Five common credit card frauds

Five common credit card frauds

Latest figures out of Australia show that credit card fraud is on the rise and accounted for (AUD) $538.2million of transactions in the 12 months to 30 June 2017. Although no official figures are published in New Zealand, anecdotal evidence suggests that unfortunately we’re following the same trend. Canstar looks at some of the more common scams out there and how to protect yourself against them.

“Card not present is by far the main way credit card fraud is conducted in Australia and recent media reports suggest it’s the same here.” Says Canstar general manager Jose George. “Obviously as our propensity to transact online increases, we are exposing ourselves to more risk, but there are things we can do to minimise that danger.”

As long as credit cards have been around, fraud has followed like a shadow. For many years, traditional scams included fraudulent applications or the cards themselves being stolen and used. Today however, many scamming techniques are online. Some of the more common ploys are:

1. Online purchases

Our love of speed and convenience makes it very tempting to save our credit card details on our frequently used websites and apps. The service is designed to make it easier and quicker for us to manage our purchases and recurring payments such as subscription-based services. But, whilst most online retailers work hard to ensure their payment method services are safe and secure, sharing your details in this way is not without risk.

For most of us, it would be crazy, and hugely inconvenient to suggest not shopping online, but it’s not that crazy to suggest a minute or two of inconvenience reinputting card details for each purchase could save you a lot of money. Another option is to use a payment service such as If it’s an ongoing payment, such as a subscription, look into setting up a direct-debit or a standing instruction instead.

2. Social engineering

Social engineering is the term given to the practice of fraudsters gaining access to assets or data by manipulating human behaviour. Some of the more well-known techniques include scammers sending emails or calling by phone posing as your bank or a service provider. They cite suspicious activity on your account or a problem with their networks and one of the things the need to check is your credit card details.

The fraudsters can put on an incredible act and appear helpful and concerned. Don’t get drawn in. Never give your personal details, including your credit card or bank account numbers, to anyone who calls or emails. Your bank and service provider will have a standard way to contact you and if you have an online account with them, always type out their website address, never click on a link supplied in an email. If you are in any doubt, report the activity to your actual bank or service provider as it may be part of a wider scam.

3. Ghost terminals

‘Ghost terminals’ are fake payment terminals set up by fraudulent groups. Often hard to spot from the real thing, they are not connected to payment networks and typically their purpose is to skim, or copy, the details that are held on the magnetic strip of your credit card.

According to the Australian Payments Network there has been a 13% increase in the use of ghost terminals. The APN suggests that the criminals operate as part of syndicated fraud units across the globe with sophisticated equipment that’s often difficult to trace.

Always be aware of where you are using your card, especially if you are somewhere unfamiliar. If you are at all suspicious, don’t use it, and even if you’re not, frequently checking your statement and payment history will help you spot if you have fallen victim. If this is the case, contact your provider and get your card stopped as soon as possible.

4. Fake wi-fi networks

This is a simple scam but easy to avoid and if you’re travelling this one is particularly important as it’s thought to be common in a lot of tourist spots. Basically, a fake, free to use, public wi-fi network accessed by unsuspecting users will clone all of the information the user parts with while they’re on the network. This can include card details, passwords, personal details, travel documents, etc, etc.

Home or away, never be tempted to access a free wi-fi network that is not password protected. If you are travelling, it may be worth setting up a VPN (Virtual Private Network) on your devices as this will act as a security wall around any data you up or download while on a public network. Have a look at the options available online, most VPNs are subscription based and can be used for as long as needed.

5. Video game fraud

Online gaming has become big business generating billions of dollars in revenue every year. From Candy Crush to Fortnite, the initial games may be free to download but the suite of in-app purchases available to enhance your experience or speed up progression, can be too tempting. As an example, free to download, Pokémon Go grossed (USD) $4.9million in its first four days. Unfortunately, it’s not all fun and games as these online environments can be a hotbed for credit card fraud through activity known as account takeovers.

An account takeover is where a scammer gets a hold of a player’s user ID and password, often using malware, a program specifically designed to covertly gain access to a computer or network. The scammers then uses those details to make in-app purchases, or worse, use credit card details to make unauthorised purchases outside of the game.

Reputable games developers are constantly looking at ways to stay one step ahead of the fraudsters after all, it’s in their own interests to keep their community safe, playing and spending with them. But, as a gamer, it always pays to check your account statements to make sure that the purchases that have been made, belonged to you. If you do see suspicious activity on your account, contact your card provider immediately.

George concludes:

“Technology is advancing everyday but fraudsters and scam artists are working hard to keep up with the progress. At the end of the day, the best protection is to be vigilant with how and when you use your credit card and, regularly check your statements. Any activity you don’t recognise, report it immediately.”

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