Credit card scams: 1 in 9 Aussies victims of personal fraud

With online shopping at an high during the COVID-19 lockdown, it comes as no surprise that 2020-21 saw more than 2.1 million Australians fall victim to personal fraud. 

Alongside prominent investment, romance and phishing scams, credit card fraud saw a significant rise last year. Credit card fraud sat at 6.9% and credit card scams at 3.6%, with the rate of personal fraud up from 8.5% in 2014-15 to 11% in 2020-21.

Who is credit card fraud impacting and how much is it costing?

It’s easy to picture the kind of person who gets scammed out of their credit card details - they look like anyone but you! The truth is, scams are widespread in who they impact.

The Australian Bureau of Statistics report that card fraud affects people in the 35-54 age group at a higher rate than it does people aged 15-34 or 55+. The least likely people to be victims in credit card fraud are people aged 15-24, most likely due to a preference for cash and Buy Now Pay Later over credit cards.

Credit card fraud has no preference with regard to gender, but we can see trends emerging with who scams are more likely to impact. 

People who are employed are more likely to deal with credit card fraud than those who aren’t in the workforce (possibly due to increased transactions). Likewise, people in the highest quintile of weekly earnings are more likely to experience fraud than to the lowest. 

In total, scams cost Australians $2 billion in the 2020-21 financial year. The Australian Payments Network reports $490.1 million as the share of that spent on payment card transactions. That figure is up 9.2% on the year prior. 

Former QLD Premier and head of the Australian Banking Association, Anna Bligh, notes that this sounds like a lot of money but “in the context of billions of billions of dollars' worth of transactions every year, I think it does tell us that our system is relatively safe.”

How does credit card fraud happen?

Do you still eye up every ATM with suspicion, expecting your card to get skimmed? 

The popularity of cashless payments means that card skimming is far from the most common form of card fraud. This form of fraud actually dropped by 37.3%, according to AusPayNet, along with Lost-and-stolen card fraud which saw a 9.2% drop.

On the rise was Card-not-present fraud, which went up by 12.3% and accounts for 90% of all money lost to fraud in Australia. 

Card-not-present fraud is a by-product of rising online spending. It occurs when card information is obtained by an outside party, and then used to make other purchases. Even if you are super vigilant with your card info, card information can be compromised with vendors or third parties.

How can I keep my credit card information safe?

Don’t let this scare you off online shopping! Being informed and staying alert will set you up for success, and the most important thing about fraud is vigilance: you aren’t liable for fraud losses on payment cards, as long as you take due care with your information.

Some quick tips for credit card safety include:

• Check your credit card statement - If you aren’t going through your card statements regularly, you should be. This is the easiest way to catch an unauthorised transaction that hasn’t been flagged by your bank - who’s paying for that Netflix subscription you don’t have? 

• Check that any payment site is secure - unsure of a website’s payment page? Look for the locked padlock symbol next to the url at the top of the page, or an address starting with “https” as indicators of security. Along with this, look at customer reviews on uncertain websites before any first time purchases.

• Use a trusted third party payment provider - protect your card information with a trusted third party like Apple Pay or PayPal, preventing sites with potential weaknesses in their security from having direct access to your details

• Don’t click on links you don’t trust - An email from your bank with some strange typos or an odd-sounding email address? A payment page that looks exactly like your internet provider’s, but has a dot in a strange place? A text about a package you didn’t order? Don’t click them, and definitely don’t put your card information into them!

The good news is that the majority of credit card fraud victims (95%) report the problem to their banks and other authorities, which means that people are being vigilant.

The ACCC has called to make Australia the world’s hardest target for scams, so it’s time for us to do our part.

Stay scam alert with our guides to avoiding money transfer scams and shopping online safely. If you do encounter any scams, make sure to report them to Scamwatch.