How to Spot and Avoid Credit Card Scams

JUMP AHEAD:

• Red flags of credit card scams
• 8 ways to avoid credit card scams
• What to do if you’ve been scammed

If you’ve been a victim of a credit card scam, you’ll know what a drag it is and want to do everything in your power to prevent another one from occurring. Four in every 100 Australians is affected by credit card fraud, so there’s a good chance your turn will come unless you take steps to protect yourself against credit card scams — if you haven’t already fallen victim. 

Here’s what you should know to protect yourself from credit card scams. 

Red flags of credit card scams

Scammers may change their methods frequently, but they use some of their tactics over and over again. Watch out for red flags like these:

• Someone is claiming to be from your bank or credit card company. Scammers commonly attempt this to appear legitimate. However, your bank or credit card company will never call or email you out of the blue to ask for your personal information. They should also never make you feel rushed or pressured to act quickly. If you receive a call, text or email like this, it’s a red flag. 
• Someone is pressuring you to act immediately. Scammers often try to create a sense of urgency by telling you your credit card has been compromised. Sometimes they’ll even claim to be a relative or friend who’s in a bind and needs your help. If you receive a text, email or call asking you for an urgent credit card payment or requesting that you need to verify your card details, it’s a red flag. 
• Someone is telling you that your credit card has been suspended or will be closed. Don’t let scammers scare you into sharing personal information or your credit card number. Your bank or credit card company will only suspend or close your account after first contacting you directly. Calls, emails or texts claiming that your account is about to be closed are red flags.
• An offer seems too good to be true. Another classic phishing scam is when a caller or emailer offers you a free gift or service in exchange for your personal information. Be wary of promotions, discounts or offers too good to be true. Free vacations and unexpected windfalls of cash are most certainly red flags.
• An email is asking you to click a link or open an attachment. Credit card scammers often send emails that contain links or attachments that, when clicked on, can infect your computer with malware. From there, they can steal your personal information and get access to your online banking accounts, including your credit cards. If you receive an email from someone you don’t know, don’t click on any links or open any attachments. Emails like these are attempts at phishing scams, and they are red flags.
• A sender’s email address doesn’t match the company they claim to represent. Or the email is from a free provider like Hotmail, Gmail or Outlook. Scammers may spoof a company’s name in their email address, so carefully review each character in the email address. Even slight variations in the characters or letters used are red flags.
• Something just seems off. Scammers often make up stories full of holes and include information that simply doesn’t make sense. They also frequently make spelling mistakes and use poor grammar. If the communication doesn’t appear professional or something feels off, it’s a good indication that you’re dealing with a scammer. Trust your intuition when it spots a red flag. 

8 ways to avoid credit card scams

Banks, security companies and the authorities are always working hard to stop credit card scams, but there’s a lot you can do, too.

Here are 8 ways to avoid falling victim to a credit card scam. 

1. Stay on top of the latest credit card scamming methods 

Scammers are nothing if not innovative, and approaches are increasingly complex. Fortunately, there are ways to keep on top of the latest tactics. 

• Check with your bank. Many banks keep their customers updated about the latest scams, and you can find this information on your bank’s website.
• ‘Hear the alarm bells’. The Australian Banking Association (ABA) developed its ‘Hear the alarm bells’ campaign to help customers detect scams. You’ll find lots of useful information on the ABA’s anti-scam campaign website.

2. Check statements for suspicious charges

It’s always a good idea to thoroughly check your credit card statements to keep an eye on your transactions. If there are any charges you don’t recognise, alert your bank straight away.

While you’re on a mission to stay safe, get into the habit of shredding hard copies of your statements and bank documents, as they contain personal details that scammers can use.

3. Sign up for fraud alerts and push notifications

Many card providers offer a fraud monitoring service with a specialised team that monitors and investigates cardholder activity for unusual transactions on your card. They may contact you within seconds of potential fraud activity appearing on your account.

You can also set up push notifications or transaction alerts on your banking app. These will notify you whenever money goes in and out of your accounts, so you can detect fraudulent activity instantly.

Just make sure to confirm messages from your bank. They will never ask you for your banking passwords or to download software, transfer money or log into your platform through a link sent by text or email. If you’re ever in doubt about the authenticity of a text or email, contact your bank directly to confirm that it was actually sent in an official capacity.

4. Limit cardless transactions

One easy way to help keep your money safe is to limit how much you can spend when making transactions that don’t require a physical card. Some banks have a special app credit card block feature, such as CommBank’s Lock, Block, Limit feature. You set a daily limit on your card so a criminal can’t clean you out before you’ve had a chance to lock or cancel it. You can disable the feature on the spot if you need to make a larger purchase.

5. Secure your passwords and PIN 

While using the same password for all your online logins is tempting, you’re making it easier for scammers. Use strong passwords and change them regularly. You’ll find tips on creating a strong password on the Australian Cyber Security Centre’s website.

Additionally, make sure you’ve chosen a hard-to-guess PIN, not your date of birth or name, and never share your PIN. If you’re shopping in-store, always cover your hand when using your PIN and don’t hand your card over when making payments. 

6. Keep software updated 

Ensure your computer’s antivirus software and operating system is up to date, which can help block scammers before they attack. If you haven’t already, register for your bank’s security token, like CommBank’s NetCode token, which can send you a time-sensitive password to make transactions.

You can also ramp up your security during online shopping by checking for a locked padlock icon in the toolbar and ‘https’ in a website’s address. 

7. Use public Wi-Fi cautiously

Scammers don’t need your physical credit card to steal your money. They only need your card’s data, like the credit card number, CVV and expiration date. They obtain this information in various ways, such as if you use a non-secure website or public Wi-Fi for a transaction. 

8. Be careful about what you share online 

Social media platforms can also put you at risk as they’re a hotspot for criminals looking for targets. Think twice before sharing personal information. It also helps to use different passwords for each social media account and update them regularly using two-factor authentication.

What to do if you’ve been scammed

If you think you’ve been the unlucky victim of a scam — or even an attempted scam — don’t hesitate before acting. Immediately contact your bank or credit card company and freeze or cancel your credit card to prevent further transactions.

Other steps to take include:

• Reporting the scam to the Australian Competition and Consumer Commission (ACCC)
• Filing an official police report online 
• Visiting the National Anti-Scam Centre website for more information on how to limit the damage 
• Contacting IDCARE, Australia and New Zealand’s national identity and cyber support service, for assistance.   

Finally, if you suspect that the scam could cause you to go into debt, consider having a chat with a financial counsellor.

DIVE EVEN DEEPER

9 Things To Know Before Getting Your First Credit Card

Understanding the basics can save you time, money and frustration and get you on your way to building good credit.

Katia Iervasi

What Is This Random Charge On My Credit Card?

It can mean credit card theft, but there are legitimate reasons for them to appear on your statement, too.

Katia Iervasi

Does Cancelling A Credit Card Affect Your Credit Rating?

Cancelling a credit card can affect your credit score. The impact depends on your overall credit history, the age of your accounts and other factors.

Kristie Kwok

How To Pay Off Your Credit Card

Tricks to paying off credit cards include repaying more than the minimum, consolidating debt, using a balance transfer, and other debt relief strategies.

Alan Hartstein