How to use a credit card safely overseas

If you’re travelling, there are a number of common scams to be aware of. We’ve outlined steps you can take to help keep your card safe overseas.

You should be aware of skimming devices when using your credit card overseas and know what to do if skimming occurs. Picture: iStock.

If you’re travelling overseas and thinking about using your credit card, you may be at risk of falling for some of the many common scams. While credit card crime can be higher in some countries than others, there are some protective features that are good to be aware of which could help keep your finances safe.

Protection for credit cards

Many credit cards have features that can help protect you from credit card fraud. Examples include:

- Credit card chip. Many credit cards have a microchip embedded in them that holds encrypted data, which makes it harder for skimmers to extract card data

- Credit card PIN. PINs are like passwords and add an extra layer of protection against unauthorised use of real credit cards as well as the use of illegitimate copies

- Credit card CVV. The CVV number printed near the magnetic strip on the back of credit cards is similar to the PIN and helps secure online credit card transactions

Fraud monitoring. Many credit card providers have systems in place that aim to detect unusual card activity (if you’ve ever received a call from your bank asking you to confirm a transaction, that may have been the fraud monitoring team)

- Zero liability. In Australia, credit card providers generally include zero liability protection which provides liability protection against fraudulent transactions provided you report them as soon as you notice them, take other precautions (such as not sharing your PIN), and you don’t meet any other exclusions listed in your credit card’s terms and conditions

- Advanced security features. Some credit card providers send security codes via SMS to verify transactions, while Verified by Visa and MasterCard SecureCode use a code or other security details to verify transactions with retailers that participate in the program.

There are a number of features that offer protection for credit cards when you’re travelling overseas. Picture: iStock

What to do if your credit card is lost or stolen

If you lose your credit card, or it’s stolen, there are three essential things you should do:

- Immediately cancel or lock your card. Some credit card providers will enable you to do this via their mobile or internet banking tools, or you can call your card provider

- Check your transaction history or statement for any unauthorised transactions

- Tell your credit card provider. Letting your provider know your card has been lost or stolen and about any unusual transactions, will help keep your account safe and help you understand the next steps to take.

You should be aware of skimming devices when using your credit card overseas and know what to do if skimming occurs. Picture: iStock.

Credit card skimming

Credit card skimming is a crime that involves intercepting credit card transactions at ATMs and at point of sale terminal (POS) machines (e.g. eftpos). When your credit card is skimmed, your transaction will appear to proceed as normal, however, thieves might also gain access to your card details and potentially your pin. This can enable them to steal money from your account or sell your card information to someone else who can then steal your money.

How does credit card skimming happen?

Criminals typically create a piece of hardware that fits over a genuine ATM or POS device, or deploy hidden cameras. Sometimes, they may create a separate device that’s used in conjunction with the legitimate payment machine.

This means thieves can often gather your data without preventing your transaction, so you’re less likely to detect the crime until after money has been stolen from your account.

How to avoid credit card skimming?

There are several common signs of credit card skimming and tactics for trying to avoid them, including:

- If a seller swipes or taps your card on two separate devices, there’s a good chance one is a skimmer. You may be able to avoid such scams by swiping your credit card yourself rather than handing it over.

- If you notice extra features or loose parts when you visit an ATM, that can be a sign of tampering. You may be able to avoid a scam by visiting a different ATM.

- Hidden cameras can be hard to spot, but if you cover the keypad when you enter your pin, you may be able to block the camera’s view of your pin.

In addition, it’s a good idea to check your credit card statement regularly so you can report fraudulent transactions as soon as possible and prevent thieves from continuing to use your details.

It’s also a good idea to contact your credit card provider to tell them where you’re travelling overseas and the dates you leave and return. This can help prevent them putting a stop on your card when you’re using it, and put them on the lookout for any unusual transactions.

It’s a good idea to check your credit card statement regularly so you can report fraudulent transactions as soon as possible. Picture: iStock

In which countries is skimming more common?

While not limited to skimming, according to a report in 2021, more than a third of all credit card fraud occurs in the US, making it the country with the most credit card fraud. Mexico and Brazil also have high rates of credit card fraud. Ireland has been found to be the European country where you’re likely to be the most vulnerable to credit card fraud. However, the greatest amount of money is lost to credit card fraud in the UK. France is ranked as the third most vulnerable European country to credit card fraud.

