How valid are credit card signatures?

Laine Gordon

By Laine Gordon

3 min read

Is the signature on the back of your credit card unforgeable? Chances are, it’s just your initials. A couple of letters, scrawled onto the card so that when you’re paying for your lunch it doesn’t take so long that your coffee gets cold.

I had good intentions. When I received my first credit card in the mail, I thought, "right, I’m going to sign this thing in such a way that no thief will ever be able to fake my signature!". That lasted about three months, at which point I realised that I was taking far too long to sign for purchases at the register.

The next time I got a credit card, I signed my initials. Who checks the signature anyway? Half the time, it seems like you could write Mickey Mouse and the person on the register would accept it with a polite "thank you". But what happens if your card is stolen, and the thief goes on a spending spree? Who foots the bill?

According to the Electronic Funds Transfer Code of Conduct, under which all credit card issuers in Australia operate, it is the responsibility of the merchant to check the validity of each and every signature. And if a credit card thief uses a stolen card, the merchant is the one who loses out in the end, and is unable to recoup the cost of the stolen goods.

If there is any cause for doubt, the merchant is allowed to request identification of some sort to verify that you are who you say you are. After all, there’s no photo ID on a credit card! And if that smudged scrawl on the back of your card is all the shop keeper has to go on, who could blame them for requesting to see your drivers license?

According to the code, so long as a consumer does not do anything to contribute to the loss, they cannot be held liable for any infringing purchases. The consumer should, however, report the card as lost or stolen as soon as possible. Credit card signatures are there for your protection as much as they are the merchant and the bank’s.

There are, however, some other security measures in place, designed to protect you from credit card fraud. Automatic intelligent (or sometimes not so intelligent) software attempts to detect fraudulent transactions and for the most part this system works. Photo ID is also present on many cards throughout Europe, though this system is yet to make an appearance here in Australia. Perhaps it is only a matter of time.

There are a range of credit cards on the market but just which one is best suited for you and how do you keep that card secure?

Use the RateCity credit card comparison tools to find the best credit card deal for you.


Contact a Broker

Get expert advice about this loan now!

We can negotiate discounts and lower rates for you

By submitting this form, I accept RateCity's terms and conditions, privacy policy and Collection Statement for this service.

Yes, I'd like to get email updates from RateCity

Submit your details now and a local expert will be in touch within a few business hours. They'll compare hundreds of home loans from up to 20 lenders including the big banks to find the loan that's right for you.

Loan Market Pty LTD | Australian Credit License 390222 ABN 89 105 230 019

Compare your product with the big 4 banks, or add more products to compare