How To Avoid Credit Card Fraud

Every time you turn on the news these days, there are stories about credit card fraud, identity theft, phishing, skimming… So what everyday measures can we take to protect ourselves from theft?

Firstly, it is wise to contact your bank or credit card provider to find out what their policy is in regards to credit card fraud. Generally, you wont be liable if your card is used fraudulently even if it is overseas, provided that you have used your card responsibly. Follow your bank’s security procedures to reduce the risk of fraud and theft and to cover yourself in the event that theft does occur.

Many banks now use the Falcon fraud detection system, you may have seen it advertised. The Falcon system is a computer programme that tracks your spending, creates an individual profile and gives each use of the card a score. If you usually use your card to buy groceries for around $100 at your local supermarket, then all of a sudden it is used in Hong Kong for $3,000, then the bank will be alerted to possible fraud and will either contact you or put a block on your card. It is for this reason that you should keep your contact details with your bank up to date.

Other ways that you can protect yourself include:

Generally

Regularly check your statements

Check your statements to ensure that all transactions are valid. If you use your card a lot, keeping your receipts and cross referencing them with your statement helps. If you have access to an online statement, then irregularities can be picked up quickly.

If you find irregularities on your statement, the call the bank and ask them to look into it. Be aware though, if it is a genuine transaction that you forgot about, you may be liable for fees.

Keep your cards secure

Carry your cards in a secure bag rather than just in a pocket. Don’t leave them or your bag lying around where it can be taken. This seems like a no-brainer, but I’m constantly surprised how often people leave their handbags and wallets unattended.

Lock your letterbox

Identity theft can occur when people steal mail from your letterbox and gain access  to your personal information. If you’re concerned about people having access to your mail, then a post box may be a solution.

Shred your documents

The best shredders are ones that cross cut and turn your papers into confetti. Shredded paper can make great compost too.

Pick your cards up from the bank

If you can, arrange to pick up new cards from the bank rather than have them mailed out to you. When disposing of old cards, it’s a good idea to give the magnetic strip a good scratch as well as cutting the card up.

Never keep your pin with your card

Don’t write your pin on your card or keep it in your wallet with your cards. If you can’t remember pins and need to keep them available, make sure to encode them well.

Don’t give your card to someone else

You can’t ensure that your card is being used responsibly if you give it to someone else.

Use only the last digits to verify id

Occasionally you are asked to give credit card numbers as a form of identification. If you are asked and it is a genuine request, give the last four digits only, that should be enough.

Online

Use anti-virus, firewall and spyware software

Keep your anti-virus software up-to-date.

Use strong passwords

Better passwords to use are ones that aren’t obvious like your birthday, and include numbers and letters. If you’re allowed to, use special characters as well. Web browsers offer to remember passwords so that you don’t have to log on again next time, don’t use this option. If you keep a record of passwords, it’s better to keep it on paper somewhere safe rather than on your computer.

Be stingy about providing personal details

If you’re signing up for something and have to provide personal information, opt out of allowing this information to be passed on to third parties.

Be careful about what personal information that you give out on social networking sites like facebook and twitter as this can be used for identity fraud.

Use a credit card

Your credit card provider can often cancel a transaction if you don’t get the goods or something goes wrong and if you use a credit card rather than a debit card, then potential thieves don’t have access to your savings and if you use cash, you often have no recourse.

Beware of phishing, smishing and scams

Phishing is where scammers send emails that may look official, like an email from a bank with letterhead, asking for your personal details. You bank will ‘never’ ask for your personal details over email. (Actually mine did. It was a genuine bank email and I rang them and complained. It was my new local branch manager who made a mistake, so if you’re unsure give your bank a call.) Generally speaking, it is not safe to provide personal information like credit card numbers via email.

Smishing is similar, but done via SMS. For more information check out ASIC’s fido website.

I don’t need to say that if the email is from a Nigerian businessman in desperate need of money or for an overseas lottery, then don’t send money. Scams aren’t new to the internet, it’s just easier to access and try to scam more people.

Shop Securely

When you’re shopping online there are a few things that you can look for. Request the telephone number, street address of a business and business details to ensure that it is a genuine business you’re dealing with. All Australian businesses have a business number that they need to quote, and you can look this up using the government ABN website.

Don’t accept transactions from web based email addresses like yahoo, hotmail or gmail.

Don’t email your credit card details.

When placing your order, look to see that it is a secure site. Two things to look for are https:// instead of http:// in the web address and a padlock icon in your browser’s window (usually in a lower corner of the window). Pay Pal can be another way of protecting yourself against others gaining access to your credit card details.

Be aware that credit card fraud hurts online businesses more than it does consumers, as consumers have the protection provided by their card provider, but businesses often have to bear loss of stock without pay.

At The Shops

Don’t take your eye off your card

This mostly applies to paying at restaurants. Go with your card when paying.

There’s probably little reason for your card to leave your hand these days. Most shops ask you to swipe your card yourself, and if they don’t you can always insist. If they want you’re money they’re not going to argue. Hold onto your card when the assistant checks your signature and if they don’t check it, mention it to the manager. Shop owners have just as much responsibility in avoiding fraud as individuals.

If you have to leave a blank credit card imprint as a security deposit keep the carbon copy and ensure that it is ripped up in front of you afterwards.

Take all of your receipts.

Some old registers still print the full card number on the receipt. You can also use your receipts to cross check against your statements later.

When I worked in retail, this is a trick I often saw people use to protect their card. I don’t know how effective it is, but I’ll mention it anyway. When they signed their receipt and I went to check it against the back of their card, written in it’s place would be “see licence”. Their driver’s licence had a signature that I could use to cross check and a photo id.

Another thing from working in retail: if you change your signature, change your card. Several times I had angry customers who refused to sign in their maiden name or with their old signature and I refused to finalise the transaction because their signature did not match the card. They were pretty angry, but I consider this good service: what if the card had been stolen and I had just believed the story and let it slip? I would have been assisting theft.

At The ATM

Shield your pin

Not only do you want to shield your pin from prying eyes, you want to shield it from prying cameras. This is one of the most effective ways to to protect yourself from your average skimming bandit.

Watch for people standing immediately behind you

Some people just don’t get personal space, but if someone feels dodgy, trust your instinct and go somewhere else.

Get to know your ATM – intimately

You hear about skimming a lot these days. To protect yourself against skimming, get to know the appearance of your regular ATM and look for any anomalies like signs of damage, scratching, sticky tape, marks, loose keypads, loose card slots etc. Most skimming devices are only on an ATM for less than 24 hours and usually in the early mornings and late evenings.

The Commonwealth bank has a PDF for it’s staff to help identify skimming devices. You can find it here through the Crikey website. It’s a good demonstration of the different types of skimming devices to watch out for, and I have to admit, I was pretty blown away by how real these devices look. Of course, you could always just get your money out at the supermarket.

Over the Phone

Don’t give your credit card number over the phone unless you made the call

If it is a legitimate request for a credit card number, then hang up and find a statement or a phone number and call back to ensure it’s not a third party scammer. Don’t take their word for the phone number – look it up yourself to confirm that it’s the business in question you’re actually dealing with and not a scammer.

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Have you read these posts?

1. causes of overspending and how to avoid it
2. why you should avoid workplace tax deductions
3. avoid antibacterials with basic kitchen hygiene
4. An Update to the Envelope Budgeting System