Other common credit card scams

Pickpocketing

In many countries, pickpocketing is commonplace. Pickpocketing is the practice of stealing credit cards and other valuables right out of people’s pockets (and bags).

Overcharging scams

You might be subject to an overcharging scam if you sell products and services. To make these scams work, scammers will generally use a credit card or cheque to pay more than they were meant to for a product or service. They’ll then ask you to pay back the excess (either to them or a third party), often via a different payment method.

If you make the payment, you’ll later discover the cheque has bounced or the credit card was stolen or fake, with the result being that you will have refunded the ‘excess’ payment with your own money. You may even have delivered the product or service, meaning you will have lost that as well.

A similar scam involves the scammer sending you a fake receipt for a larger than necessary payment made via a service like PayPal. The result is the same — you are using your own money to repay the ‘excess’ payment.

Fake ticket scams

If you want to buy tickets to an event, such as a sports game or live performance, scammers can pose as legitimate ticket merchants to sell you fake tickets. If you fall for such a scam, you’ll turn up for the event only to discover the so-called ticket you’ve purchased is fake, and you won’t be allowed entry to the event.

Visa Scams

If you’ve heard of visa scams, you might think they’re related to credit cards that operate on the Visa network. They’re actually scams involving illegitimate international visa agents that sell fake visitor or work visas.

There are a number of common scams that might stop you from enjoying the holiday. Picture: iStock

The impact of identity theft

According to a publication in 2014 from the Department of Home Affairs, most people who fall victim to identity theft lose $1000 or less as a result of the crime. Though financial losses can be a lot higher (even hundreds of thousands of dollars).

In addition to direct financial losses, identity theft can also result in victims suffering indirect financial damage. For instance, their credit rating might take a hit, making it harder for them to access credit or get a lower interest rate on future loans.

The same report suggested that, on average, victims spend at least 18 hours sorting out the fallout of identity theft, though more serious identity theft can require more than 200 hours to deal with.

Identity theft victims can also suffer reputation damage, which can be difficult to recover from. Identity theft can also impact on the mental and physical health of victims.

Other than the impacts on the victims themselves, identity theft also impacts our economy. For instance, the Department of Home Affairs report also included conservative estimates of the direct financial losses due to identity theft come in at more than $1.5 billion per year, while the direct cost of investigating identity theft and prosecuting offenders is around $75 million per year.

What should I do if I’ve been scammed or skimmed?

The first thing to do is call your credit card issuer. They will take steps to protect your account, such as cancelling your card, and issue you with a new card. They may also be able to perform a chargeback.

You could then warn your friends and family, so they don’t fall prey to the same issues.

You might also consider filing a police report, and if it was a scam, reporting it to the relevant authority can help:

- For financial and investment scams, you can contact the Australian Securities and Investments Commission

- For tax scams or if your TFN has been used in identity theft, you can contact the Australian Taxation Office

- For Centrelink, Medicare, child support and myGov related scams, you can contact Services Australia

- For spam emails, you can contact the Australian Communications and Media Authority (and if the spam email asks for banking information, you can also tell your bank)

- For other forms of online crime, you can contact the Australian Cybercrime Online Reporting Network

- For all scams, you can also reach out to Scamwatch, so they can get the word out about new scams.

Once you’ve done that, if you can trace the scam or skimming to a particular business or ATM, consider informing the organisation, so they can potentially protect others.

If you’ve fallen victim to an online scam, scan your computer and all internet-connected devices to check for viruses and other malware. You may also benefit from changing your passwords and PINs. This is vital if you’ve use the same password or PIN on multiple accounts.

And finally, you might consider seeking professional mental health support to help with any anxiety you might feel as a result.

Compensation for credit card scam victims

If you’re the victim of credit card skimming, you might get your money back if you meet your credit card provider’s zero-liability rules. This is less likely if you’ve been the victim of a credit card scam, however it’s always worth talking to your financial institution.

If your credit score has been negatively affected, or you need help re-establishing your identity with government or financial institutions, you can apply for a Commonwealth Victims’ Certificate. If you’re the victim of identity theft, IDCARE can help you come up with a plan for recovering from the incident.

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