Credit cards not always safest way to pay

Media Release
Credit cards not always safest way to pay
11 October 2011

Credit card fraud is escalating, and the nature of some of the attacks means it is not always as simple as reimbursing the victim for unauthorised transactions, a national credit repairer warns.

Director of MyCRA Credit Repairs, Graham Doessel says whenever a criminal is able to access a person's credit card details, or any of their personal information - there is a chance the victim can have not only unauthorised transactions issued in their name, but possibly new credit taken out as well.

"Credit card fraud can take on a myriad of forms - but it can be quite sophisticated, and in those instances criminals may gain access to additional forms of credit - new cards, loans even mortgages."

"If the victim is unaware of the fraud right away and their credit file ends up with defaults - they can be blacklisted from obtaining credit for 5 years. That one instance of credit card fraud can end up financially crippling the victim. They can't borrow for anything - they can't even take out a mobile phone plan," Mr Doessel says.

This warning comes as New York Police made major arrests on the weekend of 111 people involved in five separate identity theft rings involving counterparts in China, Europe and the Middle East.

The victims had credit cards skimmed at many New York shops, restaurants and even banks dating back to 2010.

Then details on the credit cards where on-sold and duplicate cards were made that were then used to purchase and re-sell high-end goods such as electrical items.

The Herald Sun recently reported that authorities calculated that more than $US13 million ($13.4 million) was spent by the fraudsters on items such as fancy hotels, iPads, iPhones, computers, watches and handbags from Gucci and Louis Vuitton.

Police Commissioner Raymond Kelly says criminals are getting more sophisticated.

"Thieves have an amazing knowledge of how to use technology...The schemes and the imagination that is developing these days are days are really mind-boggling," The Herald reports.

The Australian Crime Commission says credit card fraud has grown rapidly in the past decade.

"...counterfeiting or skimming of credit cards cost Australians more than $45 million," the ACCC says.

The ACCC sites a number of scams as being prevalent in Australia.

There is fraud that begins at the teller or counter - such as card skimming (where details are swiped for later use) or stored value card fraud (where an additional sum is taken out than is authorised by the card holder).

There is also online credit card fraud - where details are extracted in various manners via the internet.

Mr Doessel says many types of credit card fraud can also directly threaten the victim's credit rating - such as account takeovers by fraudsters, and instances where criminals take out new credit in the victim's name.

"It doesn't even have to be for a large sum in some cases to be a massive blow to the victim's ability to obtain credit. I have seen people get refused a home loan due to a default for as little as $100," he says.

He recommends anyone who is concerned about becoming a victim of credit card fraud take some basic preventative steps.

- Always check the ATM or EFTPOS terminal before using it. Look out for any suspicious boxes that could be skimming devices. If in doubt - don't use it.

- Always cover your PIN when making transactions. - Never let anyone walk out of sight with your credit card.

- Consider paying cash on nights out and leave the cards where they are safe.

- Always check your card statements and report any unauthorised transactions - however small - to the bank immediately. Sometimes 'test' withdrawals are made by criminals to see if the unauthorised transaction goes undetected, before more significant amounts are stolen.

- Regularly keep up to date with what is on your credit file - which would reveal if defaults have been issued without your knowledge.

People can check their credit file by obtaining a written report for free every 12 months, from each of Australia's credit reporting agencies. But if they are suspicious of or vulnerable to fraud they can also for a fee obtain a credit report more often.

Mr Doessel says if there are any discrepancies of credit or adverse listings that should not be there they should act immediately to notify Police.

"This crime is not very widely reported. But it is only through people reporting it that any real statistics get collated. Likewise, if people want to try and repair their credit rating, the first thing I tell them is to make sure they have a Police report," he says.

For more information on restoring a credit rating following credit card fraud or any form of identity theft, contact MyCRA Credit Repairs tollfree on 1300 667 218 www.mycra.com.au.

/ENDS.

© Scoop Media