How to protect your card from fraudulent use

Protecting your card from fraudulent use
Protecting your card from fraudulent use Photo credit: Getty

Browsing and buying online instead of driving to the shop or supermarket continues to be easier and more convenient.  Is it safe to use cards online and how can people protect themselves against fraud?

In 2019 (January to August), reported financial losses to Netsafe due to card fraud (goods purchased but not received) have reached $447,226. Kiwibank confirmed that online transactions make up over 50 percent of the company's total fraud figures, with 28 percent due to cards being lost or stolen.

Although there is certainly safety in numbers - and some sites are more trusted than others - Martin Cocker, CEO of Netsafe said there's no universal online icon or symbol that offers watertight protection against debit or credit card details being stolen and used by a third party.

Cocker said that people should take responsibility for the security of their card information by sticking to mainstream shopping sites and checking statements regularly.

"The value is that credit cards are well managed by the banks.

"Using them online is relatively safe, provided you're careful and keep an eye on transactions," Cocker said.

Although people are generally protected from liability of unauthorised transactions as banks reimburse for fraudulent use, customers should also take responsibility to check transactions and report suspicious activity as soon as possible.  

Peter Plowman, Senior Manager Security Fraud at Kiwibank said that if you think your card - or card details - are lost or stolen, speed is of the essence.

"Your first step is to contact [your bank] the moment you're sure it's not down the back of the couch.  

"Most banks can work through different options for blocking depending on whether you're sure it is stolen, or if you think you've misplaced it," Plowman said.

Although Paywave effectively enables an unauthorised person to rack up to $80 on a purchase without a PIN, Plowman said that Paywave fraud is still a long way behind other types of fraud.

As long as people are operating within their bank's terms and conditions, including keeping the card secure, having an anonymous PIN and keeping an eye on unusual transactions, they are generally protected from fraud.

"Treating your cards like your keys or cash is probably the best advice.  

"If you've used an easily guessable PIN (e.g. date of birth), or let other people know it (who then steal and use it), you're likely to have trouble getting reimbursement.  

"If you delay telling us about those transactions and there are [additional] transactions, you may be held liable for those," Plowman said.

Most banks have a mobile app that enables customers to put an instant lock on their credit or debit card/s until they're certain and some allow the option to switch off Paywave functionality if this is a concern. 

Although banks work with customers to reimburse fraudulent transactions, Netsafe points out that there's a difference between fraudulent use of a card due to it being lost or stolen and a purchase made on a scam site.

"If deliberately made, the purchase responsibility is with you," Cocker confirmed.

Almost every scam involves a request for financial information or direct payment and among those currently in circulation is an email that requests payment for a fake delivery.  

Some, but not all scams, can be quickly identified by spelling errors and broken English and if in doubt, check it out before you act.

"There's nothing to stop a scammer putting together a well-constructed email that [appears legit]," Cocker said.

Although there are risks associated with using cards online, by sticking to mainstream sites, checking account transactions regularly and reporting suspicious activity and/or a lost card as quickly as possible, you're in the best position to reduce your risks and recover any losses.

Information on current scams and tips to avoid them are updated regularly on the Netsafe web site