Using card payments to cover the cost of goods and services is one of the quickest – and safest – ways to pay in the 21st century. However, that doesn’t mean criminals can’t take advantage of them.
With almost 3 million cases of plastic card fraud in the UK in 2022 and 2.5 million instances of remote purchase fraud, according to Money.co.uk, the need to protect sensitive credit card data has never been stronger.
This blog will explain the different types of card payment fraud, what to do if you’ve been a victim of card fraud, and how you can strengthen your defences against it in the future.
What is card payment fraud?
In simple terms, card payment fraud is the action of using someone else’s credit card – or credit card details – to make purchases in their name or to steal cash directly. It’s often linked with other crimes, like identity fraud, as many criminals use sensitive identity information to pass themselves off as someone else when making purchases.
What types of card payment fraud are there?
While the ins and outs of card payment fraud are intricate and change from case to case, there are four main types of card fraud you need to know about:
- Lost or stolen cards
This is when a card is stolen from someone else and used without their permission. Or, when a lost card is found by someone other than the owner and is used.
- Fake applications
This is when someone applies for a credit card in someone else’s name, so they can use the funds without taking any of the risks, without the named person’s knowledge.
This is the process of cloning a card with a machine that can swipe the original card and copy all of its data to create a duplicate.
- Card details theft
Internet scammers and hackers often take people’s personal info – card number, card owner name, date of birth, address etc. – before selling them online so fraudulent purchases and cash withdrawals can be made in their name.
Am I responsible for my card details being stolen?
The Consumer Credit Act of 1974 is in place to protect victims of card fraud, so under most circumstances you won’t be held responsible for your card information being used by someone else. This means you’ll be able to claim back any cash you lose as a result.
However, there are select instances where you may incur costs as a result of your card or details being stolen:
- Technically, you’re required to cover the first £50 of losses as a result of fraud if your card is stolen. But if you act fast and report your card as lost or stolen, this rule is usually ignored.
- If you show disregard for the safety and importance of your card and card information and act negligently.
Here are some examples of instances where your bank could claim you were acting negligently towards your card and card info:
- It’s been over a year since the fraudulent activity happened
- Your credit card issuer can prove you were responsible for the transaction, or involved in it.
- You claimed to be the victim of fraud, when the transaction was actually yours, to avoid paying.
- You wrote your details down on a piece of paper (which is considered negligent) and that paper is stolen.
7 Ways to spot card payment fraud
There are things you can do to spot potential card payment fraud on your account. Some of these things may need you to dive deeper into your accounts than you would normally, but many of them are part of your usual banking activities. The key is to keep a keen eye on your money, so you can notice when something isn’t right.
Check bank statements regularly
Your bank statements reveal every transaction you’ve made over a month. If you notice a payment, or payments, you don’t recognise, question them ASAP.
Check your credit report regularly
On your credit report, you can check if you’ve applied for any cards or loans. If someone has pretended to be you in applying for one, they’ll show up here.
Call your bank if you get declined
If your card gets declined, it’s possible you’ve hit your credit limit or that your card has been used an unusual amount of times. Call your bank if you suspect someone else may be involved.
Set up card payment alerts
You can set up your mobile banking to alert you whenever your card is used. It might be annoying at times, but you’ll be thankful for it when you spot your card being used without your consent.
Check to see if you’re near your credit limit or if you’ve hit it
Log onto your mobile banking to see how close to your credit limit you are. If you don’t use your credit card much and the numbers look high, you could be the victim of card fraud.
Check your post for unusual letters
Have you received letters in your name you’re not expecting, like junk mail or order notes from a company you’ve never used? It’s an indicator someone is using your details and cards.
Make sure you’re not missing post
On the other hand, if you’ve not received post from companies you’re used to dealing with, check someone isn’t buying things without your consent and that they’ve not cancelled post messaging.
I’m the victim of card payment fraud – what should I do?
When you’re the victim of fraud, there are things you need to do to give yourself the best protection and to ensure you can reclaim any lost funds. But there are also things you can do to help others, including passing information on to certain authorities, so they can prevent similar fraud from happening in the future.
- Contact your card company immediately. Doing this quickly puts you in a good position to be reimbursed.
- Report the fraud to your local police. Your bank should report the issue to the relevant authorities, but it doesn’t hurt to make a report yourself to cover all bases.
- Change all of your passwords and pins immediately, not just on your bank accounts. You may think some of your info is safe, but fraudsters can use your bank to gain access to other sites you use, too, so it’s wisest to do a full password cleanse if you can.
How can I report card payment fraud?
There are multiple ways you can report card payment fraud, depending on the specific fraud you’ve fallen victim to:
- Speak with your card company and explain the situation. They’ll work on your behalf to reimburse anything that’s been stolen if you’re innocent of any wrongdoing and if you act fast.
- If someone has applied for a credit card using your details, you should contact credit reference agencies like Equifax and Experian, to ensure your credit score isn’t damaged.
- If you’re worried your post isn’t being delivered as it should be due to card fraud, as discussed above, contact Royal Mail and let them know what’s happened.
10 ways to prevent card payment fraud in the future
Card fraud happens every day. But there are measures you can take to ensure you’re not one of the unlucky ones who fall victim to it:
- Always keep track of your card when making payments in person. Criminals will try to take your card details if they notice you’re distracted.
- Never share personal details, pins or passwords with someone who’s contacted you out of the blue. They may sound convincing, but they might not be genuine. You make the initial contact if you’re unsure.
- Destroy all old credit and debit cards by cutting them up, and make sure you cut through the chip and strip.
- Keep your PC and phone software and security up to date to help deter hackers.
- Always use strong passwords and different passwords for different sites. Random mixtures of upper and lower case letters, numbers and symbols work best.
- Don’t use mobile banking if you’re on a public Wi-Fi network. You never know who could be looking in on your activity.
- Never stay logged in on your bank accounts when doing online banking in case your machine is lost or stolen.
- Redirect all your post when you move house, so the new tenants don’t get access to sensitive personal info.
- Shred all letters you don’t need anymore, instead of just throwing them away.
- Don’t share card info over social media sites, even if it’s via direct message, as this information will be exposed if your account is breached.
Use your common sense when in doubt about fraud
Unauthorised payments in the UK across cards and other sources were over £700 million in 2022, according to UK Finance.
Fraud of all kinds is still rife across the world, but your best defence is the use of good common sense.
Using the above tips will help, but you need to stay on your toes to stay on top of criminals When in doubt, never share any sensitive information with anyone and always reach out to companies first if you suspect someone is trying to take advantage of you.
With the right knowledge and a little intuition, you can keep the fraudsters at bay.