Credit-card merry-go-round annoying

Fraudsters causing frustration but banks say they’re gaining ground on the crooks, writes Rob Stock.

Travis Barker has had his credit card replaced three times in the past six months.

The Auckland-based data analytics consultant is a world citizen, big traveller, and buys many of the things he needs online.

But even so, having to replace his card so often is unusual, though banks do often issue Kiwi credit card holders with new ones because of attempts to defraud them.

Fraud cases force ANZ bank to replace just over 2 per cent of its cards each year.

The last time figures were published for Visa and Mastercard was in 2009 when the Commerce Commission investigated card companies.

At the time there were around 3 million credit cards on issue. If that number had not changed in the last nine years, 2 per cent would represent about 60,000 cards reissued each year, if ANZ’s experience was matched by the experience of other banks.

The corresponding figure for ‘‘scheme’’ debit cards that work over the Visa and Mastercard payment systems amounted ‘‘to less than one per cent’’ of cards, ANZ said.

‘‘I’ve had my credit card replaced three times in the last six months because of fraudulent transactions on my credit card,’’ said Travis, who was speaking at the Commission for Financial Capability’s financial resilience summit this month.

‘‘That’s probably because I am buying stuff online, and I’m giving out my details.’’

One of the incidents came as a result of using his card on a fraudulent website dressed up to look like a New Zealand shoe retailer, something the Commerce Commission says is surprisingly common.

The other happened after Barker returned from a trip to the US. He was back in New Zealand when someone tried to pay a hotel bill in Dublin with his card details.

Barker decided enough was enough, and now he uses an intermediary, PayPal, to make payments when he does not have complete trust in the retailer he’s buying from.

‘‘I trust PayPal. I share my financial details with PayPal, and then PayPal manages the relationship with the various vendors, so that protects me and hopefully means I don’t have to replace my credit card again.’’

Netsafe’s online shopping guide suggests using PayPal as one way to shop safely online.

Not every attempt at credit card fraud results in money being lost to crooks.

Banks have fraud monitoring systems that flag and block suspicious transactions, such as a payment attempt being made in Dublin when it’s clear the cardholder is in New Zealand.

‘‘ANZ cards are monitored 24/7 by sophisticated fraud systems and customers are contacted if there is unusual activity seen on their card,’’ the bank said.

‘‘Our fraud systems can decline suspicious transactions and automatically block the card, reducing the risk of more suspicious payments being attempted.’’

The bank was gaining ground in the battle against crooks.

‘‘In recent years, ANZ has invested significantly in our fraud systems, decreasing the number of fraud cases,’’ ANZ said.

As long as a cardholder had not been negligent in the use of their card, and complied with the terms and conditions, they were not liable for losses.

The Banking Code of Practice, to which all banks have signed up, says: ‘‘If you’re a victim of fraud where someone accessed and used your electronic banking or your card without your authority, talk to us immediately.

‘‘We’ll reimburse any of those fraud losses if you: weren’t dishonest or negligent, complied with our terms and conditions for electronic banking or card use, and took reasonable steps to protect your banking.’’

Cardholders could be up for an argument on that front debating what is ‘‘reasonable’’.

‘‘[Using PayPal] protects me and hopefully means I don’t have to replace my credit card again.’’ Travis Barker, left