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Don’t get screwed over by fraud and unauthorised charges. Compare credit cards with a fraud protection guarantee for purchases you make with the card.
Fraud can have serious consequences for your finances and your credit profile.
When you use your card to make purchases you are inevitably exposed to fraud risk. Criminals can hack into the databases of poorly secured websites, retrieve the personal information of customers and use them to make purchases online. Computer viruses can store card details and send them over the internet without you knowing.
Even when you hand your card to someone you are not always safe. During a transaction your card details can be swiped.
When you have a credit card fraud protection guarantee, you are covered from the consequences that may result from your credit card details falling into the wrong hands. Unauthorised payments made with your details could be reimbursed by the bank. The main caveat is that there must be conclusive proof that fraud has occurred, and you must meet the conditions laid down by the card provider.
To choose the right credit card with fraud protection for you, you need to compare credit cards based on the following factors.
Ongoing security monitoring
Most card providers will have some sort of automated monitoring program which looks for unusual transactions on your card. This may include unusually large transactions out of character with your normal purchasing profile, a series of purchases made in an unusual place (e.g. a foreign country, when you have never used the card overseas before) or a sudden rash of transactions within a short space of time.
While this may sometimes produce ‘false positives’ (i.e. your genuine transactions triggering a fraud alert) most cardholders will find it reassuring to know that these situations are being examined for possible fraud.
If you are not a regular overseas traveller, you can avoid being stranded in a foreign country with a suspended credit card by informing your financial institution about your travel plans before you leave.
Money back guarantees
You obviously need to ensure that you will get all your money back in the event of credit card fraud. Some providers may offer part protection that will only offer refunds up to a certain level, or beyond a capped excess, while others may only remove the transaction from your account and do not refund any interest that may have been incurred by the fraudulent transaction.
Duty of care
Credit card fraud protection guarantee is meant to protect you against genuine dishonesty but not your own carelessness. This means that you have specific responsibilities which will be outlined in the terms and conditions (printed or digital) that you received with your card, and which may be updated from time to time.
You must, for example, keep your card in a safe place, and you should memorise your PIN rather than writing it down (and certainly don’t keep a written record of your PIN in your wallet with your card). Your PIN should not be disclosed to anyone else.
If your card is lost or stolen, you must notify your card issuer as soon as possible, and there will almost certainly be a reasonable time limit within which you must act before protection is forfeited.
CVV and CSC codes
Many credit cards will have a CVV (Card Verification Value) or CSC (Card Security Code) printed on the card (not in raised or embossed print) for use when the PIN cannot be entered, such as online payments. However, since the number never changes during the life of the card, it is vulnerable to hackers and phishing scams.
One-use SMS codes
There will often be an extra layer of SMS code security available with your card for online shopping. It may come as a standard feature or an opt-in service. With SMS code security, your card provider will send you a text message on your phone containing a single-use-only numeric code (‘one-time PIN’, ‘one-time password’ or OTP) when your card details are entered online for a purchase. The code sent to your phone has to be entered for the purchase to be completed, making it difficult for anyone without your phone to use your card online. This is a convenient and secure way to make purchases online.
The name for this service will be Verified by Visa, American Express SafeKey or MasterCard SecureCode, depending on which type of card you are using.
Security for tap and go payments
There is a widespread perception that the now common contactless ‘tap and go’ feature found on credit cards, where transactions under $100 do not require a PIN, are less secure. It may be possible for the card details to be skimmed using very sophisticated hacking equipment, but the card issuers appear to be confident about the constantly-improving security of their cards.
A lost or stolen contactless card could also be used for multiple transactions under $100 before the fraudulent use is detected. However, the policy of cardholder’s zero liability for fraud (with the same conditions for cardholder duty of care) applies just as much to contactless transactions as it does to conventional ones.
Security for smartphone digital wallets
The same high levels of anti-fraud security and guarantees apply when you use a portable device such as a smartphone to pay for credit card transactions.
Fees and charges
There are usually no specific additional fees charged by your card issuer for standard monitoring and security services, which will be applied to all cards regardless of their status or annual fee. However, some cards (especially business cards where there are many cards in use by employees on a single business account) may have extra fraudulent transaction insurance available in return for a monthly or annual premium charged to the account.
The credit cards found on this page all have fraud protection guarantees in place, but you will need to read the small print to make sure that you are aware of the exact extent of the cover and your personal obligations.
As a minimum, yes. Both card issuers Visa and MasterCard protects you from fraudulent or unauthorised transactions made using your card with their Zero Liability Guarantees. However, beyond that basic guarantee, your bank may also guarantee that you’ll never be liable for fraudulent use of your credit card, provided you follow the credit card conditions of use policy.
Credit card lenders provide varying levels of sophistication when it comes to fraud monitoring and detection. If they notice something irregular, suspicious or unusual on your card they may send you a text message or call you up to ask you about the transaction. Or you might find out about the fraudulent activity when your statement arrives. A fraud protection guarantee typically means that you will be reimbursed for any unauthorised transactions provided that you have not contributed to the loss and you contacted your bank promptly when you found out about it.
These are the main types.
Physical theft or loss of your card
A thief may steal your wallet or purse containing your card, or someone dishonest may find it, and attempt to use it for in-store or online transactions. This is why it is very important not to keep a record of your PIN in the same place as your card.
Fraudulent in-store transactions are more likely to occur with a contactless card, where the thief does not need to enter a PIN for transactions under $100.
Online transactions also do not require a PIN, and the thief can see the CCV (Card Verification Value) or CSC (Card Security Code) printed on the card. However, many online transactions are protected by a one-time PIN sent to your phone by text message. If your phone has also been stolen, ring your service provider to get it disabled as soon as possible.
A credit card skimmer is a small device which criminals may attach to an ATM, or use as a separate reader if you hand your card over for payment at a retailer or restaurant. The card’s number, expiry date and CCV are recorded, and a clone of your card can be created in order to make purchases or withdraw cash.
Fake emails, text messages, social media and dodgy websites can be used to trick cardholders into divulging sensitive credit card information. Banks and trustworthy legitimate businesses never ask you to supply your credit card details in an email, or your PIN over the phone. If the email or website looks suspicious, it probably is. Back out of the email reply or online transaction, or, if you have gone too far, notify your bank at once.
Your computer may be infected by malware (malicious software) if you click on a link or attachment in an email or social media message, or online pop-up advertising, from a person or organisation unknown to you. Scammers may then be able to access your computer files or record what you are doing on your computer, including entering credit card information on trustworthy sites. Delete any such emails, ignore the messages and pop-ups, and keep your anti-virus software up-to-date.
Australian banks have robust security and monitoring measures in place to protect their credit card customers. At the same time, they recognise that fraudulent transactions can still occur, and the major card issuers have a policy of indemnifying customers to a large extent in the event of fraud. Not all of them go as far as ‘zero liability’ or ‘100% money back’, however. Check the full terms and conditions on the card issuer’s website.
There are a number of simple things you can do to radically reduce your chances of being a victim of card fraud:
Some cards have an online facility which allows you to suspend your card temporarily. It can be the quickest way to take action, but it does not replace informing your bank.