card information on unknown web pages. Stick to the home pages of well-known companies or businesses.
• When making purchases in a store or restaurant always be aware of what is called card skimming. This is when a second card reader is used to illegally take down your information.

When on the look out for credit card theft, it is often more difficult then it may seem to spot criminal activity since these thieves are often good at what they do. Some common scams include:

• Calls made by criminals, pretending to be the fraud department of a specific card company.
• Calls made claiming to need assistance with a fraudulent transaction on your account.
• Calls made claiming to need a correction of an address on a card.

In order to help obtain credit card protection that is efficient, you will need to contact a company that will provide you with instant services in relation to credit card fraud. When purchasing a new card, always be sure to sign the card immediately, memorize the PIN, destroy remaining written evidence of it and make sure that no copy of the PIN number is written down anywhere for any purpose. This would be the worst case scenario; having your credit card stolen with your PIN.

Use the information above about credit card protection to keep your cards safe. You don't want to have the hassle of unauthorized purchases being made on your account.

If you are worried about the credit card protection on your card, or are thinking about getting a credit card in the near future, there are a few things you should know about. You can protect yourself from credit card fraud by learning some simple protection tips in this article.

There has been a lot of credit card fraud problems in the past, but fortunately credit card protection has technically advanced to make sure your card is safer than ever. There are still a few things that you should do to make your card even safer, and protect yourself from fraud as much as possible.

Fraud Protection And Secured Credit Cards

Secured Credit Cards - Check

The Australian and New Zealand Banking Group Limited, also known as ANZ employs a whole range of methods and cards designed to help their customers in fraud protection and security when shopping. All ANZ credit cards prevent fraud by using the latest innovative technology.

The Eagle Eye

Some of these measures include the ANZ Falcon ™ security, Online shopping guarantee, micro-ship technology, PIN or pen choice, Verified by Visa, MasterCard SecureCode ™ and ANZ CreditCover Plus insurance. This comprehensive protection allows one peace of mind and confidence to shop online, over the counter or over the phone.

The ANZ Low Rate MasterCard offers the ANZ Falcon™, an anti-fraud protection feature which ensures that ANZ will contact the customer if there are suspicious transaction on your account to ensure that these were legitimate.

With ANZ Fraud Money Back Guarantee the customer is not liable for illegal or fraudulent transactions on the ANZ card, if the customer contacts ANZ immediately and did not help to bring about the loss. A Personal Identification Number (PIN) or signature also makes the authorisation of credit card purchases more secure.

Protective measures

The evolution of credit cards over the years is a testament to the steps banks have taken to prevent fraud. From its earliest physical predecessor, the “metal money” cards introduced by Western Union in 1914, banks have moved to plastic, implemented credit checks, added magnetic strips, required signatures, and assigned serial numbers. Today, these are all standard features. Modern add-ons include:

• Credit card codes. The card verification value (CVV) is a way for card issuers to make sure a user has the actual card in hand when making a transaction. This is especially useful for phone and online purchases. On Visa, MasterCard, and Diners Club cards, the CVV is the last three digits of the number on the back of the card; on American Express cards, it’s the last four digits. The numbers are not embossed and do not appear on any receipts, so they cannot be skimmed or stolen.
• Security chips. New credit cards now come with security chips, where information previously contained in the magnetic strip is stored. Confidential information is encrypted, making it harder to access and copy. While it’s not foolproof, chip cards can be trusted to ward off the most obvious attempts at fraud.
• Personal identification numbers. Along with the security chip came the PIN-enabled credit cards, wherein a personal code replaces the signature. This limits the chances of forgery. Chip and PIN technology in credit cards will be standard in Australia by 2013.
• Additional features. Some security features come only with high-end credit cards or are available for additional fees. For example, some credit cards offer identity theft cover and credit monitoring for about $15 per month. Many of these aren’t really worth the money, however, according to Kelli Grant of SmartMoney.com. Those worth opting for, she says, include zero-liability policies, temporary purchase numbers for online transactions, and to some extent, photo identification and purchase monitoring.

The Chip Technology

Some cards have microchips which make it much harder for swindlers and tricksters to copy card details. Another method ANZ utilises to aid its customers in fraud protection is to provide a password and unique message to authorise purchases when shopping online. The ANZ credit card shopping online guarantee protects your card against unauthorised, false purchases done on the card.

ANZ also provide tips to help educate customers about Internet credit card fraud and make them aware of the latest tactics used by fraudsters. These include tips on how to protect oneself from card skimming, on how to protect one's financial identity and how to improve online security, how to protect oneself when banking online, how to use the Visa Credit Card in an ATM Machine, online shopping tips when using a Visa Credit Card, how to protect one's privacy when using the Internet and how to identify a fraudulent credit card. In addition, ANZ also provides information about anti-money laundering, a spam alert guide, credit card protection tips, Australian credit card fraud statistics, and much more.

Secured credit cards are well known and bring relief to customers and consumers by preventing impulsive overspending, and people with less than perfect credit ratings can improve their ratings once again. Secured credit cards also are preferred by those who just don't like being in debt and borrowing money. It allows control over one's money, they are relatively easy to obtain and are convenient. These types of cards also inspire responsibility and financial freedom. Regular and timely monthly payments will allow credit lenders to increase the card limits and will help build a credit history.

Government action and consumer protection laws

The government has also taken steps to better regulate credit card use, although investigating every single case is out of the question. Indeed, police admit they’ve been passing “low-priority” cases on to the banks, saying they are low-priority and that compensation matters are beyond their authority. Besides, they added, although fraud has been on the rise in Australia, the numbers are still low compared to other developed countries.

One problem with regulating fraud is classifying the offence and determining its gravity. According to the Judicial Commission of New South Wales, since the crimes are often carried out by people entrusted with handling delicate information (such as bank employees), fraud necessarily involves a serious breach of trust. This means the punishment should reflect the gravity of the fraud (although not all are considered criminal offences), to “[deter] the offender and other persons from committing similar offences.” Five factors are taken into account when gauging the seriousness of the offence:

• The amount of money lost and whether it can be recovered
• The length of time the fraud has been going on
• The fraudster’s motivations
• The level of organization and sophistication involved
• Whether or not a breach of trust was committed

Recent cases have also prompted the court to take into account the crime’s impact on the victim and on public confidence.

Consumer protection laws were carried out by states and territories until January 2011, when the Australian Consumer Law came into effect as part of the Competition and Consumer Act of 2010. The ACL contains provisions that address some of the most widespread scams and frauds in the country, including deception, false representation, unreasonable conduct, false billing for unsolicited products, and pyramid selling.

Under the ACL, offenders are subject to a number of actions, including monetary penalties, injunctions, and requests for legal action from community service to jail time. The affected parties may also be awarded damages, and fraudulent contracts may be cancelled.

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