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Five Most Common Credit Card Scams Revealed

Credit card fraud is on the rise, so you need to know how to spot some of the more common scams out there. Canstar’s Jose George tells you how to protect yourself.

28 October 2021

There’s a rise in scammers taking and fraudulently using online card details, says Canstar general manager Jose George.

He says as we do more transactions online, we’re exposing ourselves to more risk. “But there are things we can do to minimise that danger,” he says in a press release.

Here are some of the common scams:

1. Online buying fraud

We love speed and convenience, which makes it very tempting to save our credit card details on often-used websites and apps.

This makes it easier and quicker for us to buy or renew subscription services. Most retailers work hard to make sure their payment method services are safe and secure, but there are risks in sharing your details.

Rather than saving your details, a minute or two spent keying them in each time could save you a lot of money.

Or use a payment service. For ongoing payments, such as a subscription, set up a direct-debit or a standing instruction instead.

2. Social engineering fraud

‘Social engineering’ is the term used when fraudsters get access to your money or data by manipulating human behaviour.

Some of the best-known techniques include scammers sending emails or phoning, posing as your bank or a service provider.

They say there’s been some suspicious activity on your account, or a problem with their networks. One of the things they say they need to check is your credit card details.

The fraudsters can seem very credible, 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. If you have an online account with them, always type out their website address, never click on a link in an email.

If you’re in any doubt, report the activity to your bank or service provider.

3. Ghost terminals fraud

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

There’s been a 13 per cent increase in the use of ghost terminals. The criminals use sophisticated equipment that’s difficult to trace.

Always take note of the terminal where you’re using your card, especially if you’re somewhere unfamiliar. If you’re at all suspicious, don’t use it. If you do, check your statement and payment history frequently, so you can spot if money is bleeding from your account. If it is, contact your provider and get your card stopped.

4. Fake Wi-Fi networks fraud

This is a simple scam, but easy to avoid. It’s common in tourist spots. Basically, it’s a fake, free, public Wi-Fi network which will clone all the information you access while on the network. They could get your credit card details, passwords, personal details, or travel documents.

Never be tempted to access a free Wi-Fi network that’s not password-protected. If you’re travelling, set up a VPN (Virtual Private Network) on your devices to act as a security wall while you upload or download on a public network.

5. Video game fraud

Online gaming has become big business, generating billions of dollars in revenue. The games may be free to download, but in-app purchases can be very tempting. Take Pokémon Go, which was a free app, but grossed US$4.9million in its first four days.

Online environments can be a hot-bed of credit card fraud through ‘account takeovers’.

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

If you’re a gamer, check your account statements to make sure all the purchases are yours. If you do see suspicious activity, contact your card provider.

First published 3 September, 2018

JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.


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