Avoid skimming and phishing credit card fraud

Avoid skimming and phishing credit card fraud

While credit card institutions are employing the most advanced counter-fraud technology, criminals are still coming up with the latest skimming and phishing fraud schemes to abstract money from our wallets.

The Australian Competition and Consumer Commission’s Scam Watch highlights the signs which will alert you to credit card fraud and tips to help you avoid becoming subject to it.

There are four types of common credit card frauds:

  • Card-not-present fraud: A person who uses an unauthorised card over the phone or on the Internet.
  • Counterfeit card fraud: The production of fake or counterfeit cards obtained by skimming the details from legitimate credit cards.
  • Card-not-received fraud: Stealing a card from an authentic credit card holder.
  • Application fraud: Credit card applications using false identities.

While all credit card fraud is concerning, card skimming and phishing is becoming more rampant and harder to control.

What is credit card skimming?

Card skimming is the act of illegally copying information from the magnetic strip of a credit card.

Card skimming is done for two reasons; to copy your personal information in order to create a fake card, which they can then use to access and make payments from your account or to steal your identity.

Identify theft occurs when a thief steals your personal details in order to create accounts, borrow money or take out loans.

Spot skimming fraud

In store: Suspicion should be raised if a shop assistant disappears out of sight with your card, swipes your card through a different machine than the one you used or asks you to swipe your card through more than one machine. 

ATMs: If the ATM you are using looks abnormal or appears to have an extra device attached, do not use the machine and report it to the bank and Crime Stoppers on 1800 333 000.

Transaction record: Keep an eye out for unusual transactions as this is the easiest way to determine if someone has skimmed your card.

Protection tips

Passwords and disclosure play an important role in keeping your credit card safe. Do not share your credit card, PIN number or write your details down. Pick intricate passwords and check your transactions regularly.

What is credit card phishing?

Phishing scams are similar to skimming fraud but are conducted via the Internet or mobile phones.

Emails or SMS are sent to you, under the fake cover of legitimate institutions, asking you to verify your bank account or personal details, in order to trick you into giving over this information.

The scammer is trying to get your bank details, passwords or credit card numbers so that they can steal your money.

Spot phishing fraud

Spotting phishing fraud can be harder as they act as legitimate companies by copying company logos and creating similar Internet address’s (URL), however once you know what to look for you should easily be able to spot the legitimate from the fraud.

No prior account: If you receive an email or SMS from a financial institution that you have never held an account with and they are asking you to verify your account details, you can be guaranteed it’s a phishing scheme.

Email errors: Big red flags to look out for are grammatical errors, spelling mistakes or your name is not addressed correctly.

You’ve won: Be wary of any emails or SMS that tell you you’ve won a large sum of money. Chances are, if you haven’t entered into a specific competition of late, it’s not a legitimate email. They may also tell you that you are eligible for a refund or other fee that they claim has been charged to your account. It won’t take you long to verify these details by checking with your bank.

Verify your account: Some phishing scams claim your details are needed to verify your account in order to protect you from fraud. Always be very cautious about verifying your details, unless you are on a legitimate website. Remember, most companies will never ask you to verify your password via email so if you get an email asking for this, play it safe and call the company directly.

Protection tips

Here are a few tips you should follow to help you avoid the slimy world of phishing scams.

  • Never give out your credit card details unless it’s a website you trust or you have phoned the company directly. If they have called you claiming to be a trusted institution, grab their details and call them back.
  • Do not open suspicious emails. Delete them, flag them as phishing emails within your email account or report them to the Australian Communications and Media Authority. If you have opened the email, do no click on the links within it or open any attachments.
  • Don’t call numbers from spam emails or SMS.
  • Bookmark the legitimate Internet account links that you use regularly rather than following links in emails.
  • Check the website carefully and if you aren’t 100% sure don’t enter your credit card details. 
  • Do not send your credit card details via email or SMS.

By following these rules and knowing the signs to look out for you can enjoy safer, fun shopping. You’re never 100% safe from fraud so make sure you stay ahead of the fraud trends by reading up on the latest skimming and phishing scams.

RateCity has over 200 credit cards you can compare online, each with their own unique security protection measures.

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Learn more about credit cards

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

How to make a credit card online

If you’re wondering about how to make a credit card online application, here are some steps to follow:

  • Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
  • Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
  • Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
  • Review details. Ensure the information you’ve entered is correct.

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

How many numbers are on a credit card?

The numbers on your credit card actually follow a universal standard which is used to identify specific functions. Each credit card has a different amount of numbers. Visa and Mastercard have 16, American Express has 15 and Diner’s Club has 14. 

The first number on a credit card always identifies what type of credit card it is. Visa cards start with a 4, whereas Mastercard starts with a 5 and American Express with a 3. The remainder of the digits represent the account number, including the last number which is used to verify that your credit card is actually valid. 

Credit cards also have additional verification numbers, which are mainly used when the card isn’t present for phone and online purchases. These are the three-digit numbers on the back of Visa and MasterCard or the four-digit numbers on the front of an American Express card.

How do I apply for a credit card online?

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.