i’m a victim of credit card fraud! what do i do?

It’s one of those things that you think won’t happen to you until it does. So now that it has happened to me, here’s my tips for what to do if it happens to you.

Firstly, a brief introduction into credit card fraud. This type of fraud falls into two categories:

  1. Counterfeit credit cards: created by the illegal copying of information from the magnetic strip of a credit card, and
  2. Card-not-present credit card fraud: the fraudulent use of credit card details in mail, telephone and internet transactions.

In order to stop the fraud in its tracks, financial institutions use sophisticated fraud detection systems to monitor credit card usage. If a transaction occurs that the system deems suspicious given your transaction behaviour and other factors, your financial institution may contact you to verify the transaction before proceeding.

Unfortunately, some transactions fall through the system’s gaps. Given my experience, these transactions are commonly those that are made online.

What are the indicators that something’s wrong?

  1. When you use your card, and it gets declined because you do not have sufficient funds.
  2. When you see an unusual transaction on your statement, and you made no such transaction.
  3. When see your available balance reduce, and you made no recent transactions or holding payments. (Reason: if a transaction occurred online or overseas, there is a lag time between when the transaction is approved and when it is processed)

So what do I do now?

  1. Immediately call your financial institution and tell them what happened, what was unusual, etc. They will work with you to determine the situation.
  2. If your card has been used fraudulently, then immediately cancel it. Your financial institution should do this without you asking.
  3. Ask carefully about what your financial institution’s claims/reimbursement process is. You will need to complete forms for their investigation.
  4. You will need to report this with the police. At the police station, you will be required to complete a “Fraud Report Form” (NSW Police) that asks you to provide details of the fraud. Make sure to bring a copy of a statement containing the fraudulent transaction. At the end of this, you will receive an event number beginning with “E”, which is a requirement for many claims forms.
  5. Complete the claims form and await further instructions from your financial institution

That’s where I’m up to in the process. I will update this later if needed.

Will I get reimbursed?
You should be reimbursed for the full amount of the fraudulent transaction. Complete your claims form carefully and as instructed.

Financial institutions are insured against these type of losses.

How to protect yourself from credit card fraud
The Australian Competition & Consumer Commission’s SCAMwatch recommends the following to protect yourself from credit card scams:

  • NEVER send money, or give credit card or online account details to anyone you do not know and trust.
  • Check your bank account and credit card statements when you get them. If you see a transaction you cannot explain, report it to your credit union or bank.
  • Keep your credit card and ATM cards safe. Do not share your personal identity number (PIN) with anyone. Do not keep any written copy of your PIN with the card.
  • Choose passwords that would be difficult for anyone else to guess.
  • Try to avoid using public computers (at libraries or internet cafes) to do your internet banking.
  • Do not use software on your computer that auto-completes online forms. This can give internet scammers easy access to your personal and credit card details.
  • Do not give out your personal, credit card or online account details over the phone unless you made the call and the phone number came from a trusted source.
  • Never send your personal, credit card or online account details through an email.

